The Irony of NPM

• Published date: 01 March 2009
• DOI: 10.1177/0275074008315372
• Date: 01 March 2009
• Author: Chad B. Newswander,John Bumgarner
• Subject Matter: Articles

The American Review
of Public Administration
Volume 39 Number 2
March 2009 189-207
The Irony of NPM
© 2009 Sage Publications
10.1177/0275074008315372
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The Inevitable Extension of the Role
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of the American State
John Bumgarner
United States Government Accountability Office, Virginia Beach, VA
Chad B. Newswander
Virginia Tech
Government delivery mechanisms and services are increasingly being shifted to the private
sector where executive values of efficiency and effectiveness reign supreme whereas legisla-
tive and judicial institutional values are confined to traditional government agencies. New
Public Management (NPM) has ironically initiated a process of diffusing legislative and judi-
cial institutional values into the contract state through reactive legislative enactments and judicial
opinions that attempt to reinforce the constitutional character of public action. An integration
of NPM and legislative and judicial constitutional values is sought to reach a balancing point
in the American state. Last, prescriptions are provided for Congress, the judiciary, and public
administrators to reach a balancing point that will ensure the protection of constitutional values
while valuing effectiveness and efficiency. Thus, NPM may create a potential paradox—rather
than the state becoming minimalist in nature, NPM will increase the influence of the state
through the diffusion of constitutional values.
Keywords:
New Public Management; constitutional governance; contracts
New Public Management (NPM) is described by emblematic discursive statements that
holds great appeal: “results not process,” “steering, not rowing,” and “collaboration,
not conflict” (Lynn, 1998, p. 236). These pithy phrases add to the allure of NPM as an
approach that seeks not only to reform government, but also to make it more effective and
efficient. Regardless of ideological stripe, NPM has a sizable following on both sides of the
aisle (e.g. “Reinventing Government” Agenda of Vice President Al Gore and President Bill
Clinton and the “Management Agenda” of current President George W. Bush). The lofty
aspirations of NPM may be exaggerations, but they do have a great deal of value at a number
of different levels.
Transforming government administration into business management, however, openly
confronts the efforts of Congress and the federal Judiciary over the 20th century to retrofit
the administrative state to the Constitution (Rosenbloom, 2000a, 2000b). Since 1946,
Authors’ Note: A version of this article was presented at the annual meeting of American Society for Public
Administration, March 2007, Washington, D.C. The reviews expressed in the article are those of the authors and
do not reflect the views of the U.S. Government Accountability Office. We would also like to thank the follow-
ing people for their comments and suggestions: Larkin Dudley, Max Stephenson, Karen Hult, and John Rohr.
Initial Submission: September 25, 2007
Accepted: January 9, 2008
189

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The American Review of Public Administration
legislative and judicial values have been infused into administrative agencies in an effort
to fit the modern administrative apparatus appropriately within the constitutional structure.
In particular, Congress decided to treat agencies as extensions of Congress by structuring their
procedures by infusing legislative values, such as openness, opportunity for public participa-
tion, public accountability, representativeness, responsiveness and transparency, into public
administration (Rosenbloom, 2000a, 2000b). On the other hand, the federal courts have
imposed judicial values, such as a greater equal protection of the laws and due process,
the creation of remedial lawsuits, and enhanced liability for constitutional torts, in admin-
istrative activities (Rosenbloom, 2000a; Rosenbloom, Carroll, & Caroll, 2000; Rosenbloom
& O’Leary, 1996).
Yet, “dispersed public action” (Goodsell, 2001, 2006) potentially undermines the insti-
tutional values associated with the legislative and judicial branches that have been infused
into the administrative state. Under this framework, government delivery mechanisms and
services are increasingly being shifted to the private and nonprofit sector where executive
values of efficiency and effectiveness are purported to reign supreme while legislative and
judicial institutional values are confined to traditional government agencies.1 Although this
process aims to curtail the reach of the federal government, it ironically has begun to extend
the reach and role of the administrative state. NPM, particularly the utilization of contracting
out, has ironically initiated a process of diffusing legislative and judicial institutional val-
ues into the contract state through reactive legislative enactments and judicial opinions that
attempt to reinforce the constitutional character of public action. Not only is the execu-
tion of public services dispersed but public values are also disseminated.
Thus, NPM may create a potential paradox—rather than the administrative state becom-
ing minimalist in nature, NPM appears instead to have initiated a process by which consti-
tutional values and administrative norms within American society, such as openness, public
accountability, representativeness, responsiveness, transparency, due process, and equal pro-
tection of the law, are being ever more broadly suffused. This article explores whether and
how NPM may serve as a catalyst for the extension of constitutional values into the contract
state; thereby expanding the scope, depth, and breadth of the influence of the administrative
state. This exploration leads us to the conclusion that in fact NPM has served as a catalyst
for the necessary extension of constitutional values into the contract state, but this has
occurred on an inconsistent and often haphazard basis. Therefore, we put forth a framework
for reaching a balancing point between the critically important economy values espoused by
NPM and the necessary requirements for public action required by the Constitution. Such a
framework, if implemented, has the potential to maintain the essential character—upholding
constitutional values—of the administrative state in the execution of public services while
also maintaining a critical focus on economy values as emphasized in NPM.
We first distinguish between NPM, which seeks to expand the contract state, and the
retrofitted administrative state, which seeks to ensure constitutional norms. Second, we
explore the responses of Congress and the federal courts to NPM after a lengthy effort to
retrofit the administrative state to the Constitution. To do this, we review a number of dif-
ferent congressional actions and discuss a variety of court cases involving contracting out.
In particular, congressional and judicial actions are shown to have begun the expansion of
the role of the state in dispersing legislative and judicial values. Third, we propose an
integration of NPM and the values associated with the legislative and judicial branches of

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Bumgarner, Newswander / The Irony of NPM
191
government to bring the American state to a healthier balance that supports the constitu-
tional character of the state while also cherishing the values of effectiveness and efficiency.
The interpolation of legislative and judicial values into NPM potentially transforms the
public and private partnership into a working nexus of management, law, and politics.
Finally, we provide prescriptions for Congress, the judiciary, and public administrators to
attain a balancing point.
The Emergence of New Public Management
A long tradition of focusing on good government through efficiency and effectiveness
was manifested during the Founding, the Progressive Era, the New Deal, post-World War
II era, and in the current generation through the episteme of NPM. Contracting in American
government has existed since the beginnings of the United States (Cooper, 2003). It was not
until after World War II, however, that contracting started to grow in size and scope. Although
Congress passed the Administrative Procedure Act (APA) immediately after World War II
to reassert itself in administrative affairs by regulating executive agencies’ power to make
rules and issue orders, it also was simultaneously contracting out public services to the
private sector on the view that such action would be more efficient.
The current manifestation of the primacy of effectiveness and efficiency includes the
idea that a capitalistic system is built on the premise of change. To endure the tumultuous
changes that occur in an unpredictable environment, organizations must be able to alter, to
an extent, their cultures, behavior, traditions, and modes of production. Organizations that
fail to shape their aspirations to accord with political, market, and social forces are bound
to struggle. Surviving in a competitive sphere, such as the market or electoral politics,
requires a capacity to innovate. To infuse these themes into government, NPM advocates a
focus on satisfying the “customer” through market-driven and liberation management
(Aucoin, 2006; Hood, 1991; Kettl, 1997; Osborne & Gaebler, 1992). For these ideas to
materialize, flexibility needs to replace rules and formal procedures. This is accomplished
by letting managers manage (Kettl, 1997). By freeing administrators from extensive rules,
NPM enthusiasts argue they will be allowed to govern through entrepreneurial means
(Osborne & Gaebler, 1992). Liberation processes accompanied...