Modern Theories of Public Administration – New Public Management, Governance, and New Governance

🟦 Public Administration Reimagined: Why Modern Theories Point Toward Governance

Public administration today is no longer the exclusive domain of centralized government institutions. While the state remains a crucial actor, the way it operates and interacts with society has fundamentally transformed. Traditional administration, once based on a hierarchical and authoritative structure of command and control, is giving way to a new paradigm built upon collaboration, networks, and shared responsibility. This shift reflects more than a theoretical evolution—it signals a transformation in how the state and society relate to one another, fueled by increased citizen expectations, market dynamics, technological innovation, and global interdependence.

At the heart of this transformation lie three pivotal theories: New Public Management (NPM), Governance, and New Governance. Each emerged in response to specific historical and structural challenges, proposing distinct yet interrelated visions for reforming how public institutions function. Together, they have reshaped both academic discourse and practical approaches to managing public affairs.

New Public Management (NPM) emerged during the 1980s in countries like the United Kingdom under Margaret Thatcher, and the United States under Ronald Reagan, as well as in New Zealand. In the wake of fiscal crises, bloated bureaucracies, and declining trust in government efficiency, these governments sought to downsize the public sector and introduce private-sector management principles. NPM emphasized efficiency, results, market mechanisms, and a "small government, big market" orientation, aspiring to transform bureaucracies into performance-driven, customer-oriented service providers.

However, over time, the limitations of NPM became increasingly evident. The complexity of public problems and the diversity of social needs could not be addressed solely through market-based mechanisms. Public value and democratic accountability were often neglected. In response, the theory of Governance emerged, emphasizing the importance of multi-actor collaboration in policy formulation and implementation. Governance rejected the notion of government acting alone and instead embraced networks involving civil society, businesses, and communities to jointly solve problems.

Governance marked a major conceptual shift. Instead of relying on command and control, it focused on coordination, negotiation, and trust. It acknowledged the need for horizontal decision-making processes and the capacity to govern through influence rather than authority. Building upon this, the concept of New Governance evolved as a further refinement. It sought to institutionalize civic participation, redefine the roles of public and private actors, and enhance collaborative policymaking in complex, adaptive systems.

These three theories—NPM, Governance, and New Governance—serve as lenses through which to understand the transformation of public administration in the 21st century. They help us ask crucial questions: What principles should modern public administration pursue? What risks must be avoided? What values must be protected? This article explores the emergence, features, strengths, and weaknesses of these three theories, offering a comparative analysis and real-world examples to bridge theory and practice in the field of public administration.

🟩1. New Public Management (NPM)

Background and Origin
Emerging in the 1980s, NPM responded to dissatisfaction with bureaucratic inefficiency, rising public expenditures, and mounting fiscal deficits. It was heavily influenced by neoliberal ideology, which favored market-oriented reforms, privatization, and managerialism in the public sector.

Key Features of NPM

Principle	Description
Performance-Oriented	Use of performance indicators, targets, and evaluations
Customer-Centered	Treating citizens as clients with service expectations
Privatization	Outsourcing public services to private contractors
Decentralization	Delegation of authority to lower levels of government
Contracting Out	Use of performance-based contracts for service delivery
De-bureaucratization	Flattening hierarchies and increasing managerial discretion

Benefits and Contributions

Improved resource efficiency and accountability
Increased responsiveness through competitive service delivery
Encouraged innovation through market mechanisms

Criticisms and Limitations

Undermined the public interest and equity
Reduced citizens to consumers
Challenges in measuring outcomes in complex social services
Risk of fragmentation and loss of coherence in public service provision

🟩2. Governance

Conceptual Shift
Governance denotes a shift from top-down, hierarchical government to a more horizontal, participatory form of policy-making involving multiple actors.

📌 Definition: Governance refers to the processes and structures through which public policies are formulated and implemented by networks of actors including government, civil society, and private entities.

Core Components

Multi-Actor Participation: Involving NGOs, businesses, civic groups
Horizontal Decision-Making: Consensus-building over command
Policy Networks: Sustained interactions between stakeholders
Decentralization: Empowering local governments and communities

Types of Governance

Type	Description
Bottom-Up	Civil society-driven governance initiatives
Top-Down	Government-led, with inclusion of external partners
Hybrid	Shared authority and responsibilities

Real-World Applications

Participatory budgeting processes
Community-driven urban regeneration projects
Multi-stakeholder social welfare systems

Benefits

Enhances legitimacy and citizen engagement
Promotes context-sensitive, flexible solutions
Fosters social learning and trust

Challenges

Ambiguity in accountability
Risks of tokenistic participation
May blur the line between public and private interests

🟩3. New Governance

Emergence and Rationale
As governance practices became mainstream, scholars and practitioners called for deeper institutionalization of participation and coordination. Thus, New Governance emerged, emphasizing strategic integration and institutional capacity for collaboration.

📌 Definition: New Governance refers to the structured and institutionalized framework for managing complex governance networks with a focus on trust, co-responsibility, and long-term sustainability.

Key Characteristics

Institutionalized participation (deliberative democracy, e-democracy)
Emphasis on co-production and co-governance
Cross-sector collaboration anchored in legal and procedural frameworks
Use of digital platforms for engagement and transparency

Theoretical Contributions

Integration with social capital theory
Emphasis on relational governance and institutional trust
Expansion into digital and global governance arenas

Practical Cases

National e-participation platforms (e.g., South Korea’s “Gwanghwamun 1st Avenue”)
Local ordinances for co-governance councils
Collaborative welfare programs involving social enterprises

🟩4. Comparative Summary and Synthesis

Category	NPM	Governance	New Governance
Focus	Efficiency, Output	Participation, Dialogue	Institutionalized Cooperation
Actors	Government + Market	Government + Networks	Multi-sector, Institutionalized
Mechanisms	Competition, Contracts	Negotiation, Trust	Co-governance, E-participation
Values	Accountability	Legitimacy	Sustainability, Inclusion

Integrated Understanding
Rather than choosing one theory over another, today’s public administration benefits from applying all three frameworks selectively based on the policy context. NPM is suitable for performance-sensitive sectors, Governance for participatory policy areas, and New Governance for long-term, systemic reforms requiring institutional depth and civic trust.

🟨 Reframing Public Administration for the Governance Era

Modern public administration must go beyond rigid theoretical boundaries. Faced with social complexity, digital disruption, and rising expectations for inclusivity and accountability, the field must adapt through pluralistic and context-sensitive approaches. NPM, Governance, and New Governance each bring unique insights.

NPM contributes managerial efficiency and accountability
Governance redefines the role of the state through multi-actor collaboration
New Governance institutionalizes citizen participation and mutual responsibility

In practice, these theories are not mutually exclusive. Rather, they can and should coexist, forming a blended approach tailored to the problem at hand. For instance, welfare service delivery can benefit from NPM's efficiency tools, urban planning projects can adopt participatory governance, and digital public services can be enhanced through New Governance frameworks.

In South Korea, reforms such as participatory budgeting, open government data, and e-governance initiatives demonstrate the applicability of these models. However, challenges persist—formal participation may lack substance, overlapping responsibilities hinder accountability, and overreliance on market logic may erode public values.

Going forward, public administration must be understood as a discipline that designs and delivers public value in partnership with society. It is not solely about what governments do but how citizens and institutions work together to shape the common good. Therefore, it must be reimagined as a field of collective intelligence, civic innovation, and ethical stewardship.

By embracing the integrated wisdom of NPM, Governance, and New Governance, public administration can move toward a more inclusive, responsive, and sustainable future.