Moving Toward the New Public Management Paradigm

Abstract

Most local governments (LGs) have failed to attain the New Public Management Paradigm. Among the reasons for the failure are cross-subsidization policies that violate the benefit-equity and/or generational-equity principles. An LG seeking to achieve these principles must increase the number of programs funded with user fees. It is possible - if an LG has the desire and political will - to establish user fees for many programs that currently are financed with general fund revenues. The shift - which requires rethinking managerial structures, cost-accounting methodologies, outsourcing decisions, and service integration activities - can be implemented by making some relatively minor modifications to the LG's management control system.

Keywords: New Public Management, Enterprise Funds, Management Control, Outsourcing, Performance Measurement

JEL Classification: H21, H23, H71, H72, M41