The Economics of Enough_ How to Run the Economy as if the Future Matters - Diane Coyle [118]
The decade saw too the start of a worldwide wave of reform often gathered under the heading “New Public Management.” The common theme of the reforms was to try to introduce mechanisms of the market into public services, sometimes by creating competition, sometimes through decentralization to more local level of decision-making, often by a focus on using targets to improve productivity and effectiveness. New Public Management aimed to constrain the bureaucrats by implementing some or all of the following features in government:
• Spreading the use of private sector management practices and technical expertise;
• Introducing measures of performance, and performance-related pay;
• Decentralization and downsizing of organizations in the public sector, including the spread of bodies with much greater autonomy from politics;
• Greater competition in the public sector;
• Tougher budget discipline.
The details vary from country to country, but the disappointment with reforms of government under this heading is pretty universal.8 There is no evidence that efficiency in public services has improved, or that government activity is generating better outcomes. On the contrary, some would argue that the reforms have been counterproductive—competition has simply created gaming in public sector tendering, targets have distorted activity just as much as production targets used to do in the old Soviet Union. As John Kay has put it, “The reasons targets do not work are evident from any study of the failure of planned economies. You can require people to meet goals, but that is not at all the same as encouraging them to meet the objectives behind the goals. By emphasizing targets you undermine both their motivation and their ability to achieve these more fundamental underlying goals.”9
One particularly strong criticism is that the introduction of values and habits from the private sector has undermined the ethos of public service.10 As an OECD survey put it, the reforms “failed to understand that public management arrangements not only deliver public services, but also enshrine deeper governance values.”11 To put it starkly, we expect much more from our police service than from any private sector company—public services must also embody fairness, for example, along with all the other values we’d consider central to our ability to live together in society. Perhaps introducing some of the norms of private sector management into the public sector has been in fact counterproductive? The simple-minded application of New Public Management theory, introducing ideas such as performance-related pay from the private sector, might well have weakened public sector collegiality and ethos. The loss of confidence in the public sector has in turn led to the use of private sector consultancy to deliver public services, in many cases spectacularly expensive, wasteful, and vulnerable to lobbying interests.
At any rate, the result of two decades of government reform is that trust in the institutions of government and politics has continued to erode. People broadly speaking still trust doctors and teachers, but not politicians and bureaucrats, and not the institutions of government. In a 2003 Ipsos Mori British poll, 91 percent trusted doctors and 87 percent trusted teachers to tell the truth. The proportion saying they trusted politicians was 18 percent, journalists 18 percent, and government ministers 20 percent. In a 2008 survey, 50 percent of respondents said they trusted the BBC, and 47 percent trusted the British National Health Service. By contrast, 65 percent trusted the government least. The decline in trust began before the reforms introduced by President Reagan and Prime Minister Thatcher, and has continued since.12
Both Reagan and Thatcher ran campaigns in which government became an object of ridicule. Ronald Regan declared that he had come to Washington to “drain the swamp” and American culture