NPM is not dead: evidence from public sector reform in Indonesia

While New Public Management (NPM) had been proclaimed ‘dead’ and irrelevant to addressing policy challenges, other commentators claim that NPM-type reform persists and continues to be practised in today’s public administration. More than four decades ago, such a paradigm emerged to dispute the old bureaucracy, questioning the total control over public policy and service delivery, which was judged ineffective and lacking accountability. NPM seeks to import pro-market ideologies, break down the hierarchies, and bring business principles to government, as its proponents claim that private-sector strategies are superior. From the United Kingdom, Australia, and New Zealand, this doctrine spread to the OECD countries and emerging economies, gaining its traction worldwide and reaching its peak around the 1990s. Prior literature suggests that NPM reform is quite positive, branded as a ‘winning species of the international propagation’, delivering some of its promises in efficiency and customer satisfaction. However, other commentators indicate that such a reform brings contradictory effects, such as fragmentation and performance paradox. Hence, at the very least, although NPM-inspired reform is viewed to be successful in upgrading the public sector, it could also bring problems. To this point, many observers had come up with alternative concepts under the term of post-NPM, including the Neo-Weberian State, which wants to re-strengthen the government as the central actor in public policy. New Public Governance emphasises collaboration frameworks among multiple stakeholders. Or, Digital Era Governance, which focuses on reintegration and puts forward digital technologies as the public sector backbone to address NPM’s limitations. Nonetheless, despite the situation, NPM still exists worldwide; it survives and inspires the public sector amid competing paradigms, perhaps under the notion of sedimentation, layering, or hybridisation. Yet, how such a paradigm persists remains unclear. One assumption indicates that its existence is due to the capability to survive and grow; meanwhile, other observers argue that it relates to NPM’s technical ability to improve the public sector, and the political drivers behind its persistence. These different viewpoints underline that the predictors behind NPM’s existence are still contested and potentially under-investigated. Hence, this project offers a new understanding of the dynamics of NPM-type reform endurance, especially from the perspective of an emerging democracy. Grounded in a mixed-method approach, this research collected nearly a thousand clean survey responses and more than 40 interviews, engaging civil servants in the Indonesian public sector as practitioners of post-authoritarian public policy. The result reports that, despite its agreed limitations, NPM-type reform still exists and goes hand in hand with post-NPM ideas. It commonly manifests in mechanisms such as performance systems, risk management, or contracting out, navigating day-to-day government operations due to its perceived technical benefits in improving the public sector. In other words, public practitioners tend to view the drawbacks of NPM as reasonable, ‘it is better than nothing’. Thus, the NPM tenet is perhaps imperfect or suboptimal. However, it is still deemed important and better than the old model, particularly within the bureaucracy spectrum that faces systemic challenges like corruption, collusion, and nepotism.