The first criticism of NPM involves a paradox of centralisation through decentralisation. To illustrate the point, Kaboolian (1998), and Maor (1999) pointed out that giving public managers more authority to manage programs may result in concentrating decisions making in them.
Thus, NPM may lead to centralised decision making by public managers, rather than encouraging decentralization in public organizations as it claims.
The second criticism concerns applying private sector management techniques to the public sector. While NPM has encouraged the use of private sector management techniques, there may be risk associated with adopting some private sector practices. Many academic commentators such as Pollitt (1990) and Armstrong (1998) argued that most areas of public service and administration have distinct political, ethical, constitutional and social dimensions and these factors make the public sector different from the private sector.
A complementary view is provided by Savoie (2002) and Singh (2003), who argues that NPM is basically flawed because private sector management practices are rarely adopted into government operations. For them, NPM is inappropriate for the public sector as it has more complex objectives, more intricate accountabilities and a more turbulent political environment than the private sector.
Moreover, the relationship between public sector managers and political leaders is of a different order to any relationships in the private sector. In support of the above mentioned argument, Painter (1997) contended that there is danger in using private business models in the public sector because of the contextual differences.
Fourthly, Hughes (2003) argued that it is difficult for the government in developing countries to move to contractual arrangements for the delivery of service because the necessary laws and the enforcement of contract are not well established. If informal norms have long deviated significantly from formal ones (with regard to personnel practices, for example), simply introducing new formal rules will not change much. Where specialized skills are in short supply, performance contracts and other output based contracts for complex services may absorb a large share of scarce bureaucratic capacity to specify and enforce them (World Bank, 1997). It seems difficult for developing countries to move away from the bureaucratic system. Hughes (2003) pointed out that this old model of organization allows favoritism and patronage.
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this also proved riggs ecological model .
In hong kong contractual appointments were done in sync with the business cycle of economy..this led to loss of moral of the employees leading to reduced productivity
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