Abstract
Did New Public Management (NPM) actually lead to a smaller public sector? NPM has been the subject of extensive academic debate as to its successes and failures. However, empirical assessments of whether NPM reached its stated objectives are relatively scarce, mainly due to the difficulty of quantifying the impact of such reforms. This article attempts to do this, focusing in particular on outsourcing and decentralization. Our findings suggest that government outsourcing did not reduce public sector size, though decentralization policies resulted in a smaller public sector, particularly with regard to government expenditure.
Highlights
As a result of the ongoing global financial and economic crisis, most European countries are again considering what measures to take to cut public spending in order to reduce the deficit and public debt
In relation to the variable measuring public employment and our variables of interest, we find no clear evidence of cointegration 23, so the results regarding the long-term effect of outsourcing and decentralization on the amount of public employees will be discussed with caution
Though outsourcing and decentralization were introduced as part of a broader New Public Management (NPM) movement from the 1980s, purportedly to reduce the size of the public sector, little work has been done since to quantify to what extent these policies really resulted in a smaller public sector
Summary
As a result of the ongoing global financial and economic crisis, most European countries are again considering what measures to take to cut public spending in order to reduce the deficit and public debt. From the seventies, a radically different consensus on the appropriate role of the State in the economy and the optimum way to manage economic activity took hold. First starting in the UK (Vickers and Yarrow, 1988), and spreading to the rest of Europe over the two decades, a deep reform of the public sector was set in place (Clifton, Comin, and Diaz-Fuentes, 2003, 2006). This included sweeping privatization, liberalization and deregulation programmes
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
