There is a moment in the life of almost every developing country government when some combination of international pressure, donor conditionality, and genuine domestic frustration with bureaucratic dysfunction produces a familiar prescription: you need to run government more like a business. You need performance targets. You need competition. You need to contract out services to the private sector. You need to give managers the freedom to manage. You need, in short, New Public Management.
This prescription has been handed out with remarkable consistency since the 1980s, first by the World Bank and the International Monetary Fund as part of structural adjustment programs, then by bilateral donors, management consultancies, and reform-minded domestic technocrats who studied in Western universities and came home convinced that the administrative models of Britain, New Zealand, and the United States held the answers to their countries’ public sector challenges. Across Africa, Asia, Latin America, and the post-communist world, governments have implemented versions of New Public Management reforms to varying degrees and with wildly varying results.
So here is the real question. Forty-plus years into this global experiment, does the evidence actually show that New Public Management improves service delivery in developing countries? Or have we been prescribing medicine designed for one patient to an entirely different one — and wondering why the patient is not getting better?
What Is New Public Management and Where Did It Come From?
To evaluate whether New Public Management works in developing countries, we first need to understand precisely what it is and where it came from, because both matter enormously for the assessment. New Public Management — often abbreviated as NPM — is not a single unified theory. It is a loose family of ideas and reforms that emerged primarily in the United Kingdom, the United States, Australia, and New Zealand during the 1980s and early 1990s, largely as a response to what was perceived as the inefficiency, unresponsiveness, and bloated cost of traditional public bureaucracies.
The core ideas cluster around a few central themes. First, there is the marketization idea: introducing competition into public service delivery, either through privatization, contracting out to private providers, or creating internal markets within public agencies. Second, there is the managerialism idea: giving public managers greater discretion to manage resources and personnel, borrowing techniques from private sector management, and holding them accountable for results rather than processes. Third, there is the performance management idea: defining clear outputs and outcomes, measuring them rigorously, and tying budgets and careers to performance against those measures. Fourth, there is the customer orientation idea: treating citizens as customers who deserve responsive, high-quality services, and using customer satisfaction as a measure of public sector performance.
These ideas emerged from a specific historical and institutional context — mature, wealthy democracies with strong rule of law, well-functioning markets, capable civil services, and sophisticated accountability systems. Understanding that context is absolutely essential for evaluating whether the same ideas can be transplanted into radically different environments.
The Appeal of NPM for Developing Countries: Why the Prescription Was So Attractive
Let us be fair about why New Public Management reforms were so appealing to developing country governments, because the appeal was not entirely manufactured by external pressure. Many developing countries in the 1980s and 1990s genuinely had serious problems with their public administrations. Overstaffed, underpaid, poorly trained, and chronically corrupt bureaucracies were delivering terrible services to citizens who desperately needed better. Government hospitals that had no medicines. Schools where teachers did not show up. Revenue services that collected more for themselves than for the state. Infrastructure projects that consumed funds without producing infrastructure.
In this context, the idea of bringing private sector discipline and market mechanisms to bear on public administration had genuine intuitive appeal. If competition can make private sector firms efficient and responsive, why cannot it do the same for public agencies? If clear performance targets work for businesses, why cannot they work for government? If poor performing managers can be fired in the private sector, why should incompetent public officials be protected by tenure? These are not stupid questions. They reflect real frustrations with real failures.
The tragedy is not that the questions were asked. It is that the answers were often oversimplified, context-blind, and applied with a one-size-fits-all universalism that real-world complexity consistently confounded.
The Institutional Preconditions That NPM Requires
Here is the fundamental problem with transplanting New Public Management to developing country contexts, and it is a problem that a generation of reform experience has made increasingly impossible to ignore. NPM is not a set of simple administrative techniques that work regardless of the environment in which they are applied. It is a set of reforms that depend critically on a complex array of institutional preconditions — preconditions that existed in Britain and New Zealand when they undertook these reforms, and that are absent or underdeveloped in most developing countries.
Think about performance contracts, for example. To hold a public manager accountable for results through a performance contract, you need to be able to measure what they produce, you need courts and oversight bodies capable of enforcing the contract, you need a sufficiently developed labor market to replace underperformers, you need accounting and auditing systems capable of verifying whether claimed performance is real, and you need a political and bureaucratic culture where accountability norms are taken seriously. In most developing countries, most of these conditions are either absent or present only in weak, partial form. The result is that performance contracts become paper exercises — signed, filed, and forgotten — rather than genuine accountability mechanisms.
The same logic applies to contracting out services to the private sector. Effective contracting requires capable contract managers on the government side, competitive markets with multiple capable providers, legal systems that can enforce contracts, regulatory bodies that can monitor performance, and political will to hold contractors accountable when they fail. In many developing countries, private sector capacity is limited, regulatory bodies are weak, and the connections between government officials and contractors create corruption risks that negate efficiency gains. The logic of marketization simply does not transfer cleanly to these contexts.
Evidence From Africa: A Mixed and Often Sobering Picture
The African experience with New Public Management reforms is one of the richest sources of evidence we have about what happens when these ideas are applied in developing country contexts — and the picture it paints is mixed, complicated, and in significant ways discouraging. Civil service reform programs inspired by NPM principles have been implemented across sub-Saharan Africa since the late 1980s, often as conditions attached to World Bank and IMF lending programs. The results have been comprehensively evaluated, and the overall verdict is sobering.
In Ghana, public service reform efforts incorporating NPM elements produced some improvements in specific areas — particularly in revenue collection — but failed to achieve broader gains in service delivery quality. In Tanzania and Uganda, civil service reform programs that focused on retrenchment and wage bill reduction succeeded in shrinking civil services but often destroyed institutional capacity in ways that degraded service delivery. The nurses, teachers, and engineers who were downsized as part of efficiency-driven retrenchment programs took their expertise with them, and the supposedly more efficient slimmed-down bureaucracies often could not deliver services that their overstaffed predecessors had managed, however inadequately.
Kenya’s experience with performance contracting in the public sector is instructive. Performance contracts were introduced for government agencies in the early 2000s with considerable optimism and some genuine improvements in measured performance. But independent evaluations consistently found that much of the measured improvement reflected gaming of metrics rather than genuine service delivery improvements. Agencies learned to define targets they could easily achieve, to measure inputs they could control rather than outcomes they could not, and to present performance data strategically. The form of accountability without the substance — a pattern that recurs across NPM implementations in weak institutional environments.
The Asian Experience: Selective Adoption and Hybrid Models
Asia presents a more varied and in some respects more encouraging picture, precisely because several Asian governments approached NPM ideas selectively rather than wholesale, adapting elements that fit their institutional contexts while rejecting those that did not. This selective, pragmatic approach has produced some of the more successful examples of public sector reform in the developing world.
Singapore is often cited as a case where elements of New Public Management — particularly performance management, competitive salaries for public servants, and a strong results orientation — have been successfully incorporated into a public administration system that delivers genuinely high-quality services. But Singapore’s success also reflects very specific factors: a city-state with a small, highly educated population, a particular political economy, and public service salaries competitive with the private sector — all conditions that are not replicable across most developing countries.
In South Korea and Malaysia, governments similarly adopted elements of NPM while maintaining strong central steering capacity and investing heavily in public sector capacity. The lesson from these Asian cases is not that NPM works in developing countries but that specific NPM-inspired practices — particularly around performance orientation and competitive salaries — can contribute to improved service delivery when they are grafted onto strong underlying institutional foundations rather than offered as substitutes for those foundations.
The Corruption Problem: Why NPM Can Make Things Worse
One of the most troubling findings from the empirical literature on NPM in developing countries is that in weak governance environments, several NPM reforms can actually increase rather than decrease corruption and mismanagement. This seems counterintuitive — was NPM not supposed to bring private sector discipline and accountability to public service delivery? But the mechanisms through which this perverse effect operates are actually quite understandable once you trace them carefully.
Contracting out services creates contracting processes, and contracting processes create opportunities for corruption. In strong governance environments with effective oversight, the efficiency gains from contracting can outweigh the corruption risks. In weak governance environments where oversight is limited and political connections drive contracting decisions, contracting out simply creates a new channel for rent extraction that may be even less visible and accountable than the direct provision it replaces. The private company that wins a contract because of political connections has every incentive to deliver the minimum performance necessary to avoid losing the contract, and in a weak oversight environment, that minimum can be very low indeed.
Decentralization — another NPM-inspired reform widely implemented in developing countries — similarly creates local governance structures that can be captured by local elites in ways that central government at least makes more difficult. When power over health and education budgets is devolved to local governments without adequate capacity building, oversight systems, and accountability mechanisms, the result can be even worse service delivery than what the centralized system produced, with the added problem that the failures are more dispersed and harder to address systematically.
The Capacity Gap: You Cannot Outsource What You Have Not Built
There is a principle in public administration that is so obvious once stated that it seems almost embarrassing to need to state it, yet it is violated with surprising regularity in the design of developing country reforms: you cannot effectively oversee, contract, regulate, or evaluate what you do not have the institutional capacity to understand. New Public Management assumes a sophisticated public sector capable of designing performance metrics, managing contracts, evaluating bids, monitoring providers, and enforcing accountability. In many developing countries, that capacity does not yet exist.
When governments that lack these capabilities attempt NPM-style contracting reform, they do not suddenly acquire the capabilities through the act of contracting. What they do is transfer responsibility for service delivery to external actors while lacking the ability to ensure those actors perform. The result is often a combination of reduced direct public provision — with its accountability problems — and inadequate oversight of private provision — with its own, often worse, accountability problems. The worst of both worlds rather than the best.
This is why the most sensible voices in the public administration literature have been arguing for years that the sequencing of reforms matters enormously. Building institutional capacity — the capacity to manage, to account, to oversee, to evaluate — must precede or at minimum accompany market-oriented reforms, not follow them. Capacity building is slow, unglamorous work that does not generate the impressive-sounding reform announcements that donor governments and international institutions favor. But without it, NPM-style reforms in developing countries are often building on sand.
The Role of International Donors: Helpful Partners or Unhelpful Pressures?
We need to have an honest conversation about the role of international donors — particularly the World Bank, the IMF, and bilateral development agencies — in promoting New Public Management reforms in developing countries, because that role has been significant and not uniformly helpful. During the structural adjustment era of the 1980s and 1990s, NPM-inspired administrative reforms were often attached as conditions to desperately needed loans, giving developing country governments little real choice about whether to undertake them and minimal space to adapt them to local contexts.
The institutional monoculture that this produced — similar reform packages applied across very different country contexts because they reflected the fashionable ideas of Washington-based institutions and Western management consultancies — caused enormous damage. Civil services were downsized before they could be restructured. Services were contracted out before regulatory capacity was built. Performance management systems were introduced before the basic data and accounting systems they depend on were in place. The reforms often looked good on paper and in project completion reports while making things worse on the ground.
To their credit, many international donor institutions have undertaken substantial learning and self-criticism about this experience. The World Bank’s own evaluations of its public sector reform lending have been remarkably candid about the poor track record of transplanted NPM reforms. There has been a genuine — if still incomplete — shift toward approaches that are more context-sensitive, more sequenced, more patient, and more responsive to developing country priorities rather than donor fashions.
What Actually Does Work: Lessons From the Ground
Given all the evidence about what has not worked, what does the empirical literature actually tell us about public sector approaches that have improved service delivery in developing countries? The findings are instructive and importantly different from the standard NPM prescription. They point not toward marketization and managerialism as primary drivers of improvement, but toward a different set of factors.
Strong political commitment from leadership matters enormously. The countries and sectors that have achieved genuine service delivery improvements — whether in Botswana’s diamond revenue management, Brazil’s Bolsa Família conditional cash transfer program, or Rwanda’s health system improvement — have almost uniformly been characterized by sustained political leadership that genuinely prioritized the outcome in question and was willing to invest in building the institutional capacity to achieve it.
Investment in frontline capacity — paying nurses, teachers, and agricultural extension workers adequately, training them properly, and providing them with the tools they need to do their jobs — consistently produces better service delivery outcomes than structural reforms that do not address the basic conditions under which frontline workers operate. A performance contract with a hospital director does very little for the patients in that hospital if the nurses are absent because their salaries are four months overdue.
Accountability mechanisms that are rooted in local social structures and that citizens actually use — community scorecards, citizen report cards, public expenditure tracking surveys — have in many contexts produced genuine improvements in service delivery by creating social accountability pressures that formal institutional oversight mechanisms cannot generate.
The Political Economy of Reform: Why Good Ideas Get Distorted
One of the most important insights from the developing country NPM experience is about political economy — the way that political interests shape how reforms are designed and implemented, often in ways that preserve the form of reform while gutting its substance. This is not unique to NPM, but NPM is particularly vulnerable to it because its core mechanisms — contracting, performance measurement, market competition — all create opportunities for political and rent-seeking behavior that can hollow out the reforming intent.
Performance management systems in practice often reflect the interests of the agencies being evaluated rather than the citizens being served, because it is agencies that define the metrics and agencies that report the results. Contracting processes in practice often reflect the preferences of politically connected contractors rather than the needs of service users, because it is political actors who award the contracts. Decentralization in practice often reflects the interests of local political elites rather than local citizens, because it is local political elites who control the decentralized structures.
Understanding that reforms operate in political economies — not in the clean, abstract space of management textbooks — is essential for designing reforms that actually work rather than just looking good in project documents. This requires a level of political economy analysis that both donor institutions and domestic reformers have historically been reluctant to apply, because it requires confronting directly whose interests reforms actually serve.
The Alternative Framework: New Public Governance and the Public Value Approach
As disillusionment with New Public Management has grown — not just in developing countries but in the developed countries where it originated — alternative frameworks have emerged that offer different starting points for thinking about public sector performance and service delivery. Two in particular deserve attention.
New Public Governance emphasizes collaboration, networks, and co-production between government agencies, civil society organizations, and citizens, rather than competition and market mechanisms. It recognizes that many public services are too complex, too contextual, and too value-laden to be effectively delivered through market mechanisms, and that the quality of relationships between government and citizens matters as much as the technical efficiency of delivery systems. This framework has considerable potential relevance for developing countries, where community organizations, religious institutions, and informal networks often play crucial roles in service delivery.
The Public Value approach, associated with Harvard’s Mark Moore, argues that the goal of public administration is to create public value — improvements in the well-being of citizens and communities — rather than to achieve efficiency or to satisfy customer preferences. It places more emphasis on the exercise of professional judgment and the cultivation of productive relationships between public managers and their political and social environments. This approach is more honest about the irreducibly political nature of public service than NPM, and potentially more realistic about the environments in which developing country administrators actually operate.
Health Service Delivery: A Case Study in NPM’s Limits
The health sector provides one of the most illuminating case studies of what happens when NPM-inspired reforms are applied in developing country contexts, because the consequences of failure are so directly visible and so immediately harmful. In the 1990s, many developing countries introduced user fees for health services — a classic NPM-inspired market mechanism intended to introduce cost-consciousness into health service utilization and generate revenue for service improvement. The evidence on the effects of health user fees in developing countries is now overwhelming: they significantly reduce utilization, especially among the poorest populations, producing worse health outcomes without generating meaningful revenue.
The lesson was eventually learned — user fees have been abolished or substantially reduced in many developing countries — but the delay between policy implementation and policy reversal cost lives. This is not merely an interesting academic case study. It is a reminder that the stakes of getting public sector reform wrong in developing countries are not measured in efficiency losses or public expenditure management metrics. They are measured in child mortality rates, maternal deaths, and preventable disease burdens.
Education Reform Through an NPM Lens: What the Evidence Shows
The education sector tells a similarly nuanced story. School voucher programs and education contracting with private providers — both NPM-inspired mechanisms — have been trialed in a number of developing countries with mixed results that defy simple conclusions. In some contexts, introducing competition and private provision has improved educational outcomes for some students. In others, it has produced cream-skimming, segregation, and deteriorating outcomes for the students least able to navigate market mechanisms.
The most robust finding from education reform research in developing countries is that what improves learning outcomes is not primarily the governance structure of service delivery — public versus private, centralized versus decentralized — but the quality of teaching. And teacher quality depends on factors that NPM reform pays insufficient attention to: adequate compensation, professional development, supportive school leadership, and accountability to communities rather than just to distant performance management systems. Structural reform that does not address the actual determinants of educational quality tends to rearrange deck chairs.
Technology and Digital Government: A New Hope or New Problems?
The rapid spread of digital technology across the developing world has created new possibilities for public sector service delivery that do not fit neatly into either the NPM framework or its alternatives, and that deserve separate consideration. Mobile money platforms, biometric identification systems, digital benefits transfer systems, and e-government portals have in many contexts genuinely improved service delivery by reducing transaction costs, cutting out corrupt intermediaries, and reaching citizens who were previously excluded from formal service delivery systems.
Kenya’s M-Pesa and its integration with government payment systems, India’s Aadhaar-linked benefits delivery, and the mobile-based agricultural extension services emerging across Africa represent genuinely new models of public service delivery that the old debates between traditional public administration and NPM did not anticipate. But digital transformation also carries risks — of exclusion for those without digital access, of surveillance and data misuse, and of efficiency gains that benefit connected elites more than marginalized citizens. Technology is a tool, not a magic solution, and like all tools, its effects depend on the purposes it is put to and the governance systems within which it operates.
The Local Context Question: Why One Reform Cannot Fit All Countries
Perhaps the most important lesson from four decades of public sector reform experience in developing countries is simply this: context matters enormously, and reforms that ignore context fail. This sounds almost trivially obvious, yet it continues to be violated by international institutions, management consultancies, and reform-minded technocrats who reach for universal solutions to problems that are deeply particular.
The institutional landscape in Rwanda is not the same as in Haiti. The political economy of Brazil is not the same as Pakistan’s. The civil service culture in Botswana is not the same as in the Democratic Republic of Congo. The patterns of state-society relations in South Korea are not the same as in Senegal. Reforms must be designed from a deep understanding of specific historical, institutional, cultural, and political contexts — not adapted from a menu of globally fashionable ideas and applied with modifications that are more cosmetic than substantive.
What Developing Country Governments Actually Need
Based on the evidence accumulated over decades of reform experience, what does the research suggest that developing country governments actually need to improve service delivery? The answer points toward a set of priorities that are quite different from the standard NPM menu. They need investment in basic state capacity — the ability to collect revenue, maintain personnel systems, manage public finances, and produce reliable data. They need adequate compensation and professional development for frontline service workers. They need accountability mechanisms that genuinely empower citizens to demand quality services. They need political leadership that is genuinely committed to service delivery rather than using service delivery reforms as political theater. And they need the space to design reforms that fit their specific contexts rather than implementing donor-prescribed packages that fit somebody else’s.
None of this is as intellectually exciting or as easily packaged as a comprehensive NPM reform program. It is slow, difficult, incremental work. But it is the work that actually improves the lives of citizens who depend on public services.
The Measurement Problem: Are We Evaluating the Right Things?
One of the deep methodological problems in assessing whether NPM improves service delivery in developing countries is the measurement problem. What counts as improvement? Standard NPM metrics — efficiency ratios, unit costs, response times, throughput volumes — measure what is easy to measure, not necessarily what is most important. They tend to capture outputs rather than outcomes, administrative processes rather than citizen experiences, what is quantifiable rather than what is valuable.
A clinic that processes more patients per hour may be delivering worse care if the speed comes at the expense of diagnosis quality. A school that improves standardized test scores may be achieving this by narrowing the curriculum in ways that reduce overall educational quality. A government agency that reduces its unit costs may be doing so by degrading service quality in ways that do not show up in its performance metrics. The measures that drive NPM reforms in practice often do not capture what citizens actually care about, and optimizing for the wrong measures produces improvements that are real in the statistics and fictional in the lives of citizens.
Looking Forward: Beyond NPM Toward Context-Sensitive Reform
The future of public sector reform in developing countries should be post-NPM, not in the sense of abandoning any useful insights from the NPM tradition, but in the sense of embedding those insights within a much richer, more context-sensitive, and more genuinely evidence-based approach to improving public service delivery. Some NPM insights retain value in the right contexts — the importance of results orientation, the value of competitive pressure in specific service domains, the case for managerial discretion backed by genuine accountability. But these are tools to be deployed selectively, not a philosophy to be applied wholesale.
The most promising direction for developing country public sector reform emphasizes building the foundational institutional capacities that make more sophisticated reforms viable, investing in the human capital of public service at all levels, creating accountability mechanisms that are rooted in local social realities, using technology thoughtfully as an enabler of human-centered service delivery, and respecting the particular institutional trajectories and political economies of specific countries rather than imposing external models. This is harder to sell to international donors and harder to announce in government reform programs. But it is what the evidence suggests actually works.
Conclusion
Does New Public Management actually improve service delivery in developing countries? The honest answer, supported by the weight of accumulated evidence, is: sometimes, in specific elements, in specific contexts, when implemented in ways that attend carefully to institutional preconditions and political economy realities. As a comprehensive reform package transplanted wholesale from developed country origins, the record is significantly more negative than positive. The failures are not mysterious — they reflect the entirely predictable consequences of applying context-dependent reforms in contexts for which they were not designed. What developing countries need is not more NPM and not a rejection of all that NPM has to offer, but a mature, evidence-based, context-sensitive approach to public sector reform that starts from citizens’ service delivery needs rather than from the fashionable ideas of any particular administrative tradition. The citizens waiting in understaffed clinics and under-resourced schools deserve nothing less.
Frequently Asked Questions
What are the main principles of New Public Management and how did they influence developing countries?
New Public Management is centered on introducing market mechanisms into public service delivery, giving managers greater discretion with accountability for results, using performance measurement and contracts, and treating citizens as customers. Its influence on developing countries came primarily through international financial institutions like the World Bank and IMF, which attached NPM-inspired administrative reforms to structural adjustment loans in the 1980s and 1990s. This created significant pressure on developing country governments to implement reforms regardless of whether they suited local institutional contexts.
Why have NPM reforms often failed to improve service delivery in developing countries?
The most consistent explanation in the research literature is the absence of the institutional preconditions that NPM requires to function effectively. These include capable regulatory bodies, functioning markets, effective accounting and auditing systems, enforceable contracts, and accountability cultures that make performance management meaningful. When these preconditions are absent, NPM mechanisms tend to produce gaming of metrics, increased corruption through contracting processes, and degraded capacity through ill-designed retrenchment programs rather than genuine service delivery improvements.
Are there any developing countries where NPM-inspired reforms have been genuinely successful?
Yes, some countries have achieved genuine improvements through selective and context-adapted adoption of NPM-inspired practices. Singapore, while atypical in many ways, has successfully incorporated performance management and competitive public sector salaries. Rwanda has achieved significant improvements in health service delivery through a results-oriented approach adapted to its specific context. Brazil’s Bolsa Família program incorporated accountability mechanisms that produced genuine outcomes. The common thread in successful cases is selectivity, adaptation, and investment in underlying institutional capacity rather than wholesale adoption of foreign models.
What alternative approaches to NPM exist for improving public service delivery in developing countries?
The most significant alternatives include New Public Governance, which emphasizes collaboration, co-production, and network management rather than competition; the Public Value approach, which focuses on creating genuine improvements in citizen well-being through the exercise of public sector judgment; and adaptive governance approaches that emphasize building contextually appropriate solutions rather than transplanting universal models. Practical strategies that the evidence supports include investing in frontline worker capacity and compensation, social accountability mechanisms, and appropriate use of digital technology.
How should international donors change their approach to public sector reform in developing countries?
The research evidence suggests that donors should move away from reform conditionality that forces developing country governments to implement standardized NPM packages regardless of context. They should instead support country-led reform processes that reflect genuine local priorities and context. They should invest patiently in building foundational institutional capacity — which takes time but creates sustainable improvement — rather than pushing for structural reforms that look impressive on project completion reports but do not translate into service delivery improvements. They should be genuinely open to learning from failure, including honestly evaluating and acknowledging when donor-prescribed reforms have caused harm.
Kathy Jane is a writer who specializes in public administration and media communication. She has 17 years of experience covering these fields and keeping up with their main trends. Kathy holds a BSc and an MSc in Mass Communication, giving her the skills to explain government and media topics in clear, easy-to-understand language.
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