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New public management approach in Uganda.

Bank of Uganda

This study has chosen Bank of Uganda as the case to examine New public management approach in Uganda.

The Bank of Uganda is the central bank of Uganda. Established in 1966, by Act of Parliament, the bank is wholly owned by the government but is not a government department. In 1979 and again in 1987, the Bank of Uganda managed to keep a currency rate of 7 shillings for 1 US$. Starting in 1987, the IMF backed the development of the Bank of Uganda, and completed its first stage of recapitalizing the central bank in 1997. At the AFI Global Policy Forum held in Riviera Maya in Mexico in 2011, the Bank of Uganda was one of the original 17 regulatory institutions to make specific national commitments to financial inclusion under The Maya Declaration. In June 2019, 7 directors of the bank were fired after accusations of printing their own money bills.

The board of directors of the Bank of Uganda is the bank’s supreme policy making body. It is chaired by the governor or, in his or her absence, by the deputy governor. The duties and powers of the board are specified by the Bank of Uganda Act. This Act makes the board responsible for the general management of the affairs of the bank. The board formulates policy and ensures that anything required to be done by the bank under the statute as well as anything else that is within or incidental to the functioning of the bank is carried out. The president of Uganda appoints both the governor and the deputy governor, on the advice of the cabinet , for five-year renewable terms. Other members of the board (not fewer than four and not more than six) are appointed by the minister of finance for three-year renewable terms. The secretary to the treasury is an ex-officio member of the board.

Definition of New Public Management (NPM)

According to Suwandi, Arifianti, & Rizal, (2019) New Public Management (NPM) is an approach in public administration that applies knowledge and experience gained in the world of management and other disciplines to improve the efficiency and effectiveness of public service performance in modern bureaucracies. New public management focuses on public sector management that is performance-oriented, not policy-oriented. The implementation of Good Corporate Governance in managing a company is very important because it can directly provide clear instructions in making appropriate and responsible decisions and enable safer management of the company so that it can increase the value and trust of partners or the community.

According to Nielsen, & Hedegaard Winther, (2019) The reorganization of public administration (PA) is targeting the size, costs, and objectives of the PA. Public labor is often downsized (e.g., through layoffs) that supports externalization. Public action was stopped by incorporating market principles and professional style personal management in bureaucratic organizations.

NPM has been accompanied by a process of decentralization and devolution in accordance with the principle of vertical subsidiarity, where agencies closer to citizens are considered capable of framing problems and implementing solutions. However, managerial, if not entrepreneurial, decentralization can negatively impact social participation, especially in social policy, while social risk can be delegated without adequate resources (Barberis et al., 2019).

Origin of new public management

The term new public management was coined by scholars from UK and Australia (Hood 1991 and Hood and Jackson 1991), who were working in the in the areas of public administration. Now, the origin of this new term was to propose a new point of view towards the organizational design in the public sector, however after a decade, the meaning of this term in discussions and debates became many. Some scholars choose to define it as the introduction of new institutional economics to public management and some used it to refer to pattern changes in policy making. Before we make an effort to further understand the various aspects of New Public Management, let us see how it is different from the traditional public administration.

The new public management which emerged in the 1980s represented an attempt to make the public sector more businesslike and to improve the efficiency of the Government borrowed ideas and management models from the private sector. It emphasized the centrality of citizens who were the recipient of the services or customers to the public sector.

New public management system also proposed a more decentralized control of resources and exploring other service delivery models to achieve better results, including a quasi-market structure where public and private service providers competed with each other in an attempt to provide better and faster services. [For e.g. In UK the purchase and provision of healthcare was split up between National Health Services or NHS and Government funded GP fund holders, this increased efficiency as the hospitals now needed to provide low cost procedures to win both patients and funds.).

Evolution of New Public Management

To better understand NPM, let’s discuss how it originated with the help of the following points according to Christensen, & Lægreid, (2017).

Weak Public Administration

The developmental public administration that developed in developed countries from the 1960s onwards weakened in the late 1970s. This administration was mainly run by the government. The Development administration almost failed to give sufficient socio-economic outcomes. Corruption and opacity were the main reasons behind the weakness of that public administration. So there was a need for a new kind of administrative system.

Important Administrative Reforms in the West

There are some reforms in western countries for quick recovery of administration. These reforms were largely influenced by New Rights Philosophy. This is one of the main sources for the rise of New Public Management.

New Right philosophy focuses on the free market, individual liberty, libertarianism, supply-side economics, monetarism, Thatcherism, Reaganomics, etc. it was first introduced by Margaret Thatcher (Former Prime Minister of the United Kingdom) and Ronald Reagan (Former US President).

The result of this economic reform is reducing the role of government. And the implementation of this requires a radical change in public administration. And that change is the new public management.

Minnowbrook Conference II (1988)

Another landmark step in the rise of the NPM was the Minnowbrook Conference II in 1988. As mentioned earlier, the 1980s saw some significant changes in the US political system under President Reagan. Some changes in state authority can be observed under the influence of neoliberalism.

On the one hand, there are some changes in the work of the government, the responsibilities and work of the government are reduced to some extent, on the other hand, the scope of private work is increasing. The conference is organized to analyze the form of public administration in the changed circumstances.

The critical aspects of this new model were:

Introduction of a more elaborate and evolved quasi-market system
Creation of more fragmented or loosely contracted public sector organizations at the local level setting in a change from management of hierarchy to management of contract
Distinguishing between the small strategic core and the large organizational periphery, market testing and contracting out the non-strategic functions
Delayering and downsizing
Introduction of new managerial concepts like Management by Influence, creating network for of organizations, creating strategic alliances between the organizations
Moving away from standardized service forms to more flexible and varied service forms

Evolution of new pubic management in Uganda

The government of Uganda adopted new public management in order to enhance better management of the country key sectors by specifically reducing bureaucracy poor leadership and mismanagement. Reduction and control of staff numbers to improve salaries and conditions of service, improving central government efficiency, greater discretion over resources, and rooting out corruption were common motives. Civil service reforms in Uganda has been successful at addressing structural problems such as overstaffing and low pay, as well as strengthening basic administrative systems including personnel and payroll checks. They have been less effective at eradicating poverty and improving service delivery. New approaches in public management have been successful where they involve results-oriented management, performance budgeting, and delegation of control and decision-making within the public service. These reforms are more politically sensitive because of the potential loss of government control.

Features of New Public Management

Although principals can be identified as features. However, for your convenience, I have highlighted some of the following features of the new public management from the above principles, (Reiter, & Klenk, 2019).

Citizen’s empowerment

Empowerment of citizens is one of the major features of New Public Management. NPM assures citizen’s freedom of choice. It secures quality services to the citizens. Healthy competition among the service and product’s sectors allow citizens to choose their service and products according to their needs and choice.

Decentralization

NPM focuses on the decentralization of power from rigid, hierarchical bureaucratic to flexible and dynamic managerial support systems.

Restructuring of Government organization or sector

New public management restructures the governmental organization or sectors. The government divides each of its sectors into smaller units and assigns responsibilities to the private sector through contracts.

Goal-Orientation

Its main purpose is to achieve specific goals. That is why NPM more emphasises on the outcomes rather than procedures and rules.

Cost Cutting and facilitates income growth

The main purpose of contracting out of governmental sectors is to reduce the cost of the government and secure maximum income of the government.

Managerial Support services

The main purpose of the managerial support services osto secure citizen’s quality service. For this reason the best talent from the market are hired by offering handsome salary, incentives and other benefits. NPM always suggests skill improving training programmes for getting maximum outcomes.

Secure better service to the citizens

It is already stated that the main purpose of implementing New Public management is to secure citizen’s quality services.

Conclusion

In conclusion, although the New Public Management was formed in protest of the excessive power of the bureaucracy, it also involved the limitation of state power and the expansion of the market system. The effects of liberalization, a market economy, and globalization have been felt by the developing countries and there have been some changes in the welfare character of the state. But the question remains as to how necessary a completely neo-liberal system and NPM is for developing countries. However, it is true that the NPM has been able to free the modern administration a lot from the undue discipline, rigidity, red tape and sluggishness of the bureaucracy.

The following are the New public management approaches adopted by B.O.U in the advancement of goals of the institution.

Administrative accountability, Accountability is important for effective performance in the public sector because both elected and non-elected officials need to show the public that they are performing their responsibilities in the best possible way and using the resources provided them effectively and efficiently. This is one of the key elements of public administration and when accountability is effective there is an effective use of government resources. In most of the developed countries there is accountability to the citizens by the government one of the examples of lack of administrative accountability was witnessed in 2012 US$12.7 million in donor funds was embezzled from Uganda’s Office of the Prime Minister (OPM) , though the money stolen was for rebuilding northern Uganda and Karamoja, while the suspects were never tried in the courts of law, this indicated that there is no accountability for public officials and this therefore indicates absence of public administration in these countries, however Bank of Uganda indicates administrative accountability.

In order to achieve accountability there is need to have transparency in governance of the government sector as this will ensure that the citizens are served promptly is imperative to achieve good governance. Transparency means that decisions taken and their enforcement are done in a manner that follows rules and regulations (Tijssen & Erika, 2018). Most of developing countries lack transparency in their institutions this is observed by that fact that there is lack of transparency in the old management system while the new approach of public management stresses transparency as the auditor general annually audits Bank of Uganda activities.

New public management approach in Bank of Uganda has helped in elimination of Corruption in the organization for example since there is generally high levels of corruption the estimate on record is that between 1970 and 2008, illicit financial flows were over $800 billion from Africa. The United Nations estimates that illegal outflows of capital from Africa totaled over $830 billion in the first 15 years of this century, much of it linked to movements of high-value commodities like gold, diamonds, and platinum straining the ability of the continent’s governments to provide services like healthcare, education, and infrastructure (Yeboah-Assiamah, et al., 2016).

Standardized process in management of its ware houses this has made it easy for improved quality control, shorter delivery time, greater efficiency through the use of information and communication components like internets, satellites among others that enables tracking and tracing of the goods owned by Bank of Uganda during shipment as well as giving up to date information to the stock in the ware houses.

Bank of Uganda has adopted an automated payment system. The cooperation has automated its payment system where the client can pay for r through use of mobile money and online banking system platforms.

There is a greatly reduced product delivery time by procurement department of Bank of uganda when a specific department places an order this indicates that there is efficiency in response to both the departmental and client need.

The ability by Bank of Uganda to monitor its projects and appoint a competent monitoring team is a sighn of a advanced management system employed by the organization. National water and sewerage cooperation ability to subcontract to competent suppliers enables the organization to be able to provide timely and High quality services efficiently, according to still (2015), argues that contracts are the life blood of the modern business. Without this vital legal glue, entering into arm’s length commercial deals would be fraught with peril yet for medium to large sized organizations contract management brings challenges of its own. This means that in order to rely on contracts, managers must ensure that their terms and conditions are largely defensible. According to the survey by the international association for contract and commercial management of 2008, there are fewer high value global contracts coming to the market and an increasing number of ‘second tier’ companies entering the market and seeking to secure smaller but potentially more complex contracts.

Accountability is a key requirement of New Public Management (NPM), not only governmental institutions but also the private sector and civil society organizations must be accountable to the public and to their institutional stakeholders. Who is accountable to whom varies depending on whether decisions or actions taken are internal or external to an organization or institution. In general an organization or an institution is accountable to those who will be affected by its decisions or actions (Onyango, 2020) According to the Ethics and Anti-Corruption Commission, Kenya is losing an estimated Kshs 608.0 bn (7.8% of Kenya’s GDP) to corruption annually. Reduced corruption is therefore crucial for the country’s development. The adoption of New public management by B.O.U therefore has been instrumental in enabling the organization fight corrupt tendencies.

In order to achieve good governance public formulators must ensure that there is Consensus, among the citizens either directly or through the members elected to represent the citizens. There are several actors and as many viewpoints in a given society. Good governance requires mediation of the different interests in society to reach a broad consensus in society on what is in the best interest of the whole community and how this can be achieved

Good governance is essential in achieving Equity and inclusiveness among the citizens and this in long run creates peace and harmony as the citizens will feel they are in control of their destiny. A society’s wellbeing depends on ensuring that all its members feel that they have a stake in it and do not feel excluded from the mainstream of society. This requires all groups, but particularly the most vulnerable, have opportunities to improve or maintain their wellbeing.

Simplified procurement process activities of Bank of Uganda, The introduction of information and communication technology has not only simplified the logistics process but has also improved on the whole supply chain process including control over suppliers, improved process cycle time, close cooperation relationships, improved supply chain efficiency, raw materials on time for suppliers.

Contract management presents opportunities that allow the contract manufacturers to achieve improved optimization through changes to production, process or organizational strategy. In addition firms, investing in project organization often do so in order to become flexible adaptable and customer oriented towards achieving efficiency in service delivery (Lind, 2008).The National Audit office (2008) indicates that focus is frequently placed on the procurement process itself than the implementation of the contract yet it is only after the contract is awarded that the benefits of the procurement process can be realized. Contract management if well-handled has the ability to decrease costs and improve service delivery, (South Africa: Contract Management Guide, 2010).

The Contract Management guide (2010) observes that practicing good contract management has the capacity to decrease costs and enhance service delivery thus guaranteeing the quality obtained. Responsibilities for managing service delivery must be clear and appropriately apportioned between the organization’s contract manager and its service provider’s representative for attainment of effective service delivery (UNOPS Procurement manual 2010: the UK Office of Government Commerce, 2008).

Easing communication with in the departments of Bank of Uganda, this is through the use of office landline telephones and other information communication technology systems like use of company emails. The adoption of the use of company emails by all employees has nabled the organization to reduce costs and increase profitability. E-mail is a process by which letters, orders or other documents are sent by a computer along telecommunication lines to appear on the Visual Display Unit (VDU) at their destination. They emphasize that incase organization use this technique in the process of buying, sending and receiving of messages can take minutes instead of days.E-mail will be based on sending and receiving of electronic messages, he states that e-mail will be available in the internet for over 20 years.

Bank of Uganda cooperation uses automated systems to enable it safely manage the stores system, the use of automated systems in the ware houses of Bank of Uganda therefore indicates that the organization is committed to reducing costs associated with the paper transaction. This review is included here because bar code systems are the foundation for many paperless warehousing systems, but the review is meant only as a brief introduction to bar code system. In logistics, bar coding is useful in receiving inbound materials. This helps in quick and accurate data entry, faster checking and clearing of shipments, automatic tracking of the shipments throughout the logistics.

Use of employee Electronic cards for opening the door for employees. Electronic cards are integrated circuit chips used to store employee specific information including Employee job designation, they have ability to provide intelligence and store significant amount of information of up to 20 pages of text. The following are the benefits of using smart cards; They offer convenience since they are of the same size like credit cards, They store reasonable amount of information and thus will be easier to be accessed by the organization for use at any time, They are economical and thus reduce on the handling fraud and They provide confidentiality and security of information. According to Enslow (2006), smart cards provide effective and efficient means of storage and compatibility, especially with EDI, which facilitates easy movement and exchange of information. The global use of smart cards will depend on the introduction of global payment standards that are currently being developed.

REFERENCES

Barberis, E., Grossmann, K., Kullmann, K., Skovgaard Nielsen, R., & Hedegaard Winther, A. (2019). Governance arrangements targeting diversity in Europe: how New Public Management impacts working with social cohesion. Urban Geography, 40(7), 964-983.

Christensen, T., & Lægreid, P. (2017). Transcending new public management. London: Taylor & Francis.

Reiter, R., & Klenk, T. (2019). The manifold meanings of ‘post-New Public Management’–a systematic literature review. International Review of Administrative Sciences, 85(1), 11-27.

Suwandi, I., Arifianti, R., & Rizal, M. (2019). Pelaksanaan Prinsip-Prinsip Good Corporate Governance (GCG) pada PT. Asuransi Jasa Indonesia (JASINDO). Jurnal Manajemen Pelayanan Publik, 2(1), 45.