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Map out the nature of Public Sector in Bangladesh and its

strengths and weaknesses. Do you think New Public


Management can make a significant difference to our
public sector to eradicate its weaknesses?

Abstract
The concept of New Public Management is a management related philosophy
which has been used by the government since 1980s in order to modernize
the dimensions of public sectors. The concept of New Public Management
emerged in the late 1970s and early 1980s. New Public Management system
emerged as the dominant paradigm in public administration theory and
practice since the last 30 years determining its relation with markets and
private sector management. The dimensions and aspects of New Public
Management portray a more custom based approach rather than traditional
public administration. Most of the developed countries such as Australia, UK,
USA, and New Zealand adopted the concept of New Public Management to
refine the dimensions of their public sectors. Bangladesh also adopted vivid
reform discourses to transform the paradigm of public administration from
Weber's traditional bureaucratic system to the New Public Management
system. Bangladesh has been a British colony for about 200 years followed
by 24 years of Pakistan ruling. So the public administration and public
sectors are mostly based on system designed by the British. Since the
independence of Bangladesh, various types of efforts have been taken in
order to reform the system of public administration. But reform efforts
introduced after 1990 have been mostly ideas related to New Public
Management model in order to strengthen the public sector for producing
more effective results. But most of the initiatives to establish New Public
Management system have been futile in bringing about an effective and
result-oriented public sector in Bangladesh.

Introduction

The entire public administration system of Bangladesh is rooted from a


colonial legacy. Bangladesh was part of the British Empire for almost 200
years. In 1947 Pakistani rulers came into force and dominated East
Pakistan, then Bangladesh. Independent Bangladesh was born through the
liberation war of 1971. The colonial imprint exists in Bangladesh
particularly in political and administrative arrangements. The British
tradition established bureaucracy as an essential tool of governance.
While the Pakistani rulers helped to establish the tradition of engaging in
power politics. The political system of Bangladesh has encountered a
series of transitions. A few years of democracy were quickly followed by
almost fifteen years of military rule. Bangladesh achieved a fully
functioning democratic structure in 1990. Ironically, the nature and role of
bureaucracy in both the pre and post-democratic period remained almost
the same except for an increase in number of ministries, divisions,
departments and statutory bodies (Ahmed, 2002: 323-26). At the end of
forty three years of its independence, the country has hardly made any
progress and still suffering for the absence of good governance, fragile
economy, poor law and order situation, unstable political system,
uncontrolled

corruption,

unreliable

social

services

and

inefficient

bureaucracy etc. Interestingly, since independence the government


constituted 17 reform Commissions or Committees with a view to
reorganize/reform civil service and public sector. More than 20 reports on
Public Administration Reform have been prepared by these Commissions
and Committees and some of those reports were prepared at the initiative
of some of the important development partners, particularly the World
Bank, the United Nations Development Programme (UNDP), the Asian
Development Bank (ADB), the Department for International Development
(DFID), and the US Agency for International Development (USAID).But the
recent history of Public sector reform has become nothing more than a
sequence of reform studies and proposals, with little evidence of real
change. The present study is an attempt to find out some problems
regarding implementation of new public management, the current trend in
the world to reform and manage the public sectors.

Nature of Public Sector

The part of the economy which is concerned with providing various


government services is known as public sector. Bangladesh bears a
parliamentary form of government. The Prime Minister is regarded as the
Chief Executive and the President is known as the Head of the State. The
Cabinet is collectively responsible to the national parliament which is
headed by the Prime Minister. Public sector organizations are fully
responsible for the state tasks. The core principles of these organizations
include public interest and legality. Public sector organizations have the
legitimacy based on democratic representation. The nature and authority
structure of public sector are unitary and hierarchical. The government of
Bangladesh has committed to bringing basic public services to peoples
doorsteps. But the fact is that the government structure of the country is
highly centralized and also hierarchical. Therefore, it can be easily stated
that with such a centralized government structure, it is actually quite
difficult to offer the population of around 150 million people basic public
services. But many reforms have been taken to strengthen the structure of
public sectors since the last 10 years. The creation of a working
infrastructure is very essential for a developing country such as
Bangladesh to improve its economic condition. The public sector of
Bangladesh is concerned with providing basic public services to the
people. Public services in Bangladesh can be referred to as services
provided by the government to the people and community for their
betterment in terms of security, health, education etc. Public services in
Bangladesh provided by the government include electricity, police
departments, water supply, fire departments, education, health, waste
disposal and many more. The Bangladesh Public Service Commission
(BPSC) plays an essential role in ensuring the recruitment of competent
government servants. Recruitment, promotion, discipline, posting and
transfer of government servants are determined through the rules and

regulations set by the BPSC. The constitutional body is responsible for


ensuring that decisions concerning the public sector are made in line with
equity and merit. The nature of public sector in Bangladesh can illustrated
historically. The public sector in British period was basically concerned with
the administration and regulation of health, education, roads, railways,
defense, broadcasting, etc. Public sector did not play an active part in
areas like transportation and banking.

In the Pakistan period, the

emergence of public sector enterprises was very vital in supporting the


progress and development of the industrial capitalists. Enterprises in the
public sector were originally created with the intention of later transferring
them into private ownerships after ensuring profitability. State owned
enterprises were mainly used for the development of the economic
condition of the country. After Bangladesh became independent in 1971,
major changes were brought in the ownership and structure of the
enterprises of industrial, commercial and financial sectors. Later the
government encouraged competition between private and public sector
enterprises through formulating policies to promote private capital.
Merging of some public corporations and the creation of a few new
enterprises were done in order to refine and restructure the public
enterprises. The public sector enterprises of Bangladesh can be classified
as banking enterprises, non-financial public enterprises and financial
public enterprises. There are about 40 non-financial public enterprises
under 7 broad sectors. There are 4 nationalized commercial banks under
the financial sector. The transportation and communication sector include
many corporations. There are many lacking and constraints in the
structure control and management of the public sector in Bangladesh.
Four hierarchical levels are involved in controlling and supervising the
structure. The top level includes the political control which is exercised by
the minister and the government involving major policy issues. The
bottom level is engaged in controlling matters related to internal
management. The next tier is responsible for corporation control in terms
of supervision, coordination, delegation, etc. The third tier is involved in
ministerial control which is primarily of bureaucratic nature. An implied
accountability exists to the Jatiya Sangsad of elected representatives.

Strengths of Public Sector

The development of a country highly depends on the quality and efficiency


of the public sector. The working infrastructure of public sector plays a vital
role in ensuring the economic development of a country. The formulation of
effective public policies influences the regional economy of a country. Given
the right and efficient development policies, the public sector is capable of
bringing in broad benefits for the people and businesses of a country.
Through effective public services the needs of lagging or distressed areas
can be curtailed. The public sector is capable of addressing challenges and
opportunities throughout the economy of a country. The decisions taken by
a government significantly influence the economic environment of a
country. The public sector can play a vital role in strengthening the public
services of a country in terms of education, transportation, health,
infrastructure investment, banking, etc. The public sector has the power to
take more concentrated actions for economic development to assist
businesses and workers. Public sector can be considered as an important
instrument of self-reliance and a powerful engine to promote the economic
growth of a country. There are many attributes of public sector that can be
considered as its strengths. Public sector has the power to create and
expand infrastructure and thereby promote rapid economic development.
For development, financial resources are necessary; public sector has the
power to generate financial resources. The redistribution of income and
wealth can be promoted through public sector. Employment opportunities
can be created by the help of public sector. Public sector is essential for
promoting balanced regional growth. The development of small-scale and
ancillary industries can be encouraged through public sector. Through
efficient and effective policies, public sector can be used to promote
exports and imports of the country in order to encourage the overall
economic development of the country. The public sector provides services
for the people, particularly poor and vulnerable populations are benefitted

by the public sector. This can be considered as a strong point of strength of


public sector since better services improve the condition of the people.
Public sector also has the ability to remove geographic disparities in terms
of services, facilities, etc. Public sector can provide good public health
services for the betterment of the people. Public sector can be used to build
the basic infrastructure required for rapid industrialization. Therefore, public
sector can be used to broaden the industrial base of the country. Public
sector

can be

used

to

eradicate

unemployment

level

and

create

employment opportunities for the country. Public sector can be used to


provide facilities to the backward and vulnerable areas of the country.
Public sector can provide public services to these areas which can be used
to ensure basic civic facilities to the people such as electricity, water
supply, waste disposal, police security, etc. Public sector includes various
public services related to the following areas: electricity, education,
environmental
enforcement,

protection,
public

military,

security,

public

fire

service,

health

transportation,

care,

public

law

housing,

telecommunications, waste management, water supply network, banking,


etc. So it can be stated that the biggest strength of public sector is that
through its services in various areas, better living standard of the people
and development of the country's economy can be promoted.

Weaknesses of Public
Sector

There are also many limitations of public sector which can be considered
as its weaknesses. Organizations under the public sector are considerably
large, as result inefficiency occurs due to the size of the organization.
There is lack of motivation for government servants which affects the
performance of public employees. Absence of proper incentives for the
public employees is one of the reasons for slow-paced administration.
This absence of motivation factor also results in corruption. There is also

presence of the lack of responsibility among government servants since


the losses are bound to be met by the taxpayers. Political interference is a
big factor in affecting the efficiency of public sector. The existence of
hierarchical

bureaucracy

accountability

which

in

results

public

sector

often

in

inefficient

leads

public

to

diffused

services.

The

compensation rules of the government for public employees make it quite


difficult to encourage better performance. Therefore, as a result the
performance of public employees lacks quality because of the absence of
motivation. In public sector there is the absence of the existence of
market-driven competition, which contributes to poor performance of
public services provided by the public sector. The authority and
responsibility in public sector organizations tend to be asymmetric. They
are not clearly balanced. There is huge and enormous responsibility in the
public sector with limited authority. The existence of "whistle blowers" is
more active in the public sector due to job security. Therefore, this leads to
leakage of confidential information which creates a major impact in the
quality of services provided by the public sector in terms of work ethics.
Due to slow paced administration and management, public sector is often
very inflexible in taking contingency decisions. Corruption exists very
highly in public sectors of Bangladesh. Decisions regarding investments in
public sector lack proper evaluation, effective analysis and technical
feasibility. Also improper and inefficient planning leads to undue delays in
implementing projects. In public sector, many projects do not finish
according to time schedule. Public sector lacks proper planning, direction,
control and coordination in the implementation of projects. Therefore,
public sectors incur heavy losses while implementing projects. Another
problem of public sectors is over capitalization. They lack effective and
efficient financial planning and due to easy availability of money from the
government, public sectors often suffer from over-capitalization. One
serious problem of the public sector has been low utilization of installed
capacity. In the absence of definite targets of production, effective
production planning and control and proper assessment of future needs
many undertakings have failed to make full use of their fixed assets. The
management of public enterprises in our country leaves much to be

desired. Managerial efficiency and effectiveness have been low due to


inept management, uninspiring leadership, too much centralization,
frequent transfers and lack of personal stake. Civil servants who are
deputed to manage the enterprises often lack proper training and use
bureaucratic practices. Political interference in day-to-day affairs, rigid
bureaucratic control and ineffective delegation of authority hamper
initiative, flexibility and quick decisions. Motivations and morale of both
executives and workers are low due to the lack of appropriate incentives.

New Public Management (NPM)

"New Public Management (NPM) is a management philosophy used by the


government since 1980s to modernize the public sectors" (Ref: NPM in
Bangladesh: Policy and Reality by Farhana Ferdousi and Lisheng Qiu). NPM
primarily extracts management techniques and practices from the private
sector.

NPM

reforms

shift

the

emphasis

from

traditional

public

administration to public management. Key elements include various forms


of decentralizing management within public services (e.g., the creation of
autonomous agencies and devolution of budgets and financial control),
increasing use of markets and competition in the provision of public
services (e.g., contracting out and other market-type mechanisms), and
increasing emphasis on performance, outputs and customer orientation.
NPM reforms have been derived by considering the social, economical,
political and technological factors. Since the early period of the origination
of the conception of NPM, it was largely seen as a management related
philosophical concept used only to promote the economic growth of the
developed countries. But since 1990s the application of various NPM
techniques and concepts has been frequently used to accentuate the
economic growth of developing countries. NPM is a public sector
management theory that seeks to make government more efficient and
responsive by drawing out private sector techniques and creating market
conditions for the delivery of public services.

Importance of NPM to eradicate weaknesses


of Public Sectors

The concept of NPM can play a big role in removing weaknesses of public
sectors. The ways in which the features of NPM can be used to eradicate
weaknesses of public sectors are given below:

Encouraging proactive management - The public administrators


who are responsible for providing public services should be proactive
managers rather than reactive managers. Unlike traditional public
administrators, modern public administrators should have discretion in
making decisions and they should have direct responsibility in the
formulation an implementation of a policy. Under NPM, management lies
at the heart of the public sector activity. The public servants are viewed as
key players in improving the performance of public sectors.

Decentralization - As Falconer (1997: 92) states, during the 1980s and

1990 significant decentralization has occurred throughout many developed


countries. Decentralization can be used to improve the quality of public
services by increasing the use of voluntary sectors in the provision of public
services. Through this process the number of important public services can
be increased such as education, management of hospitals, etc. The
strengthening of local government can be achieved by the introduction of
market disciplines in local service provision and through devolution of
responsibility within the area of local government. Decentralizing
management, disaggregating and downsizing of public services are strands
of NPM derived from managerialism (Mellon, 1993; Hood, 1991; Ferlie et al.,
1996). The trend toward decentralized management in public services is part
of the effort to debureaucratize the public services (Ingraham, 1996:255) as
well as the layer of hierarchies within them.

Turning Bureaucracies into Agencies - One of the concepts of


NPM is to break up monolithic bureaucracies into agencies. Through this
process, agencies are required to conduct their businesses and relations with
each other and central departments' on a contractual basis rather than

through traditional hierarchy. This process ensure better quality of public


services as the functions of agencies include greater managerial flexibility
and greater accountability in terms of allocating human resources,
performance and delivery of public services.

Devolving Budgets and Financial Control - This is the second


element of decentralized public management and an important complement
to the creation of executive agencies. This may take the form of creating
budgets spending units. Devolving budgets and financial control involves
giving managers increased control over budgets for which they are held
responsible (Kaul, 1997; Walsh, 1995). This usually goes with the setting of
explicit targets for decentralized units. For example, according to Flynn
(1993:111), the British public expenditure planning process, in 1993,
incorporated 2,500 performance and output measures in addition to the
traditional approach of deciding how much money should be allocated to
each function.

Simplified Organizational Structure - This concept of NPM states


that the organizational structure of public sectors should be more concise.
Traditional tall hierarchies should be replaced with flatter and responsive
structures. This is an element of management decentralization. The vertical
integrated organizational structure of public sectors goes through a process
of simplification and delayering in order to provide cost-effective and better
delivery of public services.

Downsizing - This concept of NPM is very effective for upgrading the


quality of public services. Downsizing is an element of decentralized
management. This concept involves trimming the organizational structure of
public sector in order to gain a compact and simpler structure for the
provision of effective public services. Downsizing the public services also
improve the incentives and compensation facilities of the remaining
employees. Therefore, the motivation factor works in favor of employees
which gives higher productivity and greater efficiency in terms of the work of
employees.

Corporate Governance - The involvement of corporate governance is


an significant factor to develop the standard
contemporary economic environment.

of

public

sectors

in