Economic Rationality And New Public Management

Since late 1970s, a governmental reform movement named New Public Management (NPM) has arisen in the western developed countries. Aiming at improving the governmental economic rationality (economy, efficiency and effectiveness), NPM replaces the traditional bureaucracy by the market-driven model, challenging to Old Public Administration seriously. Acting as the main theoretical basis of NPM, New Political Economics (NPE) has great intellectual influence on the theory and practice of NPM, and provides an approach to understand the essentials of NPM. This dissertation analyzes NPE's intellectual influence on the theory and practice of NPM briefly at first. And then, it discusses the role of economic man hypothesis in this theoretical transition, and suggests that the spirit of economic man is the harmony between individual interest and public interest and it makes the incentive compatibility to become the core thought of public administration instead of control. Afterwards, it analyzes the theoretical relations between NPE (especially Public Choice Theory, Principal-Agent Theory and Transaction Cost Theory) and NPM in detail, implying that economic theories and methods establish the theoretical basis for NPM to grow up into an integral theory. At last, it discuss the limits of economic rationality in NPM's market-driven model, pointing out that NPM is lack of a robust responsibility mechanism and it makes real or latent harm to democratic politics. It concludes that the integration of NPE and NPM will establish a new approach for Public Administration study and it may be the most valuable contribution of NPM.