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Review of the Concept of New Public Management

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Review of the Concept of New Public Management New Public Management in Charlotte, North Carolina: A Case Study of Managed Competition Kimberly Scism Eagle Dissertation submitted to the Faculty of the Virginia Polytechnic Institute and State University in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Public Administration / Public Affairs Larkin S. Dudley, Chair Susan T. Gooden James G. Svara Gary K. Wamsley James F. Wolf April 25, 2005 Richmond, Virginia Keywords: New Public Management, managed competition, Charlotte, normative theory. Copyright 2005, Kimberly S. Eagle New Public Management in Charlotte, North Carolina: A Case Study of Managed Competition Kimberly Scism Eagle ABSTRACT The practice and study of public administration has long included questions of efficiency, effectiveness, and economy. In the literature of the last decade, the New Public Management (NPM) movement argues that government should be run like a business and that entrepreneurial- based techniques should be utilized in an effort to enhance government performance. The normative perspective, however, raises counter ideas. The primary purpose of this research is to examine the impact of managed competition, a NPM technique, on four primary study areas including (1) democratic governance, (2) the politics administration dichotomy, (3) organizational effects, and (4) accountability. The study findings indicate that the economic model has had a significant impact on the four study areas to varying degrees. The theoretical propositions posed in the study center around principal-agent theory, public choice theory, and the market model and aid in reconciling the NPM perspective with normative considerations applicable to local government practice. Examining managed competition allows us to see how Charlotte has evolved in its attempt to meet demands from both perspectives. To Keith, for your enduring support, patience, encouragement, understanding, and love - without which this would not have been possible. iii ACKNOWLEDGEMENTS Completing his dissertation, and more importantly completing the PhD program, has been a group effort. I cannot sole take credit for this accomplishment for it is without doubt that many individuals played a role in making this dream a reality. First, there is my dear husband and best friend, Keith. There are not adequate words to describe the support you have provided. There would have been no way this accomplishment would have been possible without your unwavering encouragement, love and commitment. I cannot begin to thank you for sharing the vision and keeping me going when I was discouraged, angry, and most often – tired. You must have said “you are awesome”, “you will do wonderfully”, and “what can I do to help you” a thousand times. We share this degree as we share everything else in the life we have built together. This life now includes our son, John William, who provided a new motivation to finish this dissertation. John William, you are a source of inspiration and awe in my life and this degree is shared with you as well. Next, I must thank my parents, Eleanor and Gene Scism. You have provided encouragement in my academic pursuits. Continually reminding me that I could do anything I set my mind to has made a tremendous difference in my life. Learning that diligence and persistence pays off has been a product of my mother’s life-long reminder that the only limitations I face are those I place on myself. You have also helped make this possible by being there to do whatever needed to be done, from cleaning my house to keeping John William during these last few months so that I could utter that ever familiar phrase “I’m going to type.” Keith’s parents, John and Evelyn Eagle have also been a source of support and help for which I am grateful. Thank you for being there and for the encouragement you have provided along the way. Finally, I want to thank Gadsden, my Great Dane and study buddy! You have been with me throughout this entire process always ready to provide unconditional support by keeping me company during those late hours of study and providing some levity when I needed it. This dissertation represents the culmination of so many academic lessons for which I must thank the CPAP faculty, especially Larkin Dudley, my committee chair, and my committee members Gary Wamsley, Susan Gooden, Jim Wolf, and Jim Svara. I especially want to thank Larkin Dudley, my dissertation committee chair. She has been a teacher, counselor, advisor, and friend throughout this process and I am very grateful for the time you have devoted to my pursuits. Thank you for caring about my work and helping to make it the best it can be. It has been a true privilege to study under the CPAP faculty. Finally, I must also thank Rhea Epstein for answering many administrative questions and Missy Graham for helping to bring the administrative aspect of this up the home stretch. I also need to acknowledge those with whom I studied while pursuing this degree. Bethany Stich, Chad Miller, Tammy Trimble, Susan White, Nakeina Douglas and others have made the journey more bearable and much more bearable. I also want to thank several of my former Professors who had a significant influence on my development as a scholar, prior to the CPAP years. Thank you to my undergraduate History iv professor at Wingate College, Dr. Robert Billinger, for giving me several Cs and telling me that I had potential and that “I would do better.” To Dr. Dennis Grady at Appalachian State, who taught my very first graduate course in public administration, thank you for challenging me as a new graduate student with just the right mix of fear (of being unprepared) and encouragement. I appreciate your guidance throughout the MPA program and since. Thank you to Dr. Marvin Hoffman at Appalachian State, who taught my first budget class and pointed me to Charlotte- Mecklenburg Utilities (CMUD). Finally, studying with Dr. Stephen White in the Ed.S program at Appalachian State helped to prepare me for doctoral level study. Thank you for recognizing my potential and for encouraging me to do something with it. I am forever grateful to my friends and colleagues in Charlotte. I want to specifically thank Doug Bean, Reid Washam at Charlotte-Mecklenburg Utilities and Ruffin Hall and the City of Charlotte Budget and Evaluation staff. Your belief in my ability and contribution to the City has helped to make this achievement possible. Patti Lamb has been a tremendous source of support as well, always there to remind me to lighten up, to remember my accomplishments and ability, and to keep it all in perspective. I appreciate your continued interest and willingness to listen to me babble about dissertation ups and downs on a regular basis. Traveling with me to the defense and keeping me calm will forever be a memory I will treasure. Thank you for all you have done. Trille Mendenhall has also been a faithful friend and encourager during this process. Thank you for always reminding me that making the necessary sacrifices now would pay off in the end. You are so right! To those who helped technically bring the dissertation together, I thank you. Thank you to David Elmore for being a key source of information for the dissertation. A special thank you goes out to Cindy Odell for her valuable technical expertise in word processing. Cindy, I appreciate your help – more than you know. I am indebted to all of you, named and unnamed for the assistance you provided. I would also like to thank the interview participants for the access each of you granted me into your experiences with managed competition. Hopefully, it will start a dialog and spark future study that will inform the theoretical debate surrounding New Public Management. Last and most importantly, I must thank my Lord and Savior, Jesus Christ. For, I can do all things through Christ who strengthens me Philippians 4:13. v CONTENTS CHAPTER ONE STUDY INTRODUCTION AND IMPLEMENTATION OF NEW PUBLIC MANAGEMENT RESEARCH REVIEW Study Areas and Theoretical Propositions..........................................................................................3 Overview of Studies on Contracting and Managed Competition .......................................................4 Managed Competition Programs in Other Cities................................................................................8 Overview of Chapters .......................................................................................................................17 CHAPTER TWO THEORETICAL FOUNDATIONS Review of the Concept of NPM........................................................................................................20 Themes in NPM ................................................................................................................................27 The Normative Perspective...............................................................................................................34 Study Areas.......................................................................................................................................36 Implications.......................................................................................................................................45 CHAPTER THREE CONTEXT FOR THE STUDY Research Site – The City of Charlotte ..............................................................................................49 Implementation of the Managed Competition Program ...................................................................60 CHAPTER FOUR
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