THE ETHICS OF NEW PUBLIC MANAGEMENT: IS INTEGRITY AT STAKE?

Author(s): EMILE KOLTHOFF, LEO HUBERTS and HANS VAN DEN HEUVEL
Source: Public Administration Quarterly , FALL 2006-WINTER 2007, Vol. 30, No. 3/4
(FALL 2006-WINTER 2007), pp. 399-439
Published by: SPAEF

Stable URL: https://www.jstor.org/stable/41288276

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THE ETHICS OF NEW PUBLIC MANAGEMENT: IS
INTEGRITY AT STAKE?

EMILE KOLTHOFF
LEO HUBERTS
HANS VAN DEN HEUVEL
Vnje Universiteit, Amsterdam

ABSTRACT

Since the late 1980s, public administration has moved to a

more businesslike approach, commonly referred to as New Publi
Management or NPM. Output budgeting, privatization, competition a
commercialization receive more attention. The question has been raise
if too much identification with the style of the private sector might n
generate undesired effect, for instance in the area of public integrity.
In this paper a theory, based on existing knowledge is provided
about the possible negative, as well as the positive, effects on public
integrity of the introduction of businesslike methods in the public service
The overall conclusion of the paper is that the effect of
introducing businesslike methods in the public sector depends more on th
establishment of practical principles to ensure that these methods ar
exercised in an effective and ethical manner, than the introduction o
businesslike methods as such.

INTRODUCTION
In this paper we work toward a theory on the effect o
the introduction of NPM on public integrity. We de
public integrity for this purpose in a negative way, that is t
lack of integrity or, more specifically the level of integ
violations. The theory is based on a set of hypothes
derived from the literature and existing knowledge. When t
presented theory has been test in practice, it can contribute
a more ethical public administration by providing manag
with guidelines how to manage integrity in an N
environment.

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 400 PAQ WINTER 2007

First, the concept of New Publ

is briefly explored. What are the m
traditional Weberian concept of b
We conclude this paragraph wit
characteristics of NPM and the cl
violations that we will use as a fram
In the next part of the paper, th
between NPM and Public Integr
concepts as public entrepreneur
productivity. Finally, hypotheses a
a theoretical framework for empiric

THE BASICS OF NPM

In this paragraph the concept of NPM2 will be

explored in more detail starting with the principles of NPM
as distinguished by Pollitt (1993) and Walsh (1995). After a
brief detour along the Reinventing Government and New
Public Service developments we will conclude this
paragraph with summarizing the four characteristics of NPM
that we will use as a framework of reference. To complete
the framework of reference we will add the classification of
integrity violations to be used as the concept to relate to the
characteristics of NPM in the hypotheses.
The first principle of NPM is managerialism,
defined by Pollitt (1993: 2-3) as involving:
■ Continuous increases in efficiency.
■ The use of "ever-more-sophisticated"
technologies.
■ A labor force disciplined to productivity.
■ Clear implementation of the professional
management role.
■ Managers being given the right to manage.

Throughout its history the public sector has

intermittently rediscovered the need for a focus on

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PAQ WINTER 2007 401

productivity, performance and c

In the United States all new poli
Taft Commission in 1910 to the National Performance
Review in 1993 and the eight reform initiatives between
them - assume in the opening statements of their reform
visions that "....government is dysfunctional, fragmented,
badly organized, and incapable of performing at a level
acceptable to the public" (Huberts and van den Heuvel
1999: 6). Taylor had a significant influence on government
services before the First World War (Nesbitt 1976: 284)
and even Weber represented bureaucracy as a threat to
parliamentary democracy. Once bureaucracy is established,
he said, it becomes almost impossible to abolish. Moreover
it serves as a "power instrument of the first order - for the
one who controls the bureaucratic apparatus." Weber also
seems to doubt that even "the one who controls" can truly
do so, for bureaucracy is both indispensable to society and
highly technical and secretive in nature. The elected
politician, supposedly bureaucracy's master, becomes to
Weber an impotent dilettante (Gerth and Mills 1946: 228-
29, 232-33). The aim of managerialism is to gain more
effective control of work practices.
The second principle of the NPM is based upon
indirect control rather than upon direct authority. The
strategic center attains its objectives through creating
processes of management that involve appropriate
incentives and value commitments. The emphasis is not so
much upon managers' right to manage, as upon the need
for managers to be appropriately motivated and believe the
right things. The characteristics of the second principle of
the NPM are according to Walsh (1995):
■ Continual improvements in quality.
■ Emphasis upon devolution and delegation.
■ Appropriate information systems.
■ Emphasis upon contract and markets.
■ Measurement of performance.

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 402 PAQ WINTER 2007

■ Increased emphasis on au

The two principles of NPM a

first, Taylorist, principle is b
industrial production engineerin
public sector. It is not a rejectio
fulfillment. The second is based on
based coordination.
The argument for the introduction of market
processes is that it increases both efficiency and
accountability. Efficiency is argued to follow from the
clearer statement of what is to be provided, and the
pressure that results from consumer choice. The argument
for the greater efficiency of the market compared to
traditional bureaucracy is often simply asserted, with little
attempt at justification. In practice, the evidence of greater
efficiency of the new pattern of public service management
is limited. The evidence on effectiveness and the quality of
service is even more debatable (Walsh 1995: xix). Van
Mierlo (1995) mentions some examples and concludes that
the opinion that business organizations have succeeded
much better in fighting bureaucracy and bureaucratization
than government organizations, is based more on
speculation and prejudice than on the results of empirical
research.
A variety of market mechanisms have been
proposed and adopted for the reform of bureaucracy, apart
from outright privatization. The basis of organization is
changing from hierarchical authority to contracts and
markets. To some extent this change parallels
developments in the private sector, where there is a
growing use of contracts, internal pricing and outsourcing
of services.
A central feature of the NPM is the separation of
politics and management (Walsh 1995: xx).3 Politicians, it
is argued, should play a strategic role, deciding on broad

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 PAQ WINTER 2007 403

policies and setting targets for ma

involved in day-to-day oper
Commission 1990). This approach
route to overcoming the public ch
by Niskanen (1997) and others, wh
managers have an incentive to pad
of internal markets, performance
is seen as outweighing the incenti
voice of the 'customer' will be h
processes.

Steering, not Rowing: Reinventing Government

Osborne and Gaebler (1992: xix) use the phrase
entrepreneurial government to describe the new model they
see emerging across America. In their words, referring to
Say,4 an entrepreneur uses resources in new ways to
maximize productivity and effectiveness, and this
definition applies equally to the private sector, the public
sector, and to the voluntary, or third sector.
According to Osborne and Gaebler the key to
reinventing government is changing the incentives that
drive public institutions, or changing the markets that
operate within the public sector.
But market mechanisms are only half the equation.
Even the most carefully structured markets tend to create
inequitable results. Osborne and Gaebler (1992: 309) also
stress the other half of the equation: the empowerment of
communities: "To complement the efficiency and
effectiveness of market mechanisms, we need the warmth
and caring of families and neighborhoods and communities.
As entrepreneurial governments move away from
administrative bureaucracies, they need to embrace both
markets and community."
The question raised here, is why so many critics
have attacked the ideas of Reinventing Government.
Osborne and Gaebler describe successful projects and

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404 PAQ WINTER 2007

experiences that merely focus on

for less money by cutting down
and creating opportunities fo
cooperation. Sometimes the b
atmosphere of the New Public S
Denhardt and Denhardt (2000). On
and Gaebler do not develop their
of communities, and the words v
are non-existent in the 405 page b
Contrary to the belief of most
practitioners and even reinventin
does not recommend that governm
(Cohen and Eimicke 1998: 6). In fa
(1993: 20) conclude that the differ
and private sectors are so funda
cannot be run like a business. Wh
government needs to become
Entrepreneurial government seek
areas of lower return to areas of hig

Serving, not Steering: New Public

Some opponents of the reinv
movement have initiated the draft
public service.
DeLeon and Denhardt (2000
aspects of the reinventing movem
the emphasis on customers,
management. According to them t
market model, a long-standin
administration that governme
business. For the most part, this r
that government agencies should
from scientific management to to
that have been found useful in
reinventing movement takes th
arguing that government sho

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PAQ WINTER 2007 405

techniques of business administ

adopt the values of business.
entrepreneurial management -
references to values. According
entrepreneurs create and innov
the entrepreneur is characterize
unwillingness to follow rules an
and a preference for action s
accountability - all values opposed
traditional for the public sector
even argue that entrepreneurship
personal vision, secrecy, and
opposite to administrative val
accountability, participation, op
DeLeon and Denhardt conclude th
to administrators who support th
that they should recognize th
governance that they are rejecting
civic engagement, and the publ
suspect, will feel uneasy when
moving away from such fundame
Denhardt and Denhardt (2000
public administrators influence, a
of the competing standards, value
complex U.S. governance system
influence, and are influenced by
they also represent points of acco
a "New Public Service" instead of "New Public
Management" under the slogan "Serving rather t
Steering." They conceive of the New Public Serv
approach as a viable third alternative to the obse
dichotomy between "the old public administration"
"the new public management." Maesschalck (20
describes how the new public service authors largely
the traditionalist group in their negative assessment of
ethical consequences of NPM reforms but do not ag

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 406 PAQ WINTER 2007

with their solution (Frederickson

O'Toole, 1995). They propose new
"the primary role of the public se
articulate and meet their shared interests rather than to
attempt to control or steer society" (Denhardt and Denhardt
2000: 549).

Framework of Reference
The developments described here were labelled
with the term NPM because some generic label seemed to
be needed for a general, though certainly not universal,
shift in public management styles (Hood 1990: 205-214
and 1995: 94). The term was intended to cut across the
particular language of individual projects or countries. The
analogy has terms like new politics, new right, and new
industrial state, which were invented for a similar reason.
The term "new" does not imply that NPM doctrines
appeared for the first time in the 1980s. Many of them
repackage ideas which have been in public administration
since it earliest beginning. Nor must NPM be confused with
the New Public Administration movement in the USA in
the late 1960s and early 1970s, which achieved according
to Marini (1971) no real mainstream influence.
According to Hood (1995: 98), OECD countries
varied in the extent to which they moved to adopt NPM
principles during the 1980s, and there were marked
differences even within similar family groups such as the
English-speaking "Westminster-model" countries.
Further reform initiatives also showed these
differences. Clark (2004: 491-510), for example, concludes
in a recent comparative study on the implementation of
"Third way" management reform that the outcome of
reform in Quebec is likely to be the opposite of the UK
case, with weaker institutionalization of performance
management and a correspondingly stronger renewal of
local governance. Case studies by Yesilkagit and De Vries

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 PAQ WINTER 2007 407

(2004) on the Netherlands an

contrary to the claim advanced
management reform studies, that
be implemented in consensus syst
Based on a study of NPM reforms in the
Commonwealth countries, which includes both
economically advanced OECD nations and developing
countries, Borins (1998) states that in countries where the
rule of law is tenuous or where newly-democratic
governments are seeking to establish themselves after a
long period of one-party personal rule, concern with service
delivery may be associated less with the quality of services,
measured by the timeliness, efficiency, and courtesy with
which they are delivered, and more with the integrity of the
service, gauged by the prevalence of corruption or
discrimination and the consistency of delivery.
Clarity about our framework of reference is vital at
this stage. Because the manifestations of the businesslike
approach are very diverse, a breakdown by main
characteristics seems appropriate. As a guideline with
respect to businesslike approaches we will start with the
breakdown by topics as designed by Pollitt and Bouckaert
(2004). They distinguish trajectories in Finance, Personnel,
Organization, and Performance. We combine these with
the five core principles of the NPM approach as
distinguished by Hays and Kearney (1997): (1) downsizing
- reducing the size of government; (2) managerialism -
using business protocols in government; (3)
decentralization - moving decision making closer to the
service recipients; (4) debureaucratization - restructuring
government to emphasize results rather than processes; and
(5) privatization - directing the allocation of government
goods and services to outside firms.6 These two approaches
are partly overlapping and partly supplementary. Derived
from these we distinguish the following four aspects of
NPM for our study:

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 408 PAQ WINTER 2007

■ Downsizing and Entreprene

- privatizing
- outsourcing
- temporary employees (through commercial
agency)
- public-private partnerships
- involvement with the private sector
- introducing (internal) market models
■ Decentralization
organization
budgets
authorities
discretionary power
■ Performance measurement
organizational performance targets
personnel
performance indicators
contracts

■ The use of a planning and control cycle

output budget
use of performance information
feed back on results

All of the above elements fit in with Pollitt's

aspects or with the principles as described by Hays and
Kearney. However, the label may vary. One could place the
planning and control cycle under Pollitt's aspect of finance
but also under the Hays and Kerney principle of
managerialism. And performance measurement could also
find a place under the planning and control cycle, and so
on.

Since it is our objective to develop theory on the

relationship between NPM and public integrity, we should
also be clear about our understanding of the concept of
public integrity. We approach integrity as acting in

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 PAQ WINTER 2007 409

agreement with the relevant m

norms and rules. This means that
research we focus on manifestatio
intentions or underlying values. T
framework that Bowman, West,
present as the Ethics Triangl
complementary and interdependenc
the thoughts of the different ethica
and results (Bowman, West, Berm
71)
In our view the manifestations of integrity
violations vary from corruption to social behavior in the
working environment. To draft proper conclusions on the
effect of the introduction of businesslike approaches on
public integrity in general, a breakdown into categories is
necessary. We will use the classification of integrity
violations as developed by Huberts (1998: 28-30).7 Huberts
discerns:
1 Corruption, including bribing, 'kickbacks',
nepotism, cronyism and patronage (with gain for
oneself, family, friends or party)
2 Fraud and theft of resources, including the
manipulation of information to cover-up fraud
3 Questionable promises, gifts or discounts.
4 Conflict of interest through jobs and activities,
outside the organization (e.g. 'moonlighting')
5 Improper use of violence towards citizens,
suspects
6 Other improper (investigative) methods of
policing (including improper means for noble causes)
7 Abuse and manipulation of information
(unauthorized and improper use of police files; leaking
confidential information)
8 Discrimination and (sexual) harassment; indecent
treatment of colleagues or citizens

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 410 PAQ WINTER 2007

9 The waste and abuse of org

including time
10 Misconduct at leisure (dome
driving, use of drugs etc.).

One should note that numbe

specific police topics that sho
conducting research in other publi
In the following sections w
different opinions on the relatio
public integrity. Most authors foc
or specifically on corruption as a m
behavior. The influence of NPM
integrity will, apart from cases of
distinguish on the basis of the
research that we propose at the
answer this question.

INTEGRITY AND NPM

Bovens (1996b: 125) observed that corruption and

public integrity were back on the agenda in many European
countries despite there being, according to him, no
empirical data available to confirm this generally accepted
picture of a public service tainted by corruption.8 Bovens
suggests that the huge discrepancy between public concern
and empirical data might be due to the fact that conviction
might be only the tip of an iceberg, a declining respect for
public authorities and the legitimacy of public policy in a
climate of cutbacks in public spending and funding
However, these factors do not explain completely the raise
in public concern. Bovens raised the question whether the
actual situation might not be that government has indeed
become less unimpeachable, however this change cannot be
traced in the criminal statistics?

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 PAQ WINTER 2007 411

To answer this question Bove

closer look at the type of cases
rise to public debate and media
Bovens many of these cases did
could be considered corrupt in th
criminal code.9 They involved, fo
issues:10
■ Business presents, business trips and other perks.
■ The sale of a municipal camping site to (former)
municipal officials.
■ Private enterprises of civil servants.
■ The commercial operation of the Amsterdam police
training center.
■ The contracting-out of municipal catering services (to
an allegedly criminal organization).
■ Extra bonuses and salary packages for top civil servants
and agency heads.
■ Agency heads subcontracting with firms they were
personally involved in (through stocks, board
membership or personal relations).

All of these rather diverse cases have in common

that they involve activities of the kind that we explored in
the paragraph on NPM. None of the cases involved bribes
in the strict technical sense. Therefore, the cases did not
proceed beyond the level of public and political upheaval;
no criminal investigations were started. However, they did
provoke public discussion. How far can one go when
introducing market values into government? This and other
questions would not have arisen one or two decades ago.
All of these cases and questions are related to what Bovens
calls the "managerial shift in Western government,"
referring to Lane (1994).
Lane also distinguishes drawbacks in this
transformation process. The public administration
framework cannot easily be replaced by the new

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 412 PAQ WINTER 2007

management approach, as the f

covered by the latter (Lane 1995:2
not be able to meet the non-pecun
the public sector, in particular t
legality and its various values. The
sector than efficiency. The notion
the public sector, but where doe
market framework?
An outspoken opponent of th
H. George Frederickson, who sets out a model of
government ethics: '/n democratic settings government
agencies and their officials in bureaucratic hierarchies are
more ethical than self-interested individuals or firms in
competitive markets (Frederickson 1999: 300).' He argues
that both the logic and the effects of the new managerialism
move democratic government further away from the
prospects for an influential and selfless public service. Box,
Marshall, Reed and Reed (2001: 608) argue that today's
market model of government in the form of NPM goes
beyond earlier "reforms," threatening to eliminate
democracy as a guiding principle in public-sector
management. They offer an alternative in the form of a
collaborative relationship between citizens and public
administrators. Responsiveness in the market model
suggests that democracy requires administrators who are
responsive to the popular will and that only by creating a
market-derived environment can government and public
administration adopt some necessary reforms that will
improve their performance, effectiveness and efficiency.
According to opponents of this approach responsiveness is,
at best, a necessary evil that appears to compromise
professional effectiveness and, at worst, an indication of
political expediency if not outright corruption (Rourke
1992). According to this line of argument, responsiveness
contradicts the value of professionalism in government and
public administration. The second approach to trying to

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 PAQ WINTER 2007 413

bridge the concepts of responsive

Vigoda (2002: 528) suggests an i
between the two.
Frederickson (1999: 300-302) p
axioms to defend his model that he himself believes to be
both empirically verifiable and deductively demonstrable.
The axioms are:
1 . Most forms of government corruption
occur at the point of transaction between officials formally
representing government authority and the use of public
money on the one hand and individuals or organizations
seeking money, favor or influence on the other hand. In this
assumption the key is the 'point of transaction.'
2. Absent democratic government, laws,
rules, social conventions and/or social reciprocity, rational
persons and firms will act on the basis of self interest.
3. Under conditions of democratic
government, government institutions are more public-
regarding than either non-governmental institutions or
public firms. It follows then, that the values of justice,
equality and equity are greater in governmental institutions
than in non-governmental institutions or private firms.
4. Efficiency values are greatest in private
firms in perfect markets. As market imperfections increase,
efficiency decreases.

This leads us to the topic of values in the public and

the private sector, being part of organizational ethics.
Many authors have tried to sum up the basic
common values involved in the public as well as in the
private sector. Others distinguish between the two sectors
as Lane did. What are the core values of both areas? And
how do public and private sector values relate to one
another? The answer is not an easy one. Contradictory
visions can be found in published literature. An attempt of
comparing the two can be found in the contribution by van

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 414 PAQ WINTER 2007

der Wal, Huberts, van den Heu

issue. And is it indeed a matter of
or is there also a more general e
values? Lyons, Duxbury and Hig
hypothesized in a recent study th
employees would place significa
values of benevolence and unive
more importance on values relate
and hedonism. Furthermore it
younger employees place signifi
altruism and significantly more i
their work. The results supported
For the purpose of this arti
stresses that there is a fundamental conflict between the
moral foundations of the public and the private sphere is
interesting. Its most prominent representative is Jane Jacobs
(1992: xii) who describes in her book about moral
syndromes, Systems of Survival a commercial moral
syndrome and a guardian moral syndrome. Both are valid
and necessary moral systems. However, organizations will
sink in "functional and moral quagmires ... when they
confuse their own appropriate moral system with the
other."
The primary source for the proposition of Jacobs is
Plato's Republic. In Plato's masterpiece the principle in
accordance with which the city was founded is the principle
that one man should do one job: the job for which he was
best adapted. To be just is to attend to one's own business
and not meddle in what is not one's concern (Jowett 1970).
Warnings against the confusion of morals often lead
to doubts about practices from the commercial world being
applied to the public sector and thus transforming
governmental agencies into hybrid organizations with,
according to some authors, an increased risk of integrity
violations (Jacobs 1992, Denhardt and Denhardt 2002, and
Frederickson 1996). The focus is often on imaginable

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 PAQ WINTER 2007 415

problems for public sector offic

with the temptations of the mark
that is considered prestigious i
corrupt in the public sector.

ETHICAL PUBLIC ENTREPRENEURSHIP?

So, fears are often expressed that exposin

managers to the private sector values might cause them
lose their integrity. But also the implementation
techniques and tools from the private sector into the pub
sector can involve integrity breaches, according to s
authors (Bovens and Hemerijck 1996a).
How real is that fear? Empirical research should b
able to answer that question. Lawton (1999: 69) states
"the evidence is thin on the ground." Integrity is linked
role, to office and to concepts of trust. Apart from the
personal qualities, we will trust the head teacher, the po
sergeant, and the doctor because of their profession
their expertise.11 Lawton continues that "their professi
integrity will require them to act on behalf of the citize
Or in other words: the integrity of public professionals
not be affected by contacts with the private sector.
Elsewhere, Lawton adds that there is also little
evidence that public sector integrity might be undermi
by the NPM trend: "Arguments that in adopting pri
sector techniques, practices and people, the public ser
ethos is somewhat corrupted are not convincing (Law
1998: 65)."
Taylor (1999: 91) even goes a step further,
discussing the relationship between the Australian
Department of Defense and the defense industry. He
stresses that the interface with the private sector needs to be
carefully managed and that one of the lessons of the
interaction with the private sector is: "Do not assume that
the public sector is more ethically aware than the private

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 416 PAQ WINTER 2007

sector." In other words: develop

sector can contribute toward maki
ethical.
Bovens (1996b: 130) speculat
public debate about integrity can
the possible dangers. Once most of
charted, protocols can be dr
implemented that provide some
institutional security12. Bovens r
experiences of large corporation
with these issues long before. H
parts of the managerial shift
perplexities, according to Bovens.
managerial novelties, such as pub
private enterprises of civil serv
centers, will continually result
integrity of government. The reas
they do indeed involve a hybrid
moral values, as they introduce co
guardian practice." Bovens (1996b: 132) sees two
possibilities for the future of the integrity of the managerial
state. The first one is decomposing it into its two separate
parts: All the commercial elements will then, through
privatization, be performed by private organizations. In the
second option, once the managerial approach has become
accepted, the integrity of the managerial state might turn
out to be basically a managerial problem. Combinations of
commercial and guardian activities within one single
agency or branch will pose formidable challenges for
institutional design and managerial integrity.
In the Netherlands, the Market and Government
Working Group of the Department of Economic Affairs
also recognized the risk of integrity violation as a result of
the businesslike approach to government (Market and
Government Working Group 1997). In its final report the
Working Group concluded:

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 PAQ WINTER 2007 417

"If government organizations

activities in addition to their pu
rise to questions regarding the
primary task. This can create s
public service itself (Market an
Group 1997: 14). "
The Working Group sugge
solutions that were adopted by th
were meant to be included in nati
they elaborate on the first solutio

Fig. 1. Solutions for unfair compet

Overheid, 1997).

1: Eliminate u
factors competition

Structural solution-.
Segregate and dispose of Privatization
commercial activities
Private providers, subject to
conditions
Rules of conduct solution: Tendering
Eliminate inequalities as much as
possible

It seems safe to assume that the Working Group

focused on commercial activities performed by public
agencies. It is necessary to distinguish this kind of public
activity from "simply" adopting practices for efficiency
purposes from the business sector.
The research by van Helden and Jansen (2003: 17)
into adoption of NPM styles in Dutch local government
indicates that some elements (such as "performance-related
pay") are used only to a limited extent, whereas other
elements (in particular increased vulnerability of top
management) are increasingly important. Moreover, the
behavioral impact of newly developed NPM instruments,

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 418 PAQ WINTER 2007

such as the actual use of perfor

planning and control, as well as fo
was limited. Although NPM ma
more important, the attention fo
increased as well, probably, acco
Jansen, as a defence shield ag
business ethics.
Frederickson (1996) used the Orange County14 case
to present a very strong argument against the reinvention
principle of enterprising government - that public officials
should look for opportunities to earn rather than to spend
money. Frederickson (1997) argues that business and
government have very different goals and therefore the
techniques of private sector entrepreneurship are seldom
appropriate and often result in unethical behavior by public
officials. Frederickson also argued that corruption and
unethical behavior in government are on the rise because
we are trying to run government organizations as if they
were businesses.
Cohen and Eimicke (1999) look at four other cases
of public entrepreneurship and conclude that although they
share the view that entrepreneurial government increases
the danger of corruption and ethical misconduct, they are
convinced that entrepreneurship in government is needed,
frequently demanded and can be ethical. What is needed,
they continue, are better guidelines for practitioners to use
the potential benefits of public entrepreneurship effectively
and ethically. Cohen and Eimicke argue that the cases
discussed as well as their experience indicate that even the
most able public officials are not fully equipped to
determine the degree of risk in a particular innovation and
accurately assess the ethical questions it may encompass.
Neither are they clear about the proper process to follow
when seeking to make decisions regarding risk, innovation
and ethics. The solution is not to discourage public
entrepreneurship but rather to establish practical principles

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 PAQ WINTER 2007 419

to ensure that it is exercised in an effective and ethical

manner (Cohen and Eimicke 1999). 15 Cohen and Eimicke
(2002: 233-235) provide five guidelines for public servants
seeking to assess the prudence of a public entrepreneurial
venture, as a counterbalance to lengthy ethical statutes and
detailed booklets from ethics commissions often getting
mired in advising what one should not do, providing little
useful advice regarding the best course of action in a
difficult situation:

Seek justice under the law.

Serve the public interest.
Ensure thorough analysis.
Act with compassion and empathy.
Take personal responsibility for decisions.

ACCOUNTABILITY

The defenders of the traditional public

administration paradigm may be willing to accept that
government could benefit by employing the management
techniques of business. Nevertheless, these defenders insist
that the nature of government, particularly the nature of
accountability in government, is fundamentally different
from the nature of accountability in business (Behn 2001:
Ch.2).
According to Terry, adapting the private sector
concept of the entrepreneur to public administration is both
"inappropriate" and "dangerous." He argues that "we
should abandon the misconceived quest to reconcile public
entrepreneurship with democracy. Public entrepreneurs
pose a serious threat to democracy because of the nagging
accountability problem (Terry 1998)." Government must be
accountable to the entire citizenry, not just to a select group
of stakeholders. One important feature of this
accountability is fairness. Peters notes that: "The issue of

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 420 PAQ WINTER 2007

equality raises important question

the law. How can public managem
fair? Isn't this why we have a gov
or women? (Peters 2001)
However, government is supp
money prudently and to treat e
supposed to accomplish public purposes. Moore
emphasizes that all of the rules and procedures (even if
followed) do not necessarily guarantee that government
treats citizens fairly: "It is no longer clear that police
organizations can be free of error, corruption, and brutality
by applying tighter rules, closer supervision, and stricter
penalties for misconduct. Indeed, this bureaucratic
apparatus increasingly looks like an expensive way to
produce the form but not the substance of a disciplined,
effective force (Moore 1994: 201)." Accountability for
finances and accountability for fairness reflect concerns for
how government does what it does. But according to Behn
(2001: 10), we also should care about what government
does - what it actually accomplishes. This requires a third
kind of accountability - accountability for performance.16
Here we talk about the consequences of government action.
In analyzing personnel systems, Romzek and
Dubnick distinguish between those that are accountable and
those that are flexible. "Certainly we need government's
personnel systems to be accountable for fairness. But why
do we need them flexible? Because (presumably), if line
managers have more flexibility, they will be able to employ
and deploy people in a way that improves performance.
Flexibility itself is not an important political or even
managerial value; flexibility is important only to the extent
that it helps produce better results. Indeed, if we want to
hold public managers accountable for performance, we
have to give them some flexibility (Behn 2001 : 40, Romzek
and Dubnick 1994)." Based on the findings of a larger
study designed to compare the performance evaluation

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PAQ WINTER 2007 421

initiatives adopted by Chile, Col

Uruguay, Ospina, Grau and Z
distinguish a planning-oriented m
oriented model. The planning-o
performance evaluation in the public
least in some countries, enhanced democratic
accountability is given as much importance as improved
efficiency, effectiveness or service quality.
Behn (2001: 217) concludes his work on
Democratic Accountability with the statement that
adversarial accountability works too well. By "too well" he
means "that our existing institutions of accountability not
only overemphasize accountability for finance and fairness.
They also undercut performance. Indeed they undercut the
capacity of government's productive units from achieving
the results they were created to pursue.17 We need to
rethink what we mean by democratic accountability."

PRODUCTIVITY

Via accountability we reach the topic of

productivity. Berman and van Wart (1999) define
productivity as "a set of management practices and
analytical techniques that aim at increasing the effective
and efficient use of resources to produce outcomes."
According to Bowman, West, Berman and Van Wart
(2004: 24), pressures to improve productivity are features
of both the old and new public service. The idea that values
and ethics are important in productivity - indeed, that they
are central to goal setting and implementation - is
according to Berman and van Wart not widely shared by
scholars and practitioners in public administration. "The
engineering perspective frequently takes productivity
objectives as given, and identifies the most efficient ways
of achieving these goals." Berman and van Wart refer to
Lewis (1991), who argued that ethics are concerned with

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422 PAQ WINTER 2007

the rules and standards for dete

conduct and behavior. According t
ethics are involved in (1) determ
objectives are established; and
productivity improvement is
reasoning is also involved (3) when
or justify the above decisions, for
to prioritize some objectives above
Public managers are faced wit
of stakeholders (not just customer
private-sector managers, with a m
demands for activities in which t
more complex set of obstacles th
improve and create value (Behn 20
Berman (1998: x-xi) argues tha
cannot be applied to public or
manner as in business. Produc
influenced by the goals of pu
productivity strategies must be ad
context of the public sector, and
this sector as well. Public organiza
than private goals, measure succes
single standards (effectiveness,
inclusiveness rather than profitab
different constraints.
According to Berman (1998: 7)
often define productivity im
effectiveness. This does not m
unimportant in public organizat
organizations stretch their resourc
more effective. However, there is
is typically a more important g
where success tends to be more sin
Some business texts even define p
Finally, public and business organ
regard to the extent that they val

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PAQ WINTER 2007 423

goal. Profit organizations us

commitment to equity, other tha
lawsuits from their employees
public organizations often hav
equity; they must provide service
of their ability to pay for them
access to services. In figure 2
different productivity values is su

Efficiency

Effectiveness

^Equity

Public Profit organizations

Fig. 2. The importance of productivit
from Berman (1998: 9.)

Measurement is a foundation fo
improvement. It is consistent with pr
accountability, openness, and maintainin
and many organizations need manage
with the ability to measure program
1998:51).

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 424 PAQ WINTER 2007

The importance of ethics incr

emphases shifts from program ef
effectiveness of services accord
standards and using empower
purpose. Berman argues that a m
organizations and managers is to
ethics and productivity improvement. Effective
productivity improvement requires ethical behavior, ethical
attitudes, ethical dialogue, and organizational policies and
practices that are consistent with furthering ethics (Berman
1998: 272). The objectives of productivity now emphasize
effectiveness over efficiency (which is still relevant), and
dependability and responsiveness over conformity to
external standards.
Failing in aligning productivity improvement with
ethics and ethics management can cause integrity violations
for the purpose of achieving productivity goals.

CONCLUSIONS

On the basis of the literature we can conclude that

scholars do neither agree about the intensity nor on the
direction of the relationship between ethics and NPM. The
debate revolves mostly about the question of whether the
increasing cooperation between the business and the private
sector and the introduction of businesslike techniques and
attitudes into the public sector, leads to more integrity
violations.
Most of the warnings against introducing business
values into the public sector deal with the increased risk of
corruption (e.g. Frederickson 1997). But corruption is not
new. Bovens argued that the figures do not indicate an
increase in corruption. And, like crime, corruption is age-
old. Gardiner (1970) described long before the rise of NPM
how corruption took over an American city, partly because
of malfunction of the bureaucratic system. A weak,

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 PAQ WINTER 2007 425

fragmented political system wit

form of government, limited state
(for example: no civil service p
inadequate bidding regulations),
laws violated by organized crime
the situation in this American c
with NPM or Reinventing Govern
Another consideration is that even if values of
public service have been changed towards businesslike
values, there is no hard evidence that this automatically
leads to more integrity violations (Lawton 1999: 69). One
could at most argue that the introduction of businesslike
values and/or techniques asks for guidelines for civil
servants and public managers to enable them to take ethical
decisions (Cohen and Eimicke 2002: 233-235), and for
close cooperation with stakeholders and establishing
mechanisms for evolving trust as a function of
accountability (Behn 2001: 217). A deficit in these kinds of
guidelines and the understanding and use of them,
combined with temptations caused by NPM-like
opportunities, seem to be the main risks one should look for
when researching the relationship between public integrity
and NPM.
In sum, we see that the fear for a decline in public
administration ethics is mostly related to entrepreneurial
government and the introduction of the market model in the
public service. With respect to the introduction of
performance measurement and the decentralization of
budgets and authority there is more discussion among
authors. The core question here seems to be if these
manifestations of NPM are managed in an ethical and
responsible way. The way in which this is done will have
its influence on ethics and integrity, for better or for worse.
The introduction of a planning and control cycle with an
emphasis on the proper use of gathered information and
feedback of this information gets the support of most

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 426 PAQ WINTER 2007

critics. This can be a way of m

measurement and decentralization
Based on the knowledge presented in this
contribution we expect to find the following relations
between the manifestations of businesslike approach and
public ethics in an empirical setting:
1 . A positive correlation (negative effect)
between Downsizing/Entrepreneurship and Public
Integrity;
2. A negative correlation (positive effect)
between the proper use of a Planning and Control Cycle
and Public Integrity.
3 . A varying correlation (positive or negative
effect depending on other factors) between:
a. Decentralization and Public Integrity;
b. Performance Management and Public
Integrity.

The following relations are expected:

Fig. 3. The hypotheses of the relation between

manifestations of the businesslike approach and public
integrity.

Downsizing and
Entrepreneurship

, - (Negative influence)

Decentralization ^^7. ■ .
Public Integrity

■ i

Performance ± (varying ''' violations)

Management j influence) ' ' '

Planning and
Control Cycle

.. .. ' + (Positive influence)

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 PAQ WINTER 2007 427

In an empirical setting th
"public integrity" could includ
violations as described befor
theNPM aspects will have diff
types of integrity violations.
The fourth hypothesis is that
implemented will greatly infl
integrity. When the introductio
communicated, understood and
on how to deal with them in an
is that this can make the differ
a negative effect on integrity with concern to
decentralization and performance measurement. The
hypothesis is that it will slightly adjust the strength of the
effect of the other two NPM aspects, without changing their
nature (from positive into negative or reverse).

This looks as follows:

Fig. 4. The hypotheses of the relation between

manifestations of the Businesslike approach and Public
Ethics with 'implementation ' as an intermediary variable.

Our final remark (which is in foil agreement with

Cohen and Eimicke (1999)) is that we conclude that the

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 428 PAQ WINTER 2007

effect of introducing businesslik

sector depends more on the est
principles to ensure that these me
effective and ethical manner, tha
businesslike methods as such.

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NOTES

1 This contribution is based on a paper that we presented at the annual

conferences of ASPA and EGPA in 2003 and 2004. We thank all the
participants in the discussions during these conferences as well as the
two anonymous reviewers for their constructive and valuable
comments.

One can argue about the "birthday" of New Public Management.

Pollitt and Bouckaert refer to public management as a term not much
used before the 1970s and most of the literature on (new) public
management is dated after 1980 (Pollitt and Bouckaert 2000, Hood
1991). Since NPM overlaps the eras of New Public Administration
(1971-1987), Reconstruction (1987-1992), and Reinvention (1992-
present), as distinguished by Cohen and Eimicke (1998), it seems
safe to date the establishment of NPM in to the late 1980s.
3 This idea of separation was already one of the characteristics of
Weber's Bureaucracy (Elwell 1996).
4 The French economist J.B. Say coined around the year 1800: "The
entrepreneur shifts economic resources out of an area of lower and
into an area of higher productivity and greater yield." (Quoted in
Drucker, 1985: 21).

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 438 PAQ WINTER 2007

5 In a publication called Making Gove

Employees Department of the AFL-CIO
service delivery systems to create one-s
systems, case management, and the like
New York State's merger of Job S
Insurance offices into Community Se
unemployed can sign up for unemplo
stamps and receive information about ed
and jobs - even during the evening. T
people, not funding streams." (Osborne
6 See also Weikart (2001).
7 Huberts' classification has subsequently
occurrence of integrity breaches in
Heuvel, Huberts and Verberk, 1999) and
integrity policies in local government (
2003).
Bovens based this conclusion on criminal statistics on convictions for
corruption (Hoetjes, 1991). This might be the reason why he did not
include the scandal on police investigation techniques that caused a
parliamentary inquiry into practices by the Dutch police that could be
called "noble cause corruption." (Enquetecommissie
opsporingsmethoden, 1996). For an elaboration on the topic of
"noble cause corruption" see Punch (1994: 38).
9 Ironically, since the publication of Bovens' paper in 1996 two major
scandals, which did result in criminal charges, got a lot of attention in
the Netherlands. The first was the South Holland banking scandal
(described by Yesilkagit and de Vries, 2001), which had striking
similarities to the Orange County bankruptcy case (Cohen and
Eimicke, 1999). The second was a big fraud and corruption case in
which building and construction firms with the aid of civil servants
overcharged the Dutch government millions of Euros. A
parliamentary enquiry was held in 2003 and the public prosecutor's
office is preparing criminal charges against private contractors as
well as civil servants.
10 One could argue that at least some of the examples described are
breaches of integrity, prohibited by governmental codes of conduct
or other internal regulations. However, most codes of conduct in the
Netherlands were introduced after 1996.
11 We would like to add that this statement is only valid in a specific
cultural context. In many countries police sergeants are not the most
trusted persons one can imagine.

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 PAQ WINTER 2007 439

12 Indeed, in recent years we observe a sig

and social importance of codes of condu
programs (see, e.g., Kaptein, 2003).
13 On July 17, 2003, the NRC newspaper
will withdraw the bill on market and go
because of the many criticisms and a
suggested. The cabinet fears that the
wants instead to extend the legislation
consequently more power for the Dut
Since then no activity with respect to th
14 For a description of the Orange Count
went bankrupt as a result of using a high
well as a comment on Frederickson's
Eimicke (1999).
15 Cohen and Eimicke even introduce "entrepreneurship as a
professional value" if certain marginal values are fulfilled. (Cohen
and Eimicke 2002: 274-276).
16 Behn elaborates that some aspects of performance may concern
process more than real performance: Was the public service provided
promptly? Was the service provided courteously? These could be
issues of fairness: Did some people get services that were more
prompt or more courteous than others? (Behn, 2001 : 227).
17 See also Anechiarico and Jacobs, who argue that to an increasing
extent, the laws and energy of federal, state, and local governments
focus on the surveillance and control of officials rather than doing
the business of government. (1996: XI and 176).

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