Governance as the New Public Management 233
process, and to illuminate how their behavior and interrelationships shape public
service provision. NPM is considerably less interested in process. It is more con-
cerned with the how much rather than the how of policy. Its explanatory targets
are effi ciency and customer satisfaction—that is, it seeks to illuminate how public
goods that are prized by the citizens who consume them can be produced with
minimal input.
Th ird, according to Peters and Pierre (1998), governance and NPM occupy
diff erent philosophical ground. NPM is essentially an organization theory. Build-
ing on the institutional literature, especially that anchored in public choice the-
ory, its explanatory orientation and its prescriptive conclusions are focused on
organizational structure. Th ose, such as Osborne and Gaebler (1992), who have
shaped and popularized NPM owe much to such scholars as James Buchanan and
Gordon Tullock (1962), William Niskanen (1971), and Vincent Ostrom (1973).
In public choice, NPM advocates fi nd a highly developed set of intellectual tools
that off er a comprehensive alternative to organizing public service provision us-
ing the orthodox Weberian model. Th ey have borrowed from this toolkit freely,
and in doing so, they have constructed a model that is focused on organizational
and institutional reform. In contrast, governance is less concerned with institu-
tions than with understanding the relationship between government and society.
Clearly, there is an institutional component to any such understanding, but gov-
ernance is considerably less hostile to the Weberian model and is perfectly willing
to prescriptively incorporate it when and where it is deemed appropriate. Gover-
nance is essentially a theory of politics, or at least a political theory in the making.
It targets the “authoritative allocation of values” (David Easton’s famous defi ni-
tion of politics) as its ultimate objective, seeking to explain why government does
what it does and to discover how it can do that better. Equating governance with
NPM risks perceiving the former as a wholesale rejection of the public sector.
Indeed, empirical evidence regarding the utility of complete privatization
under NPM is lacking. Suzanne Leland and Olga Smirnova (2009) reexamine
the work of James L. Perry and Timlynn Babitsky (1986) on the privatization of
transit services. Contrary to the original fi ndings, Leland and Smirnova demon-
strate that, in terms of effi ciency, there is no diff erence between privately and
government-owned transit services. Th is presents a distinct challenge to the NPM
framework, which rejects the structure of and need for government institutions.
In fact, for privatization to be successful in terms of improving effi ciency over
the public sector, the empirical record suggests there must be identifi able means
for measuring performance and evaluating outcomes, substantial competition
between private providers, and the task must be specifi c enough to allow direct
implementation (Leland and Smirnova 2009), which is unlikely for many large-
scale public goods. In fact, privatization tends to be the most eff ective when “the
task is not central to the agency’s mission” (856).
Fourth, as a theory that encompasses government and society, governance
recognizes the unique cultural and political role of public goods and the public