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Impact of New Institutional Economics on New Public Management Cover

Impact of New Institutional Economics on New Public Management

Open Access
|Apr 2026

Figures & Tables

System Performance and Measurable Results (Source: Author’s elaboration based on Hood, 1991, Groot and Budding, 2008, and De Vries and Nemec, 2013)

StudyCountryOutcome MeasurePre-ReformPost-Reform
Barnett, et al., 2009New ZealandStructure accountability, and governanceNot mentionedHierarchical governance, statutory organizations, and modified accountability
Mays, et al., 2000The United KingdomEfficiency, excellence, fairness, and accountabilityNot mentionedNot much discernible change
Carryer, et al., 2010New Zealand20 negative patient outcomesLow rates (1989–1993)Fast reform (1993–2000), slow down (2000–2006)
Pollitt and Bouckaert, 2004Multiple (Europe, North America, Australasia)Analyses with multi-dimensionsNot mentionedNot mentioned
Fougere, 2001New ZealandOrganizational forms, unexpected outcomes, structure and continuity
Ashton, et al., 2005New ZealandStructure and continuityNot mentionedNew forms appearing and unexpected consequences
Mulgan, 2008New ZealandEfficiency, responsibility, and financial administrationNot mentionedMaintaining essential elements, structural cycling, increased productivity, but little increase in accountability
Hoare, et al., 2012The United Kingdom, New Zealand, AustraliaDevelopment of careThe United Kingdom advanced, New Zealand/AustraliaThe United Kingdom: clinical leadership; New Zealand/Australia: minimal alteration
Duncan and Chapman, 2010New ZealandNPM, coherence, and structural changeMarket-driven New Public Management (1986–1996)Modifications made gradually and pragmatically (1999-2008)
Cangiano, 1996New ZealandFinancial Management corporate governanceNot mentionedAccrual accounting and performance based

Characteristics of Included Studies (Source: Compiled by the authors based on Williamson, 2000; North, 2005, Ostrom, 2010; Pollitt and Bouckaert, 2011)

StudyCountry/RegionReform PeriodStudy DesignPrimary FocusFull text retrieved
Barnett, et al., 2009New Zealand2001–2004Mixed (surveys, interviews)Introduction of new forms of the health systemNo
Mays, et al., 2000The United Kingdom1991/92 to late 1990sComprehensiveQuasi-market reforms on NHSNo
Carryer, et al., 2010New Zealand1989–2006QuantitativeEffects of health policy changes on nursing and patient outcomesNo
Pollitt and Bouckaert, 2004Multiple (Europe, North America, Australasia)Not mentionedComparativePathways of public management reformNo
Fougere, 2001New ZealandNot mentionedConceptualHealth sector restructuring, institutional ambiguityNo
Ashton, et al., 2005New Zealand1990s, 1993, and 2001ConceptualHealth system reformNo
Mulgan, 2008New Zealand1980s to 2000sAnalyticalReform and accountability, NPMYes
Hoare, et al., 2012The United Kingdom, New Zealand, Australia1998–2009Realistic reviewGovernment policy and health careNo
Duncan and Chapman, 2010New Zealand1986–2008AnalyticalEvolution and revision of NPM modelNo
Cangiano, 1996New ZealandMid-1980sDescriptiveReforming on the public sector and managing financesNo

Important Distinctions between Old and New Institutional Economics (Source: Petrovic and Stefanovic, 2009; Spithoven, 2019; Turgut, et al_, 2021, p_408)

Economic schoolOld institutional economicsNew institutional economics
MethodMacro, inductionMicro, deductive
Review objectHolisticIndividual
FocusOrganizations that offer different products and servicesIncomplete agreements based on individuals
Function of stateInterventionist state and its commitment to social changeMinimal government focused on efficiency
Accepting economic legacyRejection of neoclassical economic theoryBased on neoclassical economic principles

Use of NIE to Inform NPM (Source: Verhaegen and Huylenbroeck, 1999; Özer, 2021, p_218)

TheoriesDomainsContribution to new public managementStrategy
Public choice theoryPolitical, economic, bureaucratic, socialReducing size of government, ensuring accountability, and implementing controls through constitutional provisions, while streamlining legal and bureaucratic processes to address social requirementsManagerial strategy:Administrative clarity and professional accountability
Transaction cost theoryBureaucratic and economic developmentDeregulation seeks to grant public managers increased autonomy and options – while simultaneously lowering bureaucratic expenses and improving savings within the public sectorMarket and progressive change strategy:Addressing challenges of enhancing service delivery quality, stability, and affordability
Property rights and agency theoryPolitical, bureaucratic, economic3Es – Economy, efficiency, and effectiveness – underscore the importance of distinguishing policy development from service delivery. Furthermore, public sector compensation systems should be grounded in performance.Program strategy:Allocating resources by objectives and goals
DOI: https://doi.org/10.2478/fman-2025-0028 | Journal eISSN: 2300-5661 | Journal ISSN: 2080-7279
Language: English
Page range: 421 - 440
Published on: Apr 3, 2026
In partnership with: Paradigm Publishing Services
Publication frequency: 1 issue per year

© 2026 Demokaan DEMİREL, published by Warsaw University of Technology
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.