New Public Management in Pakistan

By Ibne Saif
ibnesaif@gmail.com

New Public Management (NPM) is not a recent development; it has long been used to manage
government initiatives meant to improve the performance of the public sector. According to
2023 research of Pakistan Institute of Development Economics (PIDE), more than 85% of
Pakistan’s public sector organizations continue to use archaic bureaucratic procedures, which
significantly impairs their capacity to provide current service delivery standards. Although there
are still many obstacles to overcome, political leadership today seeks to enhance public sector
performance at the local level.
It is pertinent to review significant changes in order to gain a better picture of the current state of
affairs. In an effort to stabilize the economy during a crisis, the Asian Development Bank (ADB)
implemented a number of changes in Pakistan in 1998. These reforms were intended to boost
economic growth, lower poverty, and create a feedback system consistent with macroeconomic
stability.
However, many of the claims of improvement have shown out to be overstated or unsupported
since the start of these NPM-inspired initiatives. For instance, the 2023 Global Competitiveness
Index places Pakistan’s public sector efficiency 131 st out of 139 nations worldwide. The nation
has become more dependent on loans from foreign financial institutions rather than boosting its
economy and lowering poverty. The persistent difficulties are highlighted by the June 2023
rescue agreement with the International Monetary Fund (IMF), in which Pakistan obtained an
additional $3 billion in loans to support its economy.
This situation raises critical questions: Why are public sector organizations in Pakistan failing to
deliver as expected? Why do reforms fall short or remain imperceptible? And why aren’t citizens
treated as customers in the public sector, as proposed by the NPM model? These questions
remain unanswered while inefficiencies persist. It, therefore, becomes the right time to have a
critical appraisal of the public sector by adopting modern practices that center on quality
provision of service and increased organizational performance. In this context, the 2022 World
Bank report on Pakistan’s governance reform has claimed that there is a need for practically
upscaling transparency and efficiency in the public sector through digital transformation.

Digital governance, already successfully implemented in countries like Estonia and Singapore,
could serve as a model for Pakistan. However, as the majority of Pakistan’s population—around
64%, according to the Pakistan Telecommunication Authority (PTA) in 2023—still lacks access
to reliable internet services, the path to digitization remains challenging.
Currently, Pakistan faces intense pressure from international donors, financial regulatory bodies,
and aid agencies to privatize state-owned entities that provide public services, thus letting the
“invisible hand” of the market govern the economy. However, there are significant challenges to
this approach. Pakistan has had a large public sector for decades, and a majority of its population
depends on state-provided goods and services. The most vulnerable citizens, particularly those in
marginalized rural communities, have no real alternative to public services. According to a 2022
World Bank study, around 24% of Pakistan’s population lives below the national poverty line,
means that many cannot afford private-sector alternatives. Therefore, fully privatizing public
services is neither a simple nor an appropriate solution. Adaptation of the NPM model, however,
remains necessary, but it must be carefully tailored to Pakistan’s unique social and economic
context. Real and effective results can only be achieved through a paradigm shift in the public
sector, implemented with genuine commitment, energy, and in the true spirit of reform.
Now, policymakers have the chance to collaborate closely with researchers, practitioners, and
international partners to improve and optimise NPM methods, fixing any issues that may have
arisen and guaranteeing more significant outcomes. A revitalised respect for Pakistani citizens,
who should no longer be viewed as merely state subjects but rather as valued customers in need
of effective, open, and superior public services, must be at the core of these reforms. Without this
change, the NPM’s promises will not be fulfilled, and Pakistan’s public sector will continue to be
mired in a cycle of inefficiency and reliance on external support.