We are All Customers Now: Understanding the Influence of Economic Theory on Public Administration

Abstract

Market-based administrative reform has led to a sustained argument among in the public administration field. Some applaud this development on the grounds that it makes public service cheaper and more customer-oriented. Others argue that the public sector is not just another service-producing system delivering "public value" but rather that it stands for legality, due process, legal security as well as being a service provider. The article compares the impact of market-based reform in Rechtsstaat administrative systems and the Anglo-American “public interest systems. It also compares traditional public administration with an NPM-model at different stages of the policy process. The article reviews the potential democratic downsides to market solutions in the public administration by highlighting the core elements of "publicness" and the extent to which private sector organizations can deliver "public value".