10. Market Oriented Government: Leveraging Change Through the Market

Osborne and Gaebler view cities as markets "vast, complex aggregations of people and institutions, each constantly making decisions and each adjusting to the other's behavior based on the incentives and information available to them" (p. 282). According the authors, the most effective way for government to meet the public needs of this local 'marketplace' is not through central control, but by steering the decisions and activities of its players through restructuring the marketplace. Government can use policy to leverage the decisions and behavior of individuals, instead of attempting to directly control them through administrative programs.

Osborne and Gaebler believe government does not have the resources to fulfill all of the public's needs. However, by intervention in the market, government can create incentives for the public to find alternative ways to meet these needs. The authors believe the market can play the same role for social and economic activity as computers do for information, using prices as a signaling mechanism to "[process] millions of inputs efficiently and [allow] millions of people to make decisions for themselves."

Osborne and Gaebler identify eight problems associated with the programs that government employs to meet society's needs:

• Programs are driven by constituencies, not customers

• Programs are driven by politics, not policy

• Programs create turf, which public agencies defend at all costs

• Programs tend to create fragmented service delivery systems

• Programs are not self-correcting

• Programs that are obsolete rarely die

• Programs rarely achieve the scale necessary to make a significant impact

• Programs normally use commands, not incentives

In order to utilize a market mechanism in substitute of an administrative program in providing goods and services to the public, the good or service to be provided must possess several characteristics: there should be an adequate supply of the good/service and many providers; customers must have adequate purchasing power and a desire to exercise that power; sellers must be easily accessible to buyers, while buyers must have sufficient information about price, quality and risks; and finally, the government should establish rules of the marketplace and adequately police the participants in the market to enforce those rules.

The authors give many examples of ways in which government can restructure the market place many of these have been practiced for some time. Through such activities as setting rules in the market place, facilitating the provision of information, augmenting demand, catalyzing private sector suppliers and new market sectors, creating market institutions, risk sharing, and regulation through the application of market-oriented incentives, government can reinvent itself to implement any agenda - an agenda that should be determined not only by government, but also by the community.

These principles and characteristics lead to the conclusion that reforms in NPM were dominated by two trends: economic - marketization and organizational - less bureaucratic. The content of marketing is putting into practice of public vehicle market mechanisms in the broadest sense. Usually mandatory element of marketing calls privatization. The essence of the latter, when discussed the reform of public administration is not for sale state, and to reduce the volume and composition government functions, including functions of operational management, reducing burden on public budgets at all levels. Privatization here – manner "Reduction" composition and volume functions under pressure for lack of resources ensure their implementation. The second widely used market mechanism - contracting. Those functions of production and provision of public goods, that through privatization transferred to the private sector in the implementation, but are important to society, the state continues careful control to ensure their implementation in volume and quality. Then state may leave them on budget financing conditions contract execution. In this case, by careful preparation contract conditions, control target budget spending contractors, variety, quantity and quality of production public services under the contract.

Marketization assumes the differentiation in the structure determination of governance functions policy and regulation, supervision and production services. A common means this part is going beyond the administrative hierarchy of state organizations directly engaged in production and service provision the population.

Is less bureaucratic organizational support economic imperatives that guide the efficiency of the public sector as a whole. Primary de-bureaucratization content includes the following elements:

- Change the principles of organizational structure of public governance (decentralization and deconcentration rather than centralization and concentration, the dominance of the functional principle against the industry, integration instead of specialization and differentiation, etc.);

- Changes in the composition and content of the functions of government, their structure; appearance of additional features forecasting, strategic analysis, assessment and planning, marketing resources, products, customers, management human resources administration, financial management, etc.; strengthening and organizational separation of functions analysis, evaluation and coordination, concentrating them at higher levels of government;

- Change manning units (teams, committees and working groups) based on meaningful qualification, not formal criteria;

- Change planning, reporting and control;

- Change in the system of evaluation, promotion and monitoring of personnel;

- Change the reward system, depending on its setting of rezultativ work;

- Establishing dominance eligibility criteria and promotion recruitment;

- Increasing the mobility of staff;

- Cancellation instructions and regulations that make it difficult to achieve the objectives and intermediate indicators of efficiency;

- Review and cancellation of activities and operations, not oriented end result;

- A total focus on productivity and quality of work and services;

- Reduction of administrative staff [11].

Thus, Osborne and Gaebler suggest that the ten principles of government, as outlined in the ten chapters of the book, can serve as a checklist to unleash new ways of thinking and acting for any public organization. To test the list as an analytical tool, they take three of the most challenging public problems faced by American society and apply their principles of entrepreneurial government.

Health Care is the first problem tackled. The authors cite many problems with the industry, and conclude that government has abdicated its steering role in health care and has allowed the private sector to dictate policy. The government has reduced itself to a reactionary role in the health care sector. In adopting a more market-oriented strategy, government should set the rules and limits, but leave practicing to the private sector. Government should ensure that all citizens have health insurance, and help provide healthcare to the poor and elderly. It should work to encourage competition, and at the same time make sure citizens have sufficient information about providers in order to make well-informed choices. Government to provide incentives in order to make healthcare preventive instead of reactive. And finally, the government should push for less hierarchy, advocating for a shift of duties that are inefficiently reserved for highly trained doctors to nurses and physicians assistants.

Education is the second challenging public issue to which the authors apply their principles of entrepreneurial government. They see the educational system as a perfect example of a monopoly and believe much can be done to improve it. Schools have failed to implement progressive change in their methods, and as a result, the system has been on the road to failure over the years and is largely out of synch with the changing family structure [12].

In our opinion, of course, these principles, after their implementing, improve the effectiveness and efficiency of public administration, but here we can face to a big trouble. We should not mix the aims and nature of private and public sectors during the implementing NPM. The main subject of private sector is the owner, the enterprise itself. Another situation is with government. Here, the citizens, public give the power to the state. So, in accordance with this, we can not attitude to them as to customers. There are different priorities in these two cases. In the first case, owners of private organization use the principles in order to get benefits and profit. In the second case, government should follow principals in order to address people’s needs, to ensure their life, to serve them, in general.

So, this differs two sectors from each other and it is the main reason of implementing and getting results difficulties in public administration.

It tells us that we can use the “reinventing” principles in government, but not all together. Every country has its own features and background of relations with its citizens, which should be taken into account during the reforming public administration.