New Public Management (NPM) was the catch phrase of the reforms in the public research and higher education sector for the last decades. The postulated effect of the NPM reforms is increased efficiency in governmental resource spending on the public higher education and research institutions. Though backed by theoretical considerations, this hypothesis has hardly been tested empirically. Using a unique dataset of German research units, this paper deals with the influence that NPM mechanisms have on research performance. Controlling for different university mission, it can be shown that both greater internal hierarchy (especially “strong presidents”) as well as greater operative flexibility for the researchers themselves increase research performance. Some of the variables, including the presence of research councils, have a positive effect on research efficiency under some definitions of research output. On the other hand, the introduction of resource accounting systems has a negative impact. All in all, we conclude that the public science sector reforms implemented in most of the Western economies were heading into the right direction by providing greater performance incentives and increasing allocative efficiency in resource spending. Also we provide some ideas of how NPM may be combined in order to construct a sensible governance system. We conclude that the mechanisms should be selected based on the mission of the university.
In many western countries, profound changes have taken place in the organisation of the public science systems (e.g. de Boer et al., 2007, Meyer, 2007, Frolich, 2005 and Smith, 2004). Although the countries started from very different positions, the governance schemes converge towards a pattern that is often described as New Public Management (NPM) (Leisyte and Kizniene, 2006). In contrast to the organisational systems which were common in many continental European countries such as Germany, France, and Austria, the spirit of NPM consists of two pillars (Braun and Merrien, 1999, Schimank, 2007a and Schimank, 2007b). First, the decision-making competencies of the state authorities are reduced, especially at the purely operative level, leaving much greater steering autonomy to the researchers. Second, the internal hierarchy is strengthened, that is to say, the management authorities (the deans and the university presidents) gain much greater power over the researchers. Many different mechanisms were developed to deploy the new governance structures in practice. Among these are resource controlling, global budgeting, goal agreements, performance-oriented budgeting by indicators, or performance-oriented payment schemes. In any case, though NPM is en vogue among European policy-makers, to our knowledge, there is little empirical proof that the new governance system indeed results in efficiency gains. Indeed, its benefits are sometimes implicitly doubted, because it is argued that research is not a routine task and the most empowering setting is that of academic freedom. Anyhow, the latter claim has not been proven either. A lot of researchers also claim that the concept of efficiency does not even apply to the science sector, where, however, rarely it is made explicit, what efficiency means. To place it right here, econometric efficiency analysis has developed a clearly defined concept of efficiency, which is also explained in Section 3.2. One implication of this concept is that a unit which is more efficient than another is able to gain higher outputs from a given level of input. Particularly this implication makes the concept of efficiency so appealing for politics, because it allows increasing societal gains from the science sector by increasing efficiency, without having to increase inputs. NPM certainly is the most discussed – though disputed – concept to increase efficiency.
Using a unique dataset of a large sample of German research units gathered during a project on “international competitiveness and innovation capacity of universities and research institutions—new forms of governance” funded by the German Research Association (Deutsche Forschungsgemeinschaft, DFG), we will present concise results which point to positive effects of the typical NPM mechanisms on research performance.
It was demonstrated that many NPM instruments have a positive influence on research efficiency. In any case, this depends on the definition of what research activities actually comprise. Evaluations are a reasonable mechanism to enhance publishing activities. Goal agreements and the existence of research councils push the research units in the direction of increased transfer and teaching efficiency. High competencies of the chancellors and presidents as well as the non-existence of strict personnel quotas contribute positively almost everywhere. We conclude that NPM may exert considerable positive effects on university research if not employed blindly. We have also provided hints on how a university may choose its particular governance model with respect to its mission. Summarising, the NPM reforms have proved useful in guaranteeing a more effective spending of governmental resources.
