Rightsizing and the new public management : planning, arranging, and spending for service delivery in Charlotte, North Carolina

Abstract

Among other strategies, the New Public Management seeks to introduce private-sector practices into government management. These include focusing on contractual relationships between elected officials as service providers and government agencies and private sector firms as service producer and utilizing such techniques as outcome-oriented planning and competition for service delivery. The City of Charlotte, North Carolina introduced these practices beginning in 1992 in a process it called Rightsizing with the stated purpose of reducing service delivery costs associated with non-public safety functions. This dissertation is a case study of Charlotte’s efforts. Specifically, I utilize Transaction Cost Economics to understand planning, service delivery, and expenditures under Rightsizing. Planning in Charlotte evolved through two phases. First, Charlotte largely focused on the mechanics of service delivery through strategic planning processes directed towards efficient service production. The second phase-Balanced Scorecards-focused Charlotte’s planning efforts squarely on service delivery outcomes. Charlotte attempted to introduce market forces into service delivery through competition by identifying nearly 380 services that would be opened for competition. However, between 1992 and 1999, fewer than 150 services were actually competed for, and most of those were not identified originally as candidates for competition. Charlotte did reduce expenditures for non-public safety functions successfully which were then applied to police and fire services. The lack of a relationship between the actual exposure of services to competition combined with Charlotte’s success in reducing service delivery expenditures for non-public safety services provides some support for the notion that outcome-oriented planning for service delivery can be a successful route to reducing service delivery expenditures. It is possible that efforts to more closely align service delivery through outcome-based planning, training employees, developing reward-based compensation schemes, and instilling values of public service may be as equally adept at reducing service delivery expenditures as opening services to market forces such as competition and contracting.