New public management’s demand that all public institutions must embrace efficiency by accepting and practicing business methods led to different reactions. There are people who argued that democracy, equity, and citizens’ participation were values that should also be considered in achieving efficiency. This article regards efficiency as an economic rather than business perspective. It is an important contribution to this scholarly discussion.
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In public administration, controversy surrounding efficiency resulted in different ways in which people defined efficiency. Human rationality is bounded, and optimization of human behavior satisfaction can be used to measure efficiency in an economic perspective. Efficiency can be referred to the ratio of input to output in an administration problem solution. Managers use the cheapest means to achieve the best solution. It is primary method used to measure the efficiency in public administration. The author of this article states that numerous values, which should be considered in measuring and defining efficiency, correspond to the economic definition of efficiency (Christopher, 2009).
Efficiency and economics are both concerned with finding a solution to the problem without considering the means used. The administration should be able to achieve its goal without influence from external forces. In the American history, the public administrators could reject efficiency as a tool to public action until when the U.S Federal government called for greater efficiency. The objective was to maximize the number of returns per unit time in public administration. It would consequently reduce cost of public services. In a business perspective, efficiency is defined by achieving maximum profits. It could not be used to measure efficiency in public institutions because the public sector has many objectives and use multiple values. It means that it was not possible to pursue a single goal.
Public administrators should be entrepreneurial and give the customer satisfaction. Pareto efficiency does not specify goals and their values. Economic notion in Pareto efficiency is wider than the technical efficiency, and it gives a neutral value. It shows that it is not possible to achieve one goal without interfering with another. The public administrators often embrace Pareto efficiency; therefore, scholars have made a contribution to it in a cursory manner. Some have criticized it as a measure of efficiency in the public sector quoting that it can be used only in transaction of goods and services (Christopher, 2009).
However, application of Pareto approach in efficiency evaluation is all round and promotes positive transformation in the public administration. It combines the performance measurement and indicators to weigh the public values. It simplified policy making process in the public organization, and the public administrators are flexible in their decision making. This approach mitigated the decision making mechanisms that were inflexible to changes in public value.
A clear definition of the role of public administrators can be drawn in this approach. If a public administrator purses legitimate public values, then he/she is efficient. If he/she fails to achieve the legitimate values, he/she is inefficient. It discouraged the public administrators from making hasty decisions without preparing for any challenge likely to occur. It allows discussion and thorough exploration of all possible alternatives resulting in better decisions in the public sector. Public administrators should be consistent in achieving efficiency. Their decisions may not be optimal but must satisfy the prevailing human needs. They should be able to account for their decisions (Christopher, 2009). Unlike the a business perspective, where efficiency is achieved by maximizing profits using the optimal solutions, this article defines efficiency from an economic perspective. Pareto approach uses satisfaction of public values to measure efficiency.