Date: 21 Jun 2014 (Latest version)

The Effect of New Public Management Reforms on Climate Change Adaptive Capacity: A Comparison of Urban Planning and the Electricity Sector

Abstract

From the mid-1980s and onwards, a number of public institutions in Western democracies were subject to New Public Management (NPM) reforms, applying management tools from the private sector, oriented towards outcomes and efficiency. The chapter identifies organizational factors that influence adaptive capacity to climate change and finds that the NPM reforms have changed the sectors, significantly reducing adaptive capacity to climate change. In urban planning project planning has been moved to private actors, undermining formal responsibility for adaptation. In addition, an increased focus on efficiency and short-term market orientation has reduced adaptive capacity. For the electricity sector, the revolutionary change with the reform in 1991 led to an abrupt undermining of adaptive capacity. The radical change in incentive structures, from encouraging security of supply to an extreme focus on economic efficiency, downplayed robustness and adaptation. The change in formal structure is followed by a corresponding professional demographic change which further undermines adaptive capacity. Whereas both sectors were previously dominated by engineers focusing on robustness of constructions and maintenance, many economists focusing on cost reduction and economic efficiency were employed as a result of NPM reforms.

The chapter shows that adaptive capacity to climate change is influenced by a wide set of organizational factors beyond the traditional discussions, which have important practical implications for public administration.