New Public Management Practices and Financial Performance of Local Governments in Cameroon

Abstract

During the previous two decades of this millennium there has been a succession of reforms from New Public Management (NPM) to New Public Governance (NPG) in public organisations in line with the strategic development visions of governments the world over. Central to this is the adoption of private style management techniques to enhance efficient performance in public sector development endeavours. Consequently, a handful of private management practices such as accrual accounting, professionalism, outsourcing, and the use of ICT were introduced in the Local Government of Cameroon. This study sets out to assess the relationship between these NPM practices enshrined in the governance processes of councils and financial performance in Local Governments of Cameroon. The study employs a mix of survey-based research with a triangulated method of data collection. Questionnaires and documentary research are used to collect both financial and non-financial data. From a population of 374 councils in Cameroon, 50 councils and their financial statements as well as books of original account entries are sampled and grouped according to statutory council categories. Both descriptive and inferential techniques are used to know the levels of NPM practices and their effect on financial performance. The results show that professionalism and outsourcing have a positive performance outcome, while accrual accounting and the use of ICT are negative. However the combination of all NPM practices in general is positive. For an efficient performance in the public sector there is need to gradually sequence the integration of NPM practices in the governance and management processes, based on the budget size of public sector entities. There is no one-size fits all policy for the wellbeing of public sector entities.