Policymakers are often faced with a tricky challenge: How do you improve the performance of public organizations without compromising their social objectives? With the advent of New Public Management (NPM), governments in many countries have resorted to instruments originally incubated in the private sector, to resolve performance issues in the public sector. However, public management literature suggests that there are inherent differences between public and private organizations. Such differences make the indiscriminate adoption of private sector instruments potentially problematic and might render some of them ineffective or even counterproductive for use in public organizations unless due caution is exercised and the right design choices are made.
In my presentation, I propose a conceptual framework to situate different performance strategies used in public organizations. Using this framework, I highlight the challenges of instrument mismatch through an appraisal of recent public hospital reforms in India and examine their potential effects on healthcare provision, based on what we know from existing literature. I draw attention to some of the opportunities, impediments, and ramifications of these reforms, and hypothesize which instruments are likely to be more successful, and what further reforms might be needed to ensure that the performance of public hospitals is both effective and consistent with their goals and values as public organizations.