The New Public Management reform of state-funded social service nonprofit organizations and the changing politics of welfare in Hong Kong

Abstract

What are the political impact and significance of New Public Management (NPM) reform on social service nonprofit organizations (NPOs) in Hong Kong? Social service NPOs have a long history as a significant part of Hong Kong’s ‘welfare mix’, not only in their role as state agents in the provision of service, but also because of their political and societal roles in affecting social policy making during the colonial era. The exercise of such agencies under an authoritarian setting was made possible through a governance regime historically formed under the peculiar situation of the old politics of welfare. The NPM reform and the associated governance regime change is a significant part of the new politics of welfare that has arisen with the dissolution of the old social pact. It facilitates the transition of the governance regime from strategic partnership to executive dominance, which maximizes the flexibility of the state in containing social spending and maneuvering the new distributive politics arising from the increasing societal demand for social care. Points for practitioners The NPM reform of social service NPOs is closely tied to the change in the welfare system and has significant impact on the environment within which these NPOs operate. The impact and significance of reform is also affected by the characteristics of the political system and the preexisting relationship between the state and the nonprofit sector. Social service NPOs assume multiple roles as state agents, political agents, and societal agents. In Hong Kong, NPM reform unfavorably affects the space for NPOs to exercise their societal agency. The fierce competition for resources also stifles the development of newer organizations.