New public management is a management

Management

Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...

 philosophy used by government

Government

Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...

s since the 1980s to modernise the public sector

Public sector

The public sector, sometimes referred to as the state sector, is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.Examples of public sector activity range...

. New public management is a broad and very complex term used to describe the wave of public sector reforms throughout the world since the 1980s. The main hypothesis in the NPM-reform wave is that more market orientation in the public sector will lead to greater cost-efficiency for governments, without having negative side effects on other objectives and considerations.
Jonathan Boston (1996), one of the early writers of NPM, identified several ways in which public organisations differ from the private sector:

• degree of market exposure—reliance on appropriations
• legal, formal constraints—courts, legislature, hierarchy
• subject to political influences
• coerciveness—many state activities unavoidable, monopolistic
• breadth of impact
• subject to public scrutiny
• complexity of objectives, evaluation and decision criteria
• authority relations and the role of managers
• organisational performance
• incentives and incentive structures
• personal characteristics of employees

Boston also identifies that reform tends to ignore these differences.
Some modern authors define NPM as a combination of splitting large bureaucracies into smaller, more fragmented ones, competition between different public agencies, and between public agencies and private firms and incentivization on more economic lines.