A Replication of “Did New Public Management Matter? An Empirical Analysis of the Outsourcing and Decentralization Effects on Public Sector Size”

ABSTRACT This manuscript replicates and extends the work of Alonso et al. focusing on the effects of New Public Management practices—outsourcing and decentralization—on public sector size in terms of government expenditure and employment. The narrow replication confirms the original findings: outsourcing increases government expenditure, whereas decentralization reduces it, with neither practice affecting employment. The wide replications add nuances: while the long‐term results align with the original study, recent data indicate that outsourcing may have narrowed its cost gap with in‐house delivery, and the cost‐reducing impact of decentralization has partially waned. It suggests that the influences of these NPM practices on public sector size have diminished in recent years. This replication illuminates the temporal complexity and evolving nature of the NPM practices and their impacts on public sector size.