Foundations of public administration: The role of economics

The science of public administration is widely recognized as interdisciplinary, integrating a number of other social sciences. Although there is no unity about the sciences that should be included in the composition of the sources for the public administration's study, the most common in the world literature are suggestions about political, managerial, legal sciences, and sociology. Economics is also mentioned, however, the theories and models that can make a significant contribution to improving the current state of the public administration science are not discussed. This article analyzes a widespread concept of New Public Management. We show how the elements that generate negative consequences in the provision of a number of public services, such as healthcare and education, are "embedded" in the design of this approach to reform the public administration system. These consequences occur due to the use of incentive contracts in which the valid measures of quality of services cannot be implemented. This fact encourages employees to engage in opportunistic behavior in the form of gaming. Many people call these negative consequences "unintended", although they are such only because the reformers did not know a number of the principal-agent model and contract theory statements, which were already obtained at the beginning of the wide proliferation of the New Public Management. However, in the world literature there is a widespread point of view according to which the principal-agent model is among the scientific foundations of the New Public Management, which is far from reality. The article substantiates a number of economic theories to underpin public administration, to improve the quality of scientific foundation, as well as the level of education in this field.