Innovation in public organizations: do government reforms matter?

Purpose The purpose of this study is to examine the impact of New Public Management (NPM) reforms/practices on innovation in public sector organizations. Although much is written on NPM, the assumption that NPM reforms stimulate organizational innovation has not been empirically tested. The present study is an attempt to bridge this research gap. Design/methodology/approach Building on open-systems approach, institutional theory, and innovation research, this study argues that organizational innovation occurs in response to stimuli in the external (environmental factors) and internal environment (organizational factors), considering NPM reforms/practices as a proxy for external or environmental factors. Organizational factors include formal structural complexity, senior management support and job security. The study tests this model using data from a national survey conducted in five states in the US. Findings The study provides empirical insights into our understanding of the factors that drive innovation in public sector organizations. The study finds that although environmental factors are as significant as organizational factors in driving innovation in the public sector, senior management support remains the most important predictor of innovation. Originality/value This paper fulfils an identified need to study the effect of NPM reforms and practices on innovation in public organizational settings.