This paper begins with a review of thebroad motivations behind the New Public Sector Management(NPSM), including intrinsic differences between public andprivate organizations that appear to impact on incentivesand performance. The experience in selected OECD countriesis reviewed where the financing and delivery of health andother social services is heavily socialized with a strongpublic sector role, taxpayers have expressed dissatisfactionwith traditional modes of public sector management, and NPSMreforms have been hotly debated. Part II of the paper thendescribes the NPSM paradigm in terms of three buildingblocks that influence the performance of public agencies andthe behaviors of employees who work for them. It explainshow leverage points within the NPSM paradigm are expected tocreate incentives for improved performance. It is when allthree building blocks of the NPSM paradigm work togetherthat synergies are expected to take place, and thatcontinuous improvements in the performance of publicagencies are expected to be generated over time. Part IIIillustrates five organizational strategies that can be usedto introduce NPSM into public agencies in the nationalhealth system. Much of Part III refers to developing country applications.