With this week’s high-level EU conference and ministerial meeting, egov2009.se, just completed, there is good reason to put some of the policy issues in perspective. Below I will discuss some of the challenges facing governments in Europe and elsewhere and reflect on the policy priorities. I will argue that some issues and priorities should be reconsidered. Several reasons suggest that is probably advisable to shift focus from production to consumption and rely more on markets and less on regulation in order to realize the full potential of egovernment.
Before proceeding to the policy issues, it is worth starting with a characterization of the current state of egov in countries that are at, or close to, the technology frontier. A brief analysis of the main factors explaining the current situation provides a useful background to a discussion about strategy.
What are the main characteristics of egov today?
A natural starting point is to note that the use of ICT is extensive in most parts of the public sector. Governments have done considerable investment in ICT. And these investments in computer hardware and software as well as digital communications have contributed to increased productivity in many cases.
It is probably fair to say that ICT investments have not primarily been undertaken to innovate or develop new services but rather to reduce internal cost and to facilitate distribution to and collection of information from citizens and companies.
ICT has in this respect improved governments´ openness considerably. It has thus added value for users, whether citizens or companies. Input and output of individualized data from government databases have increased access to information considerably.
A related and interesting observation is that egovernment services, narrowly defined as electronic government services for citizens and companies, typically involve input and output from databases that have existed for a long time. These services are primarily related to the transfer system – i.e. taxes and social benefits – or bilateral communication related to public registers.
As many government databases include sensitive information, it is natural that most government systems are closed to protect privacy and security. A side-effect is that this limits the scope for interaction between government agencies, between service providers and between citizens.
Government services are often the result of local or national political decisions. One side of this is that services are adapted and designed to meet local preferences. The other side of this is that few services permit consumption across international borders.
Now, what can be concluded from these general observations?
First and foremost, egov has been, and remains, primarily an organizational and administrative interest, i.e. a question of how government agencies should produce services and communicate with citizens and companies. Development and investments have been budget-driven. Actions have been undertaken to reduce costs or to facilitate production of public services.
Second, control has been, and still is, a primary concern for the public sector. Designing and maintaining systems that are stable, secure and safe has accordingly been much more important than development of innovative, new services.
Egovernment in the making?
While the current status of egov is quite telling, valuable and perhaps even more interesting lessons can be learnt from an analysis of what egov is not.
Electronic systems are used for procurement and electronic orders. There are, however, surprisingly few electronic markets in which companies can sell products and services to the public sector.
User-contributed services are rare. There has been essentially no bottom-up development of services to date. Why are teachers in public schools not sharing more material and experiences through common knowledge databases? Why are citizens’ contribution to databases on local history limited? Why is public service media not exploiting the strength of user-produced content? Why are health care providers not building systems for patients to share experiences? Etc etc…
In addition, citizens have only limited control over data. Very few systems permit the user to transfer data between competing service providers or across international borders. Portability of data for the citizens is essentially a non-existing phenomenon.
Interaction and communication between citizens, users, employees, decision-makers is limited. Few services exploit the possibility to have direct communication between users and consumers of public services.
Why is the full potential of egov not realized?
The most obvious reason is that innovation rarely has any immediate positive effect on a single government agency´s budget. Unlike cost-reducing investments that are easily measured and motivated, it is significantly harder to motivate investment with a non-measurable contribution to the utility of citizens.
Second, legal rather than commercial principles dominate the public sector´s activities. For instance, public procurement is not undertaken under the same flexible and dynamic conditions as private procurement. The public sector is bound by the fundamental principles of equal treatment, rule of law and transparency. In combination with an extensive right to appeal, this results in cautious administrative behavior.
Third, many ICT systems have considerable network externalities, i.e. the value to a single user increases as the number of other users increases. Network externalities can be either on the demand side, the supply side, or both. Creating certain systems, particularly electronic markets, accordingly requires that a coordination problem is solved. Significant scale economies as a result of large fixed costs often make this infeasible for a single government body.
Fourth, hardware and software lends itself naturally to global or international use as technologies are generic and transportation costs are low. Governments on the other hand have geographically limited jurisdiction. They provide local and national services and have little interest in development of services that can be exploited on an international scale.
Fifth, any service provider, including single agencies or organizations in the public sector, has limited interest in facilitating substitution. It is consequently not surprising that the scope for citizens to port data is limited. Also worth noting is that transfer of data across international borders is limited by the jurisdiction of each welfare state.
All in all, one needs to conclude that there are many historical, institutional and legal barriers that hinder the realization of the full potential of egov. Unless these barriers are dismantled it is quite likely that many hopes that the new technology brings, including cross-border mobility, user-contributed services, innovative solutions and involvement of citizens, will not materialize.
