Technology and the public sector
From The Economist print edition
Why business succeeds on the web and government mostly fails
IN ONE respect at least, it has been a huge success. Selling new technology to governments has brought private contractors a bonanza of many tens of billions of dollars in the past ten years. Although putting information on the web (call it “i-government”) has worked, our special report shows that “e-government”—using the interactivity and speed of the internet to provide public services—has so far mostly meant high costs and poor returns.
Why is government unable to reap the same benefits as business, which uses technology to lower costs, please customers and raise profits? The three main reasons are lack of competitive pressure, a tendency to reinvent the wheel and a focus on technology rather than organisation.
Governments have few direct rivals. Amazon.com must outdo other online booksellers to win readers' money. Google must beat Yahoo!. Unless every inch of such companies' websites offers stellar clarity and convenience, customers go elsewhere. But if your country's tax-collection online offering is slow, clunky or just plain dull, then tough. When Britain's Inland Revenue website crashed on January 31st—the busiest day of its year—the authorities grudgingly gave taxpayers one day's grace before imposing penalties. They did not offer the chance to pay tax in Sweden instead.
Globalisation provides some substitute. In India, where things too often are still done in triplicate, Andhra Pradesh's pioneering e-seva system lets people pay their utility bills, transfer money, buy railway tickets and so on. Now other parts of India are trying to catch up. In Dubai, public agencies compete to impress the country's go-ahead sheikh, who praises the best and humiliates the laggards.
But shame and beauty contests are still weak forces in the public sector. Failure in bureaucracy means not bankruptcy but writing self-justifying memos, and at worst a transfer elsewhere. Bureaucrats plead that just a bit more time and money will fix the clunky monsters they have created. That kind of thinking has led to the botched computerisation in Britain's National Health Service, where billions of pounds and millions of precious hours are spent on a system that at best will be substandard and at worst dangerously leaky with patients' private medical data.
That reflects another problem. In the private sector, tight budgets for information technology spark innovation. But bureaucrats are suckers for overpriced, overpromised and overengineered systems. The contrast is all the sharper given some of the successes shown by those using open-source software: the District of Columbia, for example, has junked its servers and proprietary software in favour of the standard package of applications offered and hosted by Google.
One ground for hope is that bureaucracies can piggyback on the private sector's experience. Rather than invent new online security systems for the public sector, why not use those already developed by banks, as in Scandinavia?
Interestingly, the examples of good e-government in our special report have a common factor: a tough-minded leader at the top, willing to push change through against the protests of corrupt or incompetent vested interests. It would be nice to think that democracy would do that, concentrating voters' preferences for good government and creating an electoral ratchet in favour of modern, efficient public services. It hasn't happened yet. The paradox is that if you want really efficient e-government, you are more likely to get it in semi-feudal Dubai than in most of the world's biggest democracies.
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