Transcript eGovernment, Public Sector reform, and Poverty Reduction. April 18, 2006 PREM Week

eGovernment, Public Sector reform, and
Poverty Reduction.
April 18, 2006
PREM Week
Linkages and debate around ICT and PSR
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Skepticism and perception ICT is a luxury good within WBG
Unlike the major studies on IT’s impact on private sector for the last 25 years, it is only
recently that systematic studies have been made on IT’s impact on the public sector .
Past evidence and perception that IT investments have been risky with questionable
returns and outcomes in public administration.
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IT alone  no major public sector reform champions: => Isolated successes at best, no or
very slow real change in the Admin/Bureaucracy’s approach to public sector management.
If you are operating in that context make sure you start very small, and use all the
champions/PR tools at hand to try to scale-up.
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Willingness to Reform (leadership), with no ICT : Laudable but ineffective as it ignores a
whole decade of research in Impact of ICT on productivity and transformation of supply
chain in private sector. If we chose that route, are we advising our clients in the most costeffective way ?
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Willingness to Reform (leadership) + Sound Introduction of ICT applications + Sustained
Change Management and technology transfer throughout political cycles: Critical success
factors.
Measuring Impact of eGovernment
a must to assess linkages to poverty reduction
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Unlike the major studies on IT’s impact on private sector for the last 25 years, it
is only recently that systematic studies have been made on IT’s impact on the
public sector , and more recently on eGovernment’s impact.
WSIS summits changed the perception of policy makers on ICT4D for
developing countries.
Linkages between ICT, poverty reduction & pro-poor innovation (CK Prahalad)
Linkages between sound Admin transformation & Doing Business indicators
Measurement frameworks developed by Consulting Firms (Accenture, Gartner,
IDC, Forrester, Booz Allen Hamilton, KPMG etc.)
EU: eGovernment Action Plan: Benchmarking Impact
Australia’s Demand & Value Assessment methodology ($1.1 Billions saved 02)
Italy’s modeling of eGovernment (Lucio Picci, 2005)
World Bank Group commissioned a few studies on impact measurement.
The Impact of ICT on Poverty
(Based on 2006 McKinsey &Co study on impact of Mobile phones in Asia)
Major benefits
from mobile
Profile of Mr. Carpenter
– Age: 35
– Location: Beijing
– Profession: Carpenter
who normally stands on
the street waiting for
work
– Monthly income: ~200
USD during the 7
months in cities (rest of
time works in rural area
as peasant)
– Monthly
mobile bill: ~10 USD
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Critical for
ad-hoc
employment
Time saved
getting to
customers’s
house or by
referral
Stay
connected
with family
members
Stay
connected
with clients.
Gets repeat
Customers.
Benefits qualification
– ~USD 100/
month (in
additional
business)
– Valuable time
everyday (6%)
– Surplus re-used
for production
– Emotional
benefits: Less
frustration, more
happiness, hope
and free time.
– Quest for longer
term value:
Quality driving
repeat Customer
Links to Productivity & Growth
On Productivity
On Economic Growth
An increase of 10 mobile
phones per 100 people boosts
GDP growth by 0.6%
A 1% increase in the number of
Internet users increases total
exports by 4.3%.
In 2006, IT usage in China caused
38% increase in total factor
productivity growth and 21% of
GDP growth (Heshmati &Yang).
In US, IT was responsible for 2/3 of
total factor growth in
productivity and all the growth in
labor productivity.
ICT Sector 06: 7% of global GDP,
10% growth, 12% jobs OECD.
Av Annual percentage rates of labor productivity
growth in Selected Countries (1995-2000)
Thailand
(0.9%)
2.1%
1.2%
Philippines
1.8%
(2.3%)
Malaysia
1.2%
Indonesia
(0.7%)
(1.5%)
South Korea
3.5%
2.7%
(5.7%)
5.2%
Singapore
2.2%
USA
1.0%
Labor Productivity
Labor Productivity without ICT
Source: Van Ark et al. (2003)
eGovernment Activities: Assessing Value,
Mapping processes, outputs, and costs
G2G: Transition from traditional to e-Government approach: Impact on poverty?
• Public Expenditure Management (Federal, Municipal/Local)
• Judicial System Management
• Civil service management/payroll
• Taxes & Customs
• Asset Registration (land, vehicles, etc.)
• Social Security and Pension Administration
• Public Health Management-e-Health, clinics/drug administration & mgmt
• Public Education Management, Distance learning and e-Education
• Early disaster warning/prevention
• ………..other G2G activities, processes and applications….
• Procurement for Government (E-Procurement)
G2C: One stop shop with priority services to Citizens: Impact on poverty?
• E-Citizen – one stop shop
• Hundreds of services (refer to Eduardo’s presentation)
G2B
Assessing Value and Return on Investment
Has e-Government led to Cost Reduction? Quality Improvements?
Savings amongst gov agencies
More Customers,
Increased Compliance
Time savings to customers
Availability of information conducive to
Democracy, transparency
Better citizens
First 10 years
Back-end system, Front end
Egovernment service
Capital Investment
For a specific project
Recurring Costs
Maintenance, staff,
New developments
New sites & services
Continue integration
4th Wave: T-government
G2G Platform integration: Assessing Impact
(Courtesy: Gartner Group, 2006)
Cost Savings: eProcurement (e-GP)
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G2G, G2B activity. Government purchases account for 15%-20% of GDP
On-line purchases, 2006: almost 13 Trillions (Forrester)
E-GPs have proven to save money for governments : Between 10-50% on
costs of goods and services based on country benchmarks.
• MERX (Canada)
• GEBIZ (Singapore)
• eMarylandM@rketplace
• Brazil: Total savings/year exceed 25% in costs of services contracted, for a
system that cost $3 millions in Capex.
• ChileCompra (e-tendering and e-purchasing).
• Compranet (Mexico).
• Estonia.
• Sri-Lanka: eProcurement funded under WBG project (too early to tell).
Government savings could be re-invested in pro-poor programs.
E-GP Savings, US economy
Add State & Local Spending
Procurement
Spend ($bn)
US Federal
$245
US State & Local $290
TOTAL
$535
Savings
$49
$58
$117 billion
Source: US Department of Commerce,
2005
Government Services on-line (G2C)
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Australian Centrelink Experience: australia.gov.au
UK: Directgov UK: BusinessLink
Singapore (eGov 2010 Plan): www.igov.sv (winner of several awards)
CitizenConnect and Singapore: EnterpriseOne
USA: www.usa.gov
Canada’s ServiceCanada
Estonia
Hong Kong
Korea
Germany
South Africa
Chile
Cape Verde
India e-Seva www.esevaonline.com
Brazil Poupatempo
Etc…..
Affordable infrastructure to access services
Maximum distribution channels, and Standards
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Government e-Services Portals
Common Access Kiosks (fee based)
(Also called Citizen Assistance Service Centers, Telecenters, service
centers, community centers, etc.)
Self Service
Assisted service, Face to face
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Digital TV (T-government)
Mobile Phone (M-government)
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At the basis: Common Enterprise architecture (Inter-operability framework)
Common standards for data interchange
Unique registries for citizens, businesses, and other entities/assets.
www.usa.gov
Service Canada Portal http://servicecanada.gc.ca
www.australia.gov.au
E-Government benefit study, Australia, 2002
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Australia’s eGovernment benefits (2002) study showed that 90% of egov service
users thought improvements were significant over “traditional” government
interaction.
Study modeled methods of demand and value assessment and conducted intensive
surveys for households and businesses
45% surveyed could quantify cost savings of $10-$25 per transaction, the rest of
those surveyed could not quantify that saving.
Businesses surveyed reported cost savings > $50/transaction.
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.. And they did not have to bribe to get their requests serviced in earlier model!
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Cost savings to governments were
• 67% improved business processes
• 64% reduced costs of servicing (printing, advertisement, etc.)
• 17% cross-agency collaboration
• Benefits to users of egov services are estimated to be a saving of $1.1 Billion in 2002
Access: Gaps in Coverage in Rural Areas
Critical for rural poor to adopt egoverment services
CHALLENGE
WHAT ARE WE DOING?
Population Coverage
70% of the population covered with only 30% of
the geography
Universal Access Funds: Nepal,
Uganda, Nigeria, Pakistan
100%
80%
Community Solutions: Transferring the
Grameen Phone experience to other
markets, MTN Nigeria – with SME
department ($4.3 million TA program)
60%
40%
20%
0% 1% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Shared infrastructure: Tanzania (with
Ericsson), India rural infrastructure
Geographic Coverage
50%
INDIA: Teledensity in urban vs rural areas
40%
30%
New technologies: VSAT / Cellular,
Transmission over power line
Urban teledensity
Rural teledensity
20%
10%
0%
2001
2002
2003
2004
2005
2006
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Access: Gap in Services
CHALLENGE
WHAT ARE WE DOING?
Despite impressive growth in access to
voice, access to the internet remains a
challenge
40.0
15x
more
internet
users
30.0
PPPs for backbone infrastructure:
EASSY(22 countries, 30 operators, 5
DFIs), Indonesia
New broadband solutions: WiMax
(Ukraine, Uruguay)
Broadband networks on other
infrastructure: Central Africa (Pipeline),
DRC (Electricity Transmission). Need to
work with other INF sectors.
20.0
10.0
0.0
Americas
Europe
Internet Users / 100
LAC
SSA (IDA)
Analytical work on importance of
Broadband for trade and growth.
PCs / 100
INDIA: 150 million mobile phones
vs 3 million computers
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Assessing Overall Savings to the Poor
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Electronic delivery: Saving citizen/customers the costs of interruptions,
travel to government’s several agencies per transaction, waiting in line.
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When e-service goes to self-service, uncouples the work by government
side to programming and then replication via software -- like ATM machines
taking over clerical work in banks. Here the per transaction savings is
typically something like 80-90%. Must be calculated based on volume and
current transaction costs.
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With reengineering and modify much of the production flow and tasks, can
typically save something like 30-40% of total per unit costs of service, but
with substantial risk and uncertainty given the political resistance that
comes to such changes.
Assessing Overall Benefits to the Poor
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Simply making things transparent improves accountability and, typically,
efficiency. Useful lesson for increased information disclosure on our own
projects, via local country office web sites, or the Development Gateway.
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In all the above, easier to measure cost reductions for innovations that keep
the outputs the same. In reality, much of the value of innovation comes from
finding entirely new things to produce, and savings to the overall structure.
This is not well measured and we are still struggling to find a good
econometric model to simulate the derived innovation’s benefits.
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Impossible to quantify/model benefits such as satisfaction, social cohesion,
inclusion, democracy etc.
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Allow citizens to acquire ICT skills which may help towards future
employment. Accessing information empowers and inspires.
Linkages eGovernment and Poverty
reduction ?
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Yes if Citizen can benefit from egovernment services in terms of:
– Time, Energy, transportation savings
– Cost savings per transaction (self-service replaces bribery)
(Around R200 were paid/land record in Karnataka)
– Knowledge/information acquired to be a better citizen/worker/parent
– Innovations that benefit the citizen
– Employment possibility in the business of eGovernment
– Enhanced quality of life, service quality, ability to make good decisions.
– Social cohesion, trust and more equity in accessing opportunities
YES If government re-invests savings from its G2G eGovernment savings in
continuous delivery of public social programs targeting poverty reduction.
YES if government keeps focusing on ICT as a tool to support and innovate
in public sector reform, decentralization accountability and transparency
throughout its different political cycles.
Thank you!