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Electronic Markets and E-Government’ SPECIAL SECTION: ‘ELECTRONIC MARKETS AND E-GOVERNMENT’ Preface to the Focus Theme Section: ‘Electronic Markets and e-Government’ MOGENS KUEHN PEDERSEN, JANE FOUNTAIN AND EURIPIDIS LOUKIS INTRODUCTION government needs to consider mar- kets for differentiated products and E-government or digital govern- services to satisfy the variation of ment (DG) has become a global needs among its citizens. Electronic theme in governments pursuing an markets (EMs) may be just that kind agenda of providing citizen services of application that will trigger requi- and increasing agency efficiency site information from citizens in using IT. In 2002 this journal order to offer them the relevant introduced the theme of e-govern- government service. ment (Electronic Markets – The Digital government has a very International Journal – Vol. 12, No broad objective – bringing public 3, Summer 2002 – Focus theme services to citizen and business section on e-Government). Just like online – and so have electronic then, e-commerce is today consid- markets – bringing commercial ered a trigger of e-government. activities online – and for the same Citizens have acquired competence reasons: both digital government in handling and operating e-com- (DG) and electronic markets (EM) Downloaded By: [Schmelich, Volker] At: 11:40 24 March 2010 merce applications (net banking, e- are information systems based on ticketing, e-shopping) but most information processes embedding governments have not offered public IT in domains of practices that are digital self-service to the same rooted in traditions of servicing degree (Cap Gemini 2005) and the government and corporations public digital services that have been respectively, while the objective of introduced are generally used to a DG is to serve citizens and of EM to lesser degree than private services serve customers. The paradoxes of (Graafland-Essers and Ettedgui DG and EM are also alike: With 2003). existing administrative and com- 2006 Electronic Markets In 2002 the editors presented mercial practices to implement DG ß research showing the different and EM to achieve the abolishment impacts of similar applications in of those practices. DG and EM different countries leading to the are aligned in digital government Volume 16 (4): 263-273. www.electronicmarkets.org DOI: 10.1080/10196780600999601 Copyright realization that a government in electronic markets (DG-EM) servi- one country cannot expect an appli- cing citizens and businesses with cation to draw the same public as it objectives of – or on behalf of – does elsewhere. Likewise, one government. Authors should not expect citizens to react Electronic markets are dual the same to an application. Instead, a defined by their information design 264 Mogens Kuehn Pedersen, Jane Fountain and Euripidis Loukis & Preface to the Focus Theme Section and by their exchange or transactional qualities. The and interventions where market performance was so actual transfer of goods and services may take place in deficient as to require a control of performance, such as other channels than electronic according to their in monopoly and cartel policies. properties. The dual definition evokes elements both In addition, governments have facilitated the creation from information science and from economic theory. A of private markets, for instance in environmental dual approach determines relevant and necessary ele- protection, where carbon dioxide emissions are traded ments of information systems design for EMs. Added to across borders (EU Emission Rights 2005), but also as these, objectives and processes of government are part of rebuilding industrial power, as in the case of further factors determining a DG-EM. Japan in the postwar years (in the 1950s) adopting a In this preface/introductory paper digital government staggered entry, selective industry policy of commission- electronic markets (DG-EM) are studied from the ing at first one company to license a US technology (in perspectives of government, economics, information fibres), and then, a few years later, another company to systems and design. license the newest US technology in order gradually to After a brief introduction to digital government and trigger competition in the home market (Ozawa 1980). its association with electronic markets, we embark on a Today, governments adopt auctions (a basic market theoretical analysis of markets. The first step is ‘natural’ mechanism) to license cellular bandwidth to a handful of markets confronted with the theory of markets as companies to achieve both a financial surplus and to production of an information good in order to under- leverage fast-paced launch of a competitive, commercial stand EM properties. In the global Internet, EM has market based on the latest technology, thus imitating emerged in some cases without the essential properties the competitive dynamics of a staggered entry of of ‘natural’ markets. Second, electronic markets can be technology (Anandalingam et al. 2005). designed by reference to a set of properties beside those Governments also apply markets for the purpose of of ‘natural’ markets. No single optimal design presents increasing public welfare as in the case of health services itself, many designs are possible. The analysis explains and education delivered by competing institutions. why a DG-EM is not a premeditated design but more Applying market creation and public participation as like an option that is still not well-defined. Optimal mechanisms for welfare and industrial policy does not designs of electronic markets seem utopian in both preempt the potential use of the market for government private and public markets. Designing DG-EMs is thus purposes. not a purely technical exercise to achieve efficiency. It is Moreover, many countries, as part of their ‘e- required to determine legitimate objectives of digital democracy’ programmes, organize ‘e-consultations’ government along with a strategy for an IT architecture (OECD 2001, 2003b) in order to enhance the and governance to exploit the exuberantly innovative world of IT. This is a call for adding a political value engagement of citizens in public policy making, enabling orientation like ‘good government’ (see beneath) to them to express their needs (i.e., what public goods, digital government. services, works, etc. they need) in a much better and The focus theme section presents outstanding easier way in comparison with the traditional govern- research into how governments in various parts of the ment–citizen communication channels. These e-consul- Downloaded By: [Schmelich, Volker] At: 11:40 24 March 2010 world have embarked upon the determination of EM tations can be viewed as another ‘market-type’ objectives – direct and indirect – and the measures taken mechanism for determining demand for public goods, to prepare citizens and business better to take part in the services, works, etc. E-consultation and similar e- future DG-EMs and other mechanisms of digital democratic processes are still in their infancy, but have government. If conditions and constraints formed are considerable potential. An example of these processes is not appropriate to citizens and business, digital govern- presented in the focus theme section (Pension Reform in ment will not itself become a vision turned into reality: A Sweden). ‘good government’ in the networked information Governments also adopt industrial policies to promote society. new technologies. This is the case for the Internet. At the Second EU/CEEC Forum on the Information Society in Prague, 12–13 September 1996, it was agreed DIGITAL GOVERNMENT AND ELECTRONIC MARKETS: to start concrete Information Society activities concern- AN OXYMORON? ing inter alia ‘Application of Information and Communications Technologies in public administra- Markets have purely been the prerogative of business, tions’ (Digital Economy: Policies Exchange and not of government, which have relied upon bureaucracy Development for SMEs 2001). The action programme as the way to command and control citizen and business. considered the Internet as a promising new technology However, for many decades governments have engen- where any regulation would jeopardize the high dered and facilitated efficient private markets, and expectations of the promising Information Society but protected or controlled others, applying regulations also marks the extension of the reach of the agenda of Electronic Markets Vol. 16 No 4 265 Information Society to government administration in entrepreneurial and company-minded approach to citi- EU member states. zens and businesses as customers. Expecting that Governments also look to electronic markets as a markets produce formal equality and transactional vehicle for government policies driving citizens or rationality it is expected that they will in turn positively businesses to adopt technologies considered appropriate affect bureaucracy so that it becomes more service by government as steps towards commercial EMs; for minded. When government serves private business example in the case of digital customs clearance reducing better that will strengthen efficiency and the competi- government’s costs in control of trade and easing private tiveness of private firms. Implementation of EMs, company administrative procedures; digital company procurement portals, standardized grant procedures self-registration ensuring government agencies an and other mechanisms are all considered appropriate instant electronic file of each new company registration means within this
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