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Dias, Reinhard & Souza                                                                      Page 3the policies for pattern...
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Dias, Reinhard & Souza                                                                     Page 5use of any specific servi...
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Dias, Reinhard & Souza                                                                     Page 7The high political profil...
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  1. 1. Page 1 ICT ENABLED ORGANIZATIONAL CHANGES AND PUBLIC SECTOR REFORMS: A POLICY PERSPECTIVE Isabel Meiroz Dias , Nicolau Reinhard ,Cesar Alexandre de Souza 1 2 3Abstract. The objective of this paper is to identify the relationship between two areas ofpublic policy: Information and Communication Technologies (ICT) and publicadministration. Our case study is the State of São Paulo, the largest state in Brazil in terms ofthe number of inhabitants, and share of the country’s GDP. In order to answer the researchquestion we identify the events in which significant changes happened involving eitherorganizational form restructuring, IT implementation, or both. We adopt the concept of policyas evolution, that is, as a continuous process, in which the original plan, formalized in laws,regulations and official statements is continually transformed by the actions ofimplementation.1. IntroductionWhat characterizes a “good government”? Answers to this question depend upon the historicperiod, individual preferences, and the context in which the question is asked, and often leadto discussions regarding the internal structure of government organizations. Throughout theXX century, the dissemination of bureaucratic arrangements and later the New PublicManagement (NPM) ideas were behind many restructuring processes inside governments.Together with this revision of the structure of the State, and in many ways reinforcing it,information and communication technologies (ICT) have been supporting all kinds ofinnovations inside organizations: from simple process alterations to deep strategicrealignments. Although there is clearly a relationship between ICT and public sector reform,there is still much to be understood about their mutual influences.In order to contribute to this debate, we analyze the case of the São Paulo State Government,which made significant investments in ICT between 1995 and 2006, while simultaneouslypromoting deep organizational changes. We will not only look at the changes in publicadministration where ICT were used, but also analyze the public administration policy ingeneral, and the transformations that took place regardless of ICT. This approach allows for awider view of the reform and a better understanding of the role played by ICT in governmentrestructuring initiatives. Our working assumption is that reform ideas shaped and pushed theuse of ICT by the government, in the same way that ICT acts as a trigger for reform.2. Literature ReviewOur research adopts the concept of policy as evolution [12], an ongoing process, in which theoriginal plan, formalized in laws and official documents, is constantly transformed by actionsof implementation. While a policy is being shaped, original resources and objectives aremodified, causing new laws and regulations to be created.1 University de São Paulo, Brazil, meiroz@gmail.com2 University of São Paulo, Brazil, reinhard@usp.br3 University of São Paulo, Brazil,
  2. 2. Page 2 ICT Enabled Organizational Changes and Public Sector ReformsIn the literature review it is possible to find at least three different ways of approaching therelationship between IT and state reform. One of the ways of studying this relationship is toevaluate ICT’s “transformative potential”, or the depth and width of the changes enabled byICT. Under this perspective, the literature can be divided in three streams: carefulconsiderations, which describe the changes brought by ICT as incremental (for instance,Hudson [8]); moderately optimistic, which call one’s attention to the necessity of creating alarge base of support for wider transformations (such as in Madon et al. [11]); and openenthusiasm, along with the expectation that ICT will bring an general, wide and structurallydistinct influence to governance arrangements (as in Dunleavy et al. [3]).Another perspective about the relationship between ICT and reform focuses on the degree ofinteraction between these policies, and how much ICT is relevant in a reform context. One ofthe manners of approaching this question is by ignoring it completely. Researchers in the areaof public sector reform have frequently failed to mention what role to expect ICT to play ingovernment restructuring initiatives [7],[14]. Other researchers understand that the use of ICTin the public sector is not a policy in itself, but rather one of the areas of a publicadministration policy [6]. Some believe the opposite, which is that ICT is an enabler of publicsector reforms, or even more, that ICT is actually essential for the current wave of reforms[4], [9]. Finally, there are those researches that suggest that ICT enables specifically one typeof reform, those that are strongly influenced by the NPM [2], [9].A third way of approaching the relationship ICT-reform is analyzing the public administrationprinciples supported by ICT implementations. Since the beginning of the 20th century, at leastthree public administration models have emerged: Bureaucracy, New Public Management,and Governance (or a networked government). Although, as mentioned, ICT are frequentlydescribed as connected to the principles of NPM, there is also evidence that technology mightsupport policy objectives quite distinct from the essence of NPM, such as social welfare andthe increased participation of citizens in the political process [1, 13], and there are those whobelieve that the use of ICT inside governments is creating a completely new organizationalform. [3]3. Research Questions and MethodologyThe research objective is to identify the relationship between public administration policy andICT policy in the State of Sao Paulo, between 1995 and 2006. Our working assumption is thatthese two policies interact, and that ICT policy influences administration policy as much asthe ideas about how to improve the public sector have influenced ICT initiatives. The researchquestion is: What is the relationship between public administration and ICT policies? Toanswer this question we identify areas of convergence (or diversion) between both policies,and if there is a relationship of precedence or dependence between them. For this purpose webuilt a narrative which describes the main events during which significant modifications inthe organizational form, or relevant ICT implementations, took place. The narrative includesthe declared intentions of the policy, formalized in laws, regulations and official statements,in which we search for explicit values and assumptions that act as justifications for the policy,and whether these include any mentions to the role to be played by ICT. It also includes theemerging policy, which can be identified ex post in the overall direction taken by the policy.Other elements of the narrative are the relevant external factors that had a direct impact on thepolicies. After identifying the most significant events and building the narrative for the elevenyear period, we analyzed the degree of convergence between both sets of policies. We search
  3. 3. Dias, Reinhard & Souza Page 3the policies for patterns in governmental action and in the use of resources. This is importantto understand what type of public sector reform was being pursued.The State of São Paulo is the largest state in Brazil in terms of its population (about 40 millionpeople) and share of the country’s GDP (about 30% of the Country’s GDP). Brazil is the mostpopulous country in Latin America (about 190 million). The Country has been recognized forits many initiatives in the use of ICT in the public sector, like the electronic filing of personalincome tax return and the use of electronic voting. The State of São Paulo has been one of theleading states in Brazil regarding the introduction ICT innovations in the public sector.Data were collected between March 2004 and August 2006, while one of the researchersworked as consultant and instructor for the State Government. This participant observationstage was later complemented with in-depth interviews with key actors: two representativesfrom the top government hierarchy, who contributed with their political view, and three seniorcivil servants, strongly involved with both administration and ICT policies. Besides theprimary data collection, the explicit component of the policies was covered with the aid ofdocumentation analysis, including laws, regulations, articles and books published by thegovernment. The combination of primary and secondary data allowed reconstructing the mainevents of the period and writing the narrative, which was divided in three stages ofapproximately four years each, allowing the investigation of a longer historic period [15].4. The Case Study4.1 The First Stage (1995-1998)During the first half of the 1990s the public sector reform was high up in government agendasthroughout Brazil. On the federal level the ideas of NPM were influencing a movement inwhich the government would keep its core activities, but work with the private and thirdsectors in service delivery, and regulate the provision of utility services by private companies.These ideas were an important source of inspiration to Brazilian states, which have enoughautonomy to formulate their own policies, but saw this reform as the answer to a series ofdifficulties – in particular, the then severe financial crisis. Simultaneously, recent ICTinnovations were reinforcing reform initiatives. The dissemination of the internet became anincentive for governments to rethink their relationship with citizens and contractors. Manysaw ICT as the natural solution to improve administration and technology was for the firsttime reaching the centre of the political stage,.In Sao Paulo the situation was the same. The public sector reform was a major campaignproposition of Mario Covas, who was in 1994 a candidate for the government of the state. Therole of ICT was central in their proposition: technology was seen as the way to enablechanges, not only improving service delivery, but changing government as such. The severefinancial crisis faced by the State of Sao Paulo when Covas eventually won the election andtook charge in 1995 meant that the reform, with the use of ICT, would actually be the priorityof Covas’ first mandate, and the driver behind his main administration goals.Although ICT was considered strategic by Covas government, this does not mean that thedirections of the reform were simply following possibilities opened up by availabletechnology. On the contrary, during Covas’ first mandate, ICT and strategy were aligned atthe highest hierarchical levels. The group responsible for the main ICT implementations wasled by politicians and administrators with no technical background, being supported by
  4. 4. Page 4 ICT Enabled Organizational Changes and Public Sector Reformsspecialists from Prodesp, the state-owned data processing company, who were transferred tothe governor’s office, reporting directly to the strategic management team.This situation allowed the implementation of large corporate systems, with tax collection andincreased control over expenses as priorities. The systems would run on a network that wasfor the first time connecting the top level of administration in the State. Although designedmainly to improve operations, the systems also brought significant process changes. Forinstance, the consolidation of data originating from all secretariats immediately led tocomparisons amongst Secretaries, and forced them to become familiar with details ofoperations under their responsibility. One example from this period was the implementationof the state-wide, totally centralized budgeting, financial control and accountancy system(named SIAFEM), which led to an enormous process transformation, affecting allgovernment units, standardizing procedures, allowing for the establishment of referenceprices for nearly all government purchases.Although we argue that the ICT implementations followed the guidelines proposed for thereform and not the other way around, it is important to mention that these systems owed theirexistence to and were strongly constrained by the infrastructure already available at the time.Thus, even though the reform was guiding ICT implementations, the systems were not builtfrom scratch, but rather evolved from whatever infrastructure was already in place.Government managers at the time also mention the personal involvement of the Governor asone of the important reform enabling factors. But besides this favorable internal environment,Brazil’s successful inflation control policies greatly contributed to the improvement of theState’s financial situation. Another relevant factor was the loan obtained by state from theInternational Development Bank, which financed the restructuring of financial, budgetary andaccountancy controls program.4.2 The Second Stage (1999-2002)In 1999, Covas was re-elected and started a second mandate. This time the balance betweenICT and administration policies began to shift. Financial recovery was not a central concernanymore, and the reform lost momentum. The government plan for the re-election campaigndid not emphasize reform, but rather focused on specific policies, with objectives such ascreating jobs and building highways. Possibly due to the weakening of the reform initiativesin the period, ICT policies would grow in importance and become associated with a ‘newmanagement style’: electronic government. The government plan mentioned the constructionof a ‘organizational model’ for ICT management, as well as the implementation of atechnological infrastructure and the use of ICT for service delivery, which suggests that,rather than being subordinated to other policies, ICT began to be seen as a political force of itsown. Ironically, while ICT became more important conceptually, there were not as manystrategic ICT implementations during this period, when compared to the previous one.Governor Covas died in the middle of the mandate in 2001, with Vice-governor GeraldoAlckmin completing the term. This change produced some disruption in the government.Although projects such as the automation of vehicle tax collection, and the electronicprocurement exchange were reminiscent of the guidelines followed in the previous period,between 1999 and 2002 it is possible to identify ICT investments not directly associated withthe reform. A very eloquent example of this new approach is the public telecentre - digitalinclusion programme, AccessSP: instead of supporting a specific reform objective, asprevious investments in ICT did, its guiding principle was the importance of technology itself.Users of AccessSP telecentres are free to use computers without being directed towards the
  5. 5. Dias, Reinhard & Souza Page 5use of any specific service. Therefore, the programme would not be justified if consideredonly as a service delivery channel, but should be understood as part of a social policy: ‘accessto ICT as a right of the citizen’, even though its effectiveness has been challenged [10].Another example of this new ICT policy is Intragov, a state-wide data communicationnetwork, developed to support the management systems developed during the previousmandate. This was an investment clearly motivated by technical reasons, and only indirectlyinfluences the reform policies.In this period, secretariats with available financial resources would also develop their specificapplications in parallel. Although these applications were developed with the objective ofimproving service delivery, and could be considered as part of a wider movement ofinnovation in governmental practices, they were not part of a state-wide policy, and were notimplemented by the team located inside the Governor’s office.4.3 The Third Stage (2003 – 2006)Instead of focusing on internal restructuring, the plan for Alckmin’s re-election establishedthe improvement in service delivery as the main objective of public administration. The 4-year government plan approved in this period would mention ‘efficiency’ as the way toimprove service delivery and reach equality and effectiveness in the use of public resources.For the plan formulators efficiency meant establishing partnerships with other governmentlevels and international development agencies, as well as the private and third sectors. In linewith the two previous mandates, once more the plan mentions the necessity of the state towork as a regulator, this time adding a new dimension to this role: to orchestrate the networksamongst all these actors.In this plan, ICT’s participation, although not very clear, is certainly smaller than in the past.ICT is expected to support ‘more dynamic processes’, which would guarantee managementtransparency and effectiveness. In an interview, the Governor declared his belief in bettermanagement as the way to improve service delivery, adding electronic government as a newway of managing, more integrated and less bureaucratic. However, documents show atransition in ICT’s role. Not only its contribution to government was not as clear as before,there were contradictory views in top administration regarding the role of ICT, a symptom ofthe lack of direction.As for the establishment of partnerships, the main achievements between 2002 and 2006 seemto have been expanding the delegation of health services to private partners, and the adoptionof this model by many organizations in the area of culture. Another significant move was thecreation of the institutional model for public-private partnerships. Of course, none of theseinitiatives was dependent on ICT. However, another group of reform initiatives did relyheavily on ICT. Aligned with the efficiency discourse, a state-wide Government procurementsystem was implemented, which had received a considerable emphasis in both the candidate’sgovernment proposal and later in the 4-year plan. Another important reform stream was theimprovement of service delivery, which can be divided in four groups. First, the efforts ofrestructuring that took place inside secretariats, and in these ICT played a variable part.Second, came the publishing of the manual of quality standards for public service delivery, inthis case, with a secondary role for ICT. Nevertheless, the development of the all-governmentencompassing Citizen.sp portal, and the e-poupatempo, a virtual one-stop governmentservices provision portal, show an alignment of ICT with the reform objectives.
  6. 6. Page 6 ICT Enabled Organizational Changes and Public Sector ReformsThe third group of initiatives comprises a series of training programmes, reaching over 80thousand civil servants, with ICT being many times one of the course subjects, if not the mainone. These investments in training meant that the concepts of reform, and the knowledgeabout the results achieved to that date, should reach a wider audience, with a special focus onmiddle level administrators. Finally, the investments made in internal communications canalso be seen as part of the efforts to improve service delivery, and an attempt to consolidateall reform initiatives that had been taking place since 1995. The launch of a magazine and anaward (Mario Covas Award), both devoted to the subject of innovation in publicadministration, were meant to motivate practices considered desirable by top government andworked as a window to the various changes that had been implemented.This period also saw the creation of a state-wide organisational structure for ICTmanagement, directly linked to CQGP (Quality in Public Management Committee), whichwas the State’s central ICT and quality governance committee. This can be seen as an attemptto gain more influence in the secretariats’ ICT policy making process. The increase in thenumber of ICT projects justified a more integrated coordination of the central governancegroup activities and the projects developed by individual secretariats. However, this provedhard to implement. One of the main difficulties was that not all government units consolidatedtheir ICT budgets in one single account in the 4-year plan. Many managers would prefer theflexibility of deciding on their own on their ICT investments out of their total budget. Otherlimiting factors were the contrasting visions about ICT, even amongst the small group closestto the governor. Finally, the creation of a formal ICT management structure in which Prodespdid not occupy the central role was a frequent source of conflicts that eventually becamepolitically unbearable. Still, while the ICT structure built around CQGP lasted, it actuallymade significant accomplishments. Although this formal structure had limited autonomy toenforce guidelines throughout the government and had to depend strongly on its ability toinfluence and negotiate, this did not invalidate the group’s importance as policy makers.The period between 2002 and 2006 is, therefore, difficult to classify. There was not one singlestrong and well defined concept guiding neither ICT nor reform policies. Nevertheless, bothwere still clearly in the centre of the political agenda, and in many ways aligned. One way ofseeing it is that, after having dealt with the most dramatic problems of public administration,the new investments in the area became more fragmented, even though it is possible to draw aline of convergence amongst them. The construction of a governance network and theimprovement of service delivery are more generic accomplishments that could not bemeasured in the same way as the financial recovery.5. FindingsThe main research question was ‘What is the relationship between ICT and publicadministration policies?’ This relationship varied over time. The subdivision of the researchperiod in three different stages, corresponding to the three different mandates is useful toanswer the question. During the first period, financial balance was the main focus of thereform. Nevertheless, in Sao Paulo, financial stability worked as a trigger for a wider reform,and its effects modified how the State worked. The reform, and ICT by extension, was on topof the political agenda during that period. On one hand, important reform events happenedregardless of any ICT applications. On the other hand, the important investments in ICT wereall strongly connected to the reform objectives which could be interpreted as subordination ofICT to administration. This situation converges with the stream of literature that understandsthe use of ICT as one an area of administration policy.
  7. 7. Dias, Reinhard & Souza Page 7The high political profile of the administration policy during the first stage of the case studymight have been made possible thanks to the presence of the elements described in theliterature [14] as essential to sustaining a reform strategy: centralized government authority,an agreement among main leaders agreed on the reform objectives, in addition toorganizational capacity and public acceptance. The Governor had just been elected, and had avery specific goal to achieve (financial balance). However, once these elements lost theirinitial momentum, the reform became fragmented. The ICT policy during the second stagereflects this lack of direction, since the main actions in this later period are not subordinatedto the administration policy, making it possible to identify an agenda of its own for ICT.In this case study we observed the effects of the lack of clear reform directions, especiallyafter 1999, when the guiding principles for the administration policy became considerablydispersed. During this second stage there was practically no alignment between administrationand ICT policies, and in certain occasions ICT policy went as far as to trigger reform actions(for instance in the case of car tax system). However, due to the lack of coordination betweeninitiatives, and the absence of a clear direction for them, there is no support to the affirmationthat ICT enabled an administration policy.During the third stage (Alckmin’s second mandate), even with the reform being largelydissipated into a series of fragmented actions, ICT policy seems once again to follow theguidelines of the administration policy. There was a frustrated attempt to increase therelevance of ICT to the reform, and of the ICT policy guiding administration. Ironically, thisinitiative, and its subsequent failure, opened the space for the service provider Prodesp to takecontrol of ICT in the State towards the end of this period. Overall, throughout all three stages,it is possible that technology may have induced changes in situations where there was avacuum of direction, which might have been the case of some smaller secretariats, in whichICT acted as leverage for policies that were formed around the available technology and largesystems, such as SIAFEM and Intragov.The case study does not support the argument that ICT brings a general, wide and structurallydistinct influence for governance arrangements (as has been suggested by Dunleavy et al. [3]).But one cannot claim either, that changes were merely incremental, with effects visible onlyon the long run (such as suggested by Hudson [8]). There is evidence in the case that ICT hasenabled considerable transformation in government processes, especially when aligned toadministration policy objectives. Regarding the degree of interaction between administrationand ICT policies, the case analysis supports the claim that ICT enables administrationreforms, and there are situations in which it played an essential role, as has been described inthe literature [4, 5, 8]. However, the importance of ICT to the reforms cannot be generalizedto the administration policy as a whole. Therefore, the case analysis does not support theclaim that the administration policy depends upon ICT as an enabler. Quite on contrary, therewhere occasions throughout the period studied in which ICT would be reduced to just anotherdimension of the administration policy, as suggested in the literature. And, overall, theattempts to establish an ICT policy independently of the administration policy did not provesustainable.Also, the case analysis supports the perspective that ICT may enable administration principlesthat are not restricted to the NPM [1, 13]. On the other hand, an important characteristic of theNPM (and of the bureaucratic model) is the top down implementation, without theparticipation of those directly affected by changes. And, in this regard, there seems to be agreater convergence between the administration and ICT policies and the NPM principles.
  8. 8. Page 8 ICT Enabled Organizational Changes and Public Sector ReformsThis research adopted the perspective of internal uses of ICT, with the purpose oforganizational change. This focus reflects clear choices made by the Government of SãoPaulo (and, by extension, of this research). Directing ICT investments inwardly implies thatother ICT policies may be left behind, such as the development of a local software industry.References[1]Avgerou, C., Ciborra, C., Cordella, A., Kallinikos, J. and Smith, M. L (2006) E-Government and Trust in theState: Lessons from Electronic Tax Systems in Chile and Brazil. Working Paper. London School of Economicsand Political Science.[2]Ciborra, C. (2003) E-government: Between Development and War. In: Järvi, T. and Reijonen, P. (eds.).People and Computers. Turku: TUCS Publications.[3]Dunleavy, P., Margetts, H., Bastow, S. and Tinkler, J. (2006a) New Public Management is Dead – Long LiveDigital-Era Governance. Journal of Public Administration Research and Theory, v. 16, n. 3, p. 467-494.[4]Fountain, J. (2001) Building the Virtual State. Washington, D. C.: Brookings Institution Press.[5]Fountain, J. (2004) Prospects for the Virtual State. Working Paper. Center of Excellence Program onInvention of Policy Systems in Advanced Countries. Graduate School of Law and Politics, University of Tokyo,Japan, 09/2004.[6]Gaetani, F. (2004) Políticas de gestão pública e políticas regulatórias: contrastes e interfaces. IX CongresoInternacional del CLAD sobre la Reforma del Estado y de la Administración Pública. Madrid, Spain,2-5/11/2004 (in Portuguese).[7]Hood, C. (1991) A Public Management for All Seasons? Public Management, v. 69, n. 1, p. 3-19.[8]Hudson, J. (1999) Informatization and Public Administration: A Political Science Perspective. Information,Communication & Society, v. 2, n. 3, p. 318-339.[9]Hughes, O. E. (2003) Public Management and Administration, 3rd ed. New York: Palgrave Macmillan.[10]Madon, S., Reinhard, N., Roode, D. and Walsham G. (2006) Digital Inclusion Projects in DevelopingCountries. In: Trauth, E., Howcroft, D., Butler, T., Fitzgerald, B. and Degross, J. (eds.). Social Inclusion:Societal and Organization Implications for Information Systems. IFIP International Federation for InformationProcessing, v. 208, p. 67-70.[11]Madon, S., Sahay, S. and Sahay, J. (2004) Implementing property tax reforms in Bangalore: an actor-network perspective. Information and Organization, v. 14, n. 4, p. 269-295.[12]Majone, G. and Wildavsky, A. (1995) Implementation as Evolution. In: Theodoulou, S. Z. and Cahn, M. A.Public policy: the essential readings. Upper Saddle River, New Jersey: Prentice Hall.[13]Navarra, D. D. and Cornford, T. (2006) The State, Democracy and the Limits of New Public Management:Exploring Alternative Models of E-Government. eGovernment Workshop ’06, Brunel University, London,11/11/2006.[14]Pollitt C. and Bouckaert G. (2004) Public Management Reform. 2 ed. New York: Oxford University Press.[15]Pozzebon, M. and Pinsonneault A. (2005) Challenges in Conduction Empirical Work Using StructurationTheory: Learning from IT research. Organization Studies, v. 29, n.9.