Table of Contents

Editorial

Welcome to this issue of the newsletter in 2003. Monica and Ankita of the Centre for Electronic Governance IIMA have worked hard to put this together. This is a significant year for WG 9.4. Dr. Chrisanthi Avgerou has completed two terms as the chirperson and so the baton passes to a new Chair. Let me join other members of the WG 9.4 community in welcoming Dr. Abiodun Bada as the new Chair of WG9.4. His nomination was approved by TC9 in its latest meeting on 24th May 2003 in Athens. Shirin Madon will continue as secretary of the group for another year. Thanks to Chrisanthi for her leadership during the last six years.

Dr. Bada is originally from Nigeria and he still keeps good links with his country. He is currently Assistant Professor at Virginia State University in the US. He holds a BSc degree in Business and Finance from the University of East London, an MSc in Analysis, Design & Management of Information Systems from the London School of Economics, and a PhD again from the London School of Economics. The title of his doctoral thesis is 'Global practices and local contexts: implementing technology-based change in a developing countries context' and concerns the efforts of Nigerian banks to take up IT and re-organize.

I am sure that the new team will soon begin to work on plans for the next big conference of WG 9.4. Four international conferences that I attended in the last year seem to suggest a new trend—the theme of ICT and development is rediscovering itself and professionals other than in IS/IT are keen to discuss the topic. Three of these were held in Bangalore, India and involved a large number of economists, political scientists and a few IS professionals. The first two focused on ICT and development. The most recent one in Bangalore was the Annual Bank Conference on Development Economics (ABCDE), held for the first time outside Washington. An Indian city being chosen as the venue reflects the growing stature of India in the global scenario. The fourth was the 11th Annual Conference on Anti-Corruption held in Seoul during 25-28 June. It is interesting that all these conferences recognized the important role of ICTs in impacting development in general and specifically in combating transparency and corruption. Workshops at these conferences discussed the promise and challenges of using ICTs for development and lowering corruption. Often ICTs are discussed mostly amongst the IS/IT professionals. IFIP WG 9.4 tries to involve a broader spectrum of IS professionals—those who are interested in social science research on IT issues. These four conferences represented a step further -- economists and social activists discussing ICTs. Such main streaming of ideas that WG 9.4 stands for is very welcome. WG 9.4 would need to find its own niche, given that a large number of conferences are now discussing ICT and development.

Placing the discussions on ICT in the context of anti-corruption, it was clear that corruption is a complex problem that needs multi pronged actions -- e-government is just one such initiative that has the potential to limit some forms of corruption. Many large and complex systems in the Government can be made more efficient through computerization. However, for improving transparency of these systems, E-Government solution should be seen as a necessary condition, but not a sufficient condition. For E-government solutions to be effective and sustainable, they need be aligned with wider public sector reform.

Without strong political commitment and efficient project management, e-government applications, especially designed as anti-corruption strategy, is unlikely to be successful. Significant process re-engineering should be done prior to computerization to avoid the risk of simply replicating existing processes, which lack transparency and efficiency

It needs to be recognized that many of e-government applications are still in a nascent stage and comprehensive analysis to analyze their long-term impact on improving transparency needs to be done. This does not mean that Governments should not initiate E-Government projects. The trick is to learn by doing—start small and then scale up successes.

A Personal Account of ABCDE in Bangalore and 11^th Conference on Anti-Corruption in Seoul

Subhash Bhatnagar

The first two days at the Annual Bank Conference on Development Economics (ABCDE)in Bangalore were a mixed bag—some esoteric research on evaluation for replicating pilots and some ideological baggage on the goodness of free market policies The two key notes, one by Nick Stern, the Chief Economist of the Bank (former Professor at LSE) and Rakesh Mohan, Deputy Governor of the Reserve Bank of India were interesting. Nick’s balanced remarks raised the crucial issue of the efficacy of the trickle-down effect. His knowledge of India is personal—through annual visits to Palanpur, a village in the state of Uttar Pradesh. He praised the Indian reform effort and noted the positive impacts on aggregate indicators. He felt that Palanpur too had changed, but when it came to the 'real' poor they seem to be where they were many years ago. Rakesh in his forthright analysis of India’s progress in infrastructure development pointed to the significant growth of telephones (45 million telephones and 15 million cell phones) and national highways and praised the performance in these sectors and identified the power sector and railways as sectors where much needs to be done. The telecom and roads sector continues the same way as the rest of development story—the poor continue to be left out. Success of roads can be attributed to the effective utilization of the road cess on petrol. One does not know as to how the Universal Service Obligation funds are being utilized.

The third day of ABCDE showcased the reform in Governance in the state of Karnataka. Three of the presentations were on E-Government projects including the main show piece—the Bhoomi project. I am happy that at least for India, the World Bank has recognized the potential utility of E-Government a s a tool for Governance reform. ABCDE papers and presentations are accessible on the World Bank ABCDE web site.

http://econ.worldbank.org/abcde/index.php?confid=24847

The 11th International Anti-Corruption Conference (IACC) in comparison with ABCDE was a grander affair. Nearly 800 delegates from 100 countries participated. It was a Transparency International show with the Government of the Republic of Korea participating with full vigor to demonstrate their resolve to fight corruption. The movement is in an activist mode. The pomp and show and the publicity is as important as the actual deliberations. I attended some sessions that discussed E-Government. The conclusions were realistic—E Government can create an impact on administrative corruption but there are many challenges in implementing such projects.

I chaired a session in which the CEO of FreeBalance, a private Canadian Company presented the experience of implementing Financial Management Systems in Afghanistan, Kosovo, and East Timor. In Afghanistan, FreeBalance was brought in to fulfill a fundamental requirement to institute a financial management system and framework that could demonstrate accountability and transparency to donor nations and to the people of the country. The FreeBalance approach in developing nations is to rapidly deliver the fundamental financial management infrastructure tools upon which modern governments can evolve with internationally approved accounting practices and governance principles.

The government of Republic of Korea adopted a centralized procurement system where goods and services, and arranging contracts for construction projects needed by the public organizations should be entrusted to the PPS -- Public Procurement Service, when their value exceeds a certain amount. This procurement process, however, had been considerably complicated before PPS launched a new innovative procurement system. The nation wide web-based system is dealing with the entire procurement process including acquisition of all the information on the procurement projects, procurement request, bids, contracting and payment. This system not only resulted in dramatic reduction of unnecessary paperwork and procedures, but also removed inconveniences and potential corruption due to increased transparency in the public procurement market.

Under the traditional processes, complicated paperwork was required to clearly define responsibilities of the government and suppliers, and to secure legitimacy of the procedures, since the government budget is executed according to contracts with private companies. However, GePS (Government e-Procurement System) provides one-stop procurement service via linkage with procurement-related information held by government agencies, related associations, and institutions. It is aiming to enable procurement participants to handle procurement business over the Internet without physically visiting the public offices.

PPS is expecting the following benefits with GePS. First, public procurement ordering methods of public organizations including bid contents will be fully disclosed on the Internet, which will bring up transparency and efficiency in overall public procurement. Second, by putting all public bidding information on one site (www.g2b.go.kr), anyone can easily find all available bidding information via the Internet with great ease. Third, the payment process will be simplified, and money transfers will be conducted in an electronic way. Also, the volume of documents required for public bid participation will be streamlined to a great extent. Approximately, 27,000 public organizations and 70,000 suppliers are virtually using this system since it has been introduced on September 30, 2002.

A presentation from Bill Dorotinsky, Senior Public Sector Specialist, World Bank, analyzed several Integrated Financial Management Systems (IFIMIS) projects from around the world. Since the late 1980’s, the Bank has funded financial management information system (FMIS) projects as part of larger government reforms or as a stand-alone project in more than 27 countries totaling US $ 1.1 billion. He pointed that the results from international experience with IFMS, including the World Bank’s have been so far quite mixed. Only 21% of the projects managed to improve transparency of their public financial management process, whereas in many other countries the projects have been less than fully successful in combating corruption.

It was noted that FMIS could enhance transparency and accountability in the following ways:

• automated identification of exceptions to normal operations,

• automated cross-referencing of personal or vendor identification numbers for fraud,

• cross-references of asset ownership (e.g. land registry) with tax return entries for local tax payments,

• cross-references of asset ownership (e.g. land registry) with tax return entries for local tax payments, identifying scofflaws.

• cross-reference public benefit payments with both birth and death records or a national identification number to identify fraud,

• strengthening cash disbursement rules to minimize risk of theft of public funds,

Clearly, such systems can generate a lot of useful analysis. The question is whether there are any incentives to use the information. The system assumes that corruption is detectable, systems are in place to pursue remedial action where cases of actual corruption have been identified, and it assumes institutional incentives will favour accurate data entry.

Absence of a single taxpayer identification number can also be problematic. In Argentina, there were numerous national identifiers, each covering different segments of the population, each with a legacy system unable to easily communicate with one another.

With respect to remedial action, it is a great assumption that the justice system in a country is working well enough to follow-up on identified cases of fraud, waste or abuse. There needs to be trained investigators who can take the initial suspicions and confirm or deny them and subsequently refer for prosecution (and an incentive to do so, in the face of local power elite). There is also need for executive branch officials willing to allow detection and referral for prosecution, and courts willing and able to hold timely, fair trials, etc.

The presentation emphasised the risks for new corruption opportunities through the ICT-based financial management system by monopolising information access and wielding control in a few hands.

In another session on e-society and beyond, Clay Wescott of the Asian Development Bank made a general presentation on E-Government, quoting several examples where web sites had been used effectively for advocating a particular cause. He outlined the plans of the ADB to set up an E-Government Centre in Manila, which will showcase different software solutions for generic applications such as e-procurement. In another presentation the success of the OPEN system implemented by the Seoul Municipality was highlighted and efforts by the UNDP to promote its use in other countries were recounted. Although the speakers and participants emphasised the limited role of technology in the success of E-Government projects, they were equally willing to buy the idea that software solutions can be easily adapted from one country to another. There could be no better evidence of the seductive power of information technology.

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