Information Technology, Public Policy and Canadian Governance:Partnerships and Predicaments

1. Introduction

2. IT, Governance & Government

3. IT in Canadian Government

4. Immediate Challenges & Future Scenarios

5. Conclusion

By:Gilles Paquet and Jeffrey Roy

{Forthcoming Chapter inHandbook of Public Information Systems, Dekker Publications}

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ABSTRACT

This chapter examines the strategic and political context shaping the role of information technology(IT) in Canadian government. We explore different dimensions to the link between IT and publicadministration, drawing on both the rising interest in the new public management (NPM) and newgovernance models based on a re-configuration of traditional organizational architectures, private orpublic, in which information technologies play a determinant role. Our underlying purpose, however,is first to expose the main political and bureaucratic forces that have shaped the adaptation andimplementation of IT in the Canadian state - and secondly, to review the Canadian public sector's mainactions to date on these fronts.

The resulting trends, in Canada and elsewhere, point to both new partnerships and predicaments. Onthe former, the growing importance of IT, and their solution providers, as well as the pressures formulti-stakeholder solutions in response to the information age, mean that private-public collaborationis increasingly common. Accordingly, the effectiveness of this collaboration is a key determinant inthe adoption and deployment of IT within the public sector, as well as the forging of new governancemodels, hybrids of private and public actors. The resulting predicaments stem from the pressures ongovernments to embrace models of NPM, implying organizational innovation; but these pressures, inturn, mean that traditional controls and decision-making processes are no longer relevant. In manycases they become blockages. Thus, a primary purpose of this chapter, in reviewing Canadiangovernment action, is to consider the different degrees of change and adaption created by IT as anenabling agent.

Within the Canadian context, the main findings of this chapter can be summarized in the followingmanner: i) new information and communication technologies are inspiring radical changes totraditional governance models in all sectors; ii) notwithstanding the specificities of government, IT-driven reforms, within a NPM context imply a strong need to rethink traditional, Westminster-style,parliamentary systems of accountability, control and delivery; iii) despite growing resourceallocations, the Canadian experience illustrates resistance to change, and an under-utilization of newtechnological capacities; and iv) critical events and emerging challenges in the future, such as the Year2000 computer crisis and virtual governance, imply that this gradual and cautious path is notsustainable.

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"Large Organizations do not change easily and usually do only when there is a crisis and the risks anddangers of not changing outweigh those of changing."

{Governor's Task Force on Government Technology and Procurement, State of California - 1996}

1. Introduction

This chapter examines the strategic and political context shaping the role of information technology(IT) in Canadian government. We explore different dimensions to the link between IT and publicadministration, drawing on both the rising interest in the new public management (NPM) and newgovernance models based on a re-configuration of traditional organizational architectures, private orpublic, in which information technologies play a determinant role. Our underlying purpose, however,is first to expose the main political and bureaucratic forces that have shaped the adaptation andimplementation of IT in the Canadian state - and secondly, to review the Canadian public sector's mainactions to date on these fronts.

The resulting trends, in Canada and elsewhere, point to both new partnerships and predicaments. Onthe former, the growing importance of IT, and their solution providers, as well as the pressures formulti-stakeholder solutions in response to the information age, mean that private-public collaborationis increasingly common. Accordingly, the effectiveness of this collaboration is a key determinant inthe adoption and deployment of IT within the public sector, as well as the forging of new governancemodels, hybrids of private and public actors. The resulting predicaments stem from the pressures ongovernments to embrace models of NPM, implying organizational innovation; but these pressures, inturn, mean that traditional controls and decision-making processes are no longer relevant. In manycases they become blockages. Thus, a primary purpose of this chapter, in reviewing Canadiangovernment action, is to consider the different degrees of change and adaption created by IT as anenabling agent.

Section two discusses the connectivity between IT, governance and government: IT deployment, asa means of innovation in governance within the public sector cannot be understood without anunderstanding of the idiosyncrasies of governmental operations and their democratic accountabilities.Section three applies this discussion to the Canadian context, and draws form comparativeperspectives to consider recent experimentations in NPM and IT-related reform. Section four thenlooks forward, to the most likely scenarios for IT-deployment within the present socio-economic andpolitical environment.

2. IT, Governance & Government

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The combined effects of globalization, the dematerialization of economic activity, the acceleration oftechnological and social change, and the emergence of new distributed forms of governance based onprivate-public-civic collaboration have led to new demands on government [Paquet 1997a]. And yetat the same time, resources allocated to the public sector have diminished across all industrializedcountries. Consequently, government is required to do more with less, while learning to thingsdramatically differently as well: it must re-invent itself to meet these heightened demands of citizensand the complexity of changing policy, technological and governance challenges.

Re-inventing government has therefore meant a variety of transformations organizationally, and in itsgovernance arrangements relative to private and social partners; underpinning them is a more intensiveuse of new information technologies which has led to new dynamics and new models of decision-making and service delivery. The rise of such models has meant that it is often not clear who is in thedriver's seat, as power is both shared and dispersed in new patterns. Public management has thus beentransformed over the past decade, and such changes continue today with new information technologiesserving as a key variable in these trends.

In one sense, public sector innovation is closely linked to that of the private sector; and IT greatlyfacilitates such a link. First, globalization and the growth and expansion of market-based activity haveplaced tremendous pressures on companies to develop post-bureaucratic structures and learning-driven systems of governance: such models, in turn, serve as reference points for public sector reformefforts as well. Secondly, IT-based governance systems often involves closely-aligned efforts ofsolutions experts based in the private sector: the result is an acceleration of private-public sectorcollaboration in IT-based infrastructure and usage. Thirdly, government itself is being called upon toarticulate and defend the public interest in the new world of information, knowledge and technologicalchange.

A challenge for IT adaptation in government in that many models of IT and organizational innovationdo not readily distinguish between private and public sector actors - both are sets of large andcomplex organizations destined to be growing users of IT in a variety of ways. Such a view isincomplete however, as there is a need for an appreciation of government and its uniqueness, and thereasons for which the deployment of IT in the public sphere may present a different set of choices,opportunities and constraints than in the private domain. The lack of appreciation of such differencesis often an important limitation in the relevance of many IT experts and solution-providers, whenexamining and working within government: but they nonetheless provide utility in forging new pathsof integrative IT-based governance, albeit incomplete unless properly conceptualized within the publicsector.

In terms of organizational directions today, there is little question that IT represents "the newinfrastructure" of large organizations" [Weill and Broadbent 1998], irrespective of their sectoralsetting or purpose. In assessing a variety of such organizations, these authors propose the followinggrid to underscore the different dimensions to IT-driven organizational processes as four separatetypes of objectives:

Organizations invest in information technology to achieve four fundamentally differentmanagement objectives: transactional, infrastructure, informational and strategic.

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These management objectives then lead to informational, transactional, infrastructureand strategic systems, which make up the information technology investment portfolio.

Infrastructure capability includes both the technical and the managerial expertiserequired to provide basic and reliable services. Transactional information technologyprocesses and automates the basic, repetitive transactions of the organization.Informational technology provides the information for managing and controlling theorganization. Strategic technology investments are made to improve competitive (orperformance) advantage [pg. 14, 1998].

While their perspective is useful in highlighting the strategic components underpinning the usage ofIT, more must be said on the cultural dynamics of both "Information Technology and OrganizationalTransformation" [Gallier and Baets 1998]. These latter authors suggest that the interaction of IT andorganizational governance comes about from the interdependence of four sets of forces: i) informationtechnology; ii) organizational behaviour; iii) cognitive psychology; and iv) corporate strategy [Galliersand Betz 1998]. The necessity of a complementary culture underscores capacities of a different nature- in particular, the central roles of ongoing learning and adaptation. Importantly, such learningcapacities do not come about purely from the managing of internal processes but rather from a properembedding of an organization into its socio-economic and technological environment, and an effectivelinking of internal resources and processes with their outside counterparts. For government inparticular, this type of integrative alignment is fundamental to sustaining capacities for dynamicefficiencies at the core of organizational innovation and renewal.

Without a complementing focus on culture for example, IT systems and their management become littlemore than examples of linear or static reform, of both the retooling and restructuring variety:"outsourcing" is a case in point, as the core organization does not fundamentally alter its purpose orethos but rather it reconfigures one component of its architecture (usually in the name of costs andefficiency). To move beyond outsourcing, for example to blur intranets into integrated models ofbusiness partnerships between stakeholders [Roth 1998] requires as much cultural change as it doestechnical design; the same points are made with respect to government's experimentation with IT andnew models linking to private sector partners [OECD 1998].

Cultural transformations within a public sector context are often particularly challenging, servingnonetheless as the cornerstone of the new public management, and the search for a new ethos capableof reconciling the narrow 1980's focus on the "improving business of government" with a dueconsideration of the "wicked problems" requiring continual redefinitions of the public interest and newforms of public leadership in designing this type of cognitive agenda [Paquet 1992; Jervis andRichards 1997]. These cultural capacities include both new competencies individually and growingconnectivity collectively. The new inter-personal competencies required of individuals within a NPM-based culture as well-known, if not easily-realized: in sum, they reflect the challenge of public sectormanagers shifting from traditional models of vertical control towards alternative models withtransversal patterns of accountability and performance-driven approaches to public management[Paquet 1996; Jervis and Richards 1997]. Yet the technical competencies associated with such shiftsoften remain profoundly under-addressed, as senior public servants and politicians often remain

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largely ignorant of the technological capacities for organizational innovation and transformation.

While this finding is common to IT management in all large organizations [Weill and Broadband 1998]is particularly prevalent in the public sector where tradition, security and scrutiny have often reducedthe pace of adaption and change. As an example, if one considers the recent rise of e-commerce andits implications for digital governance, it is commonplace to find private sector leaders writing,articulating their visions of this new order and the required competencies [Tapscott 1998; Papows1998]. By comparison, public sector leaders often seem reactionary, paying attention to a new rhetoricof service delivery and citizen engagement but with a significant disconnect to the underpinningtechnologies facilitating such shifts. Related to these new competencies crucial to the emerging digitalculture is a sense and practise of connectivity. This term may be applied both within and outside ofgovernment, as well as the integration of the two. Connectivity within the state recognizes thathorizontal issues and decision-making networks are no longer fashionable - rather they are the normin defining the essence of a relevant public sector. External connectivity is similarly about the patternsof interaction between state, market and societal-based actors, or the co-evolution of all three withinprocesses of multi-stakeholder governance [Paquet and Roy 1998].

Three degrees of IT deployment:

The preceding discussion highlights the extent to which many dimensions of governance shape theextent to which IT will be effectively adopted, and adapted to contribute positively to anorganization’s objectives and development. We will synthesize these dimensions, and present themas three separate degrees of deployment - each of which represents a different level of embracementtowards integrating IT into the purpose and design of the organizational architecture of government:i) reframing - a transformation of the vision and purpose of an organizational entity; ii) restructuring -a modification of the sets of roles and relations amongst individuals and organizational subunits inorder to better realize this vision; and iii) retooling - a refurbishment of the instruments or techniquesin good currency, within the parameters of the other two components.

Reframing connotes a change in the vision which underpins the broad parameters of purpose anddevelopment: with respect to the state, it connotes a new definition of how a socio-economy functions,and governments overall purpose, goals and priorities. After an era of mega-corporations, private andpublic, reframing may entail, for instance, a view of decision-making emanating from smallerenterprises and horizontal networking; similar shifts occur in technological realms such as mainframesystems to personal computers, and information infrastructure to internet access. Today's governmentsare beginning to recognize the advent of virtual governance, as IT-facilitated social movements indirect access and democracy, and electronic commerce intensify pressures to fundamentally rethinkthe role and purpose of government in an information age. Within the context of the precedingframeworks, the reframing process is both strategic and cognitive in its attempt to integrate structuraland cultural transformation of an organization.

Reframing calls into question purpose, before designing or aligning organizational elements in newways. In the case of government and IT, there may be fundamental questions about the overall role ofthe state in an information age, and whether or note democratic systems should be viewed asrepresentational or direct (as many suggest IT facilitates shift to the latter). While we explore potential

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forces suggesting a reframing of government in light of such new realities, suffice to say for the momentthat governments are often reluctant to embrace such wholesale moves in the absence of significantshocks to their organizational systems.

Restructuring connotes a change in the blueprint of the systems of governance that provide the steeringand managing mechanisms for the public sector to organize its resources. As a case in point, such ashift might entail a modification in the broad responsibilities of major governmental actors, or a re-alignment of power in areas such as federal-provincial relations, the role of local governments andcommunities, and the structures and responsibilities of business and social groups in tackling newsocio-economic, political and technological realities. In Weill and Broadbent’s terminology,restructuring may involve elements of informational and architectural design in deploying IT, but takenalone it is unlikely

An example of potential restructuring at the federal level is the government's 1994 "Blueprint forRenewing Government Services Using Information Technology" which aimed to rethink decision-making processes and power relations both within and external to traditional governmental structures.On the one hand, government, with this blueprint, implies that IT allows horizontal relationshipsbetween citizens, stakeholders and decision-makers, and that individuals should now enjoy almosttotal access to informational flows of their governments, while on the other hand, such blueprints forreform are carried out - and carefully managed within traditionally conservative and centralizedpolitical accountabilities that are often resistant to radical innovation. Without reframing then,restructuring is an incomplete or partial degree of change; it is not irrelevant however, for asgovernments embrace a broader interest in new models of decision-making and service delivery, areliance on the status quo is no longer sustainable. IT-induced restructuring, for example, has resultedin government becoming a huge purchaser of hardware, software and integrative solutions from privatevendors, gradually but steadily fostering new linkages and inter-relationships between them. Retooling connotes a change in the range of policy instruments and specific policy initiatives aimedat specific goals within the parameters of the first two components - such as a shift from traditionaleconomic regulation of domestic markets to new forms of negotiated protocols and virtual forms ofsecurity in order to underpin electronic data interchange (EDI) and exchange. Much of the deploymentover the past decades of information systems (IS) has been largely in the name of retooling, to store,process and manage information resources in an era of growing and increasingly complexorganizational tasks. Such a direction fits well with the notion of “transactional”objectives, where themain goal is to realize efficiency improvements within existing governance systems and decision-making processes.

The current digital transformation, led by information and communication technologies, permeates allthree architectural elements. The widening challenges of both electronic democracy and governanceinsists on a reframing of the public interest and the role of the state [Alexander and Pal 1997].Similarly, a restructuring of the boundaries and interactions between business, government and societybecomes inevitable, as well as desirable: and the resulting public sector retooling must follow, asgovernments reject traditional forms if intervention with new types interactions (and in doing so,information is the new critical resource).

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Yet the main challenge facing governments, and we will explore the specifics of the Canadianexperience, stems from the interdependence of these three dimensions. As it is often recognized thatlarge organizations are resistant to change, there would thus be an over-reliance on retooling, andperhaps some restructuring, while avoiding more fundamental questions of reframing. This point is ourworking hypothesis for governments in general, although we aim to show that in comparison toexperiences elsewhere, the Canadian federal government’s difficulties with IT stem from such anarrow focus an interest on the nexus between IT, government and governance.

3. IT in Canadian Government

How have Canadian governments fared in this new context, in terms of understanding, adopting andimplementing new IT-based tools, models and strategies? While the answer is complex, in large partdue to provincial variations, Canada ranks as a laggard in many aspects of IT management andinnovativeness. We begin this section with a comparative look at the nexus between IT and the newpublic management (NPM), focussing mainly on other Westminster models of parliamentarygovernment; we then shift to the recent Canadian perspective on this front.

3.1 International Trends

Internationally, IT and virtual forms of governance are growing as a key strategic element in effortsto rethink government's purpose and structure [Nelson 1998]. Many countries have engaged in effortsto introduce new models of public sector management, in large part to respond to the fiscal pressuresof globalization with more efficient operations (retooling), to reposition government's functional rolesand collaborate both more often and more effectively with business and third sector organizations(restructuring), and most radically to rethink fundamentally the role of the state, and the nature of thepublic interest at the end of this century (reframing). Within OECD countries, although it is rare to findcountries that have undertaken genuine efforts on all three fronts, the degree of experimentation doesvary greatly across jurisdictions [OECD 1997].

For Canada, important comparative reference points for public sector innovations are those countrieswith Commonwealth-based Westminster traditions of parliamentary government such as New Zealand,The United Kingdom and Australia. For example, the radical NPM reforms in New Zealand throughoutthe 1980s ushered in a significant era of organizational innovation, based, in large part on moreambitious private-public partnerships [Mascarenhas 1993; Boston and al. 1996]. New Zealand'spublic management reforms have been path-leaders in alternative accountability and performancemanagement systems, accelerating the importance of managerial flexibility and IT-based reform inthese processes [Boston, Martin, Pallot and Walsh 1996; McDonald and Anderson 1998]. The NewZealand case involves a uniquely significant mix of restructuring and retooling, the origins of whichare partly found in the public sector's fiscal crisis of the 1980s which served as a clear impetus forchange. New Zealand's IT deployment is largely decentralized, based on a degree of autonomy topublic agencies which has resulted in significantly greater improvement in IT project management,relative to international findings [New Zealand IT Stocktake 1997].

Australia's own action in IT-based public sector reform have also accelerated this decade, albeit at

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a more gradual pace than their neighbours. In an example perhaps closest to at least a carefulacknowledgement of reframing possibilities, the Australian Office for Government Online (OGO) isunique in its horizontal authority across the federal government, as well as its formalized linkages tostate-level administrations. OGO's mandate is ambitious and far-reaching, responsible not only forexamining how Australia will evolve as a model-user of IT in facilitating new models of onlinedemocracy and public administration, but also in its high-level support in putting forth new strategiesfor public sector reform in the face of virtual governance challenges such as electronic commerce.

In a recent international study of IT procurement models, the Australian approach to framework or"one-for-all contracting" is viewed as an innovative means to restructuring the IT-procurementprocess, both to improve efficiencies (retooling) and foster more effective relations between privatevendors and public buyers. Similarly, initiatives in The U.K., evolving from the Private FinancingInitiative (PFI) to Private-Public Partnership (PPP), reflect attempts to overcome traditionalcentralizing controls in IT management which traditionally plague public sector performance[MacDonald 1997].

This procurement sensitivity is rooted, however, in earlier traditions of NPM experimentationthroughout the 1980s emphasizing public-private connectivity. Under the new Labour government, thistrend has been maintained: private partners are now key stakeholders in a variety of key agenda areassuch as public transportation and employment services. The ambitious outsourcing of Inland Revenue'sentire infrastructure of IT services, an arrangement based on shared accountability and performance-based contracts is illuminating: in order to realize the partnership, the British government agreed toa ten year contract with a large private sector provider which included provisions linking objectivesand compensation, sharing financial risks and operational planning, and collaborating in a manner farremoved from traditional business-government partnerships [Jayes 1998]. Moreover, in terms of atleast opening the door to more ambitious reframing efforts, the Central IT Unit in the Cabinet Officeacts as a focal point for more strategic reviews of IT deployment in the British public service.

Research from these countries can be summarized along the following lines: there is little in the wayof internally-driven reframing on the part of governments, although the growing interest in IF and theknowledge and information age more generally suggest that pressures for fundamental change arebuilding; restructuring varies across countries, but the recent shifts towards NPM has createdopportunities for new innovations and IT penetration; and a good deal of the IT investment bygovernments has been in the direction of retooling. This type of assessment, implying a narrowcompartmentalization of IT as information systems management, and a largely efficiency-orientedplane has been shown to be typical of central governments in the countries reviewed here [Bellamyand Taylor 1994]. 3.2 The Canadian Scene

The Canadian case is not a radical departure from the preceding trends: in fact, the federalgovernment, the largest spender on IT at approximately $4 Billion annually can be viewed as laggardon the continuum of experimentation linking IT and NPM. In sum, the massive expansion of theCanadian state in the post-war decades, through to the mid-1980s was underpinned by IT investmentslargely retooling in nature: mainframe computer systems fit the linear, bureaucratic models of policy-

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making and service delivery, and within these parameters IT was largely viewed as infrastructural ortransactional investments, to refer to the language of Weill and Broadbent.

This characterization is consistent with broader public sector research findings [Bellamy and Taylor1994]. The purchasing of such equipment was carefully and centrally orchestrated by a centralDepartment of Public Works, and through the financial and administrative controls of Treasury Board,a key central agency. Until quite recently, IT in the federal public service might be viewed as retoolingwith a vengeance; and perhaps not surprisingly then, the cost-benefit reportings of IT deployment, interms of strategic gains to performance have been dismal [Globerman and Vining 1996; MacDonald1997].

During the 1990s, in part due to a growing awareness of the international trends reviewed above, andin larger part due to fiscal pressures on the state, a more ambitious view of IT has begun to peculate,with some signs of restructuring-style reforms. We will make the case, however, that such effortsremain timid, and constrained by a variety of factors, and that some form of shock, presently unforseen,is likely required before the federal government enters the more ambitious ground betweenrestructuring and retooling.

To help justify this depiction, we base our analysis on a number of critical initiatives - recent to thefederal government, but also impacting provincial and local governments as well. The following listof initiatives will be considered: Program Review (PR); Alternative Service Delivery (ASD);Benefit-Driven Procurement (BDP); Year 2000 Bug (Y2K); and Public Key Infrastructure (PKI).

Importantly, the first three sub-variables, or initiatives have already seen fruition, whereas the latterelements are very much works-in-progress, meaning while their impact is presently being felt the mainconsequences have yet to fully materialize. The findings presented below will make the case that withrespect to IT-based innovations and reform, the first three variables have also represented little morethan "retooling", rendering the fourth and fifth variables as potential sources for a more profound IT-usage that would necessitate equal doses of restructuring and reframing.

a) fiscally-induced retooling:

The federal government's 1994 Program Review presented a rare opportunity in Canadian governanceto launch a discourse on the shape, size and purpose of government in a knowledge-based andglobalizing society. In this regard, however, the lack of attention accorded to new informationtechnologies and more ambitious experiments with private-public sector collaboration is indicativeof the flavour of our assessment.

The PR initiative did mark a radical departure from what had been promised by a Liberal governmentupon its election in 1993. To adopt a synthesized presentation, PR was to re-examine everything aboutgovernment and determine a revised focus and set of activities based on the following questions,which were applied to all government departments and programs: can it be devolved (to provincesand/or municipalities); can it be privatized (to business); can it be partnered (with business or 3rdsector groups); and can we afford it? Notwithstanding ongoing debates, there is a growing recognitiontoday that the latter question, magnified by a sharply-deteriorating fiscal situation proved the pivotal

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element to the PR exercise. In short, government would get smaller via spending reductions facilitated,when feasible, by devolutionary or partnership arrangements.

Within the PR content grew the interest in, and attention accorded to ASD. A fair assessment of theASD fixation federally is to say that given more radical experimentation in public sector reform bothabroad and subnationally, the federal government, spurred on by its own PR questions felt obliged tostudy ASD and develop a government-wide framework on its usage and relevance. The fact that theASD doctrine is closely-guarded within Treasury Board (TB), the central agency solely responsiblefor rules of efficient and effective spending is testament to the limited sphere of influence of this newparadigm. In fact, notwithstanding some interesting case studies federally in terms of service delivery,and some equally-limited transfer of powers to the provinces, ASD has not resulted in any fundamentaldeparture from traditional ways of doing things for the federal government and its operations [Paquet1997 in Ford and Zussman 1997].

A significant victim of this timid guarded approach is IT management and reform. At the time of PRand ASD there was growing disenchantment internally with the federal government's procurement,deployment and management of IT resources, and a rising frustration externally among private sectorsolutions-providers that the pace of innovation in Canada was stifled, relative to other countries. Theresult of these pressures, disconnected from PR and ASD, was a federal task force on procurementand the adoption of a new framework for IT management and procurement (BDP). Benefits-drivenprocurement, in theory, is meant to break free from a narrow emphasis on cost in selecting IT solutionsand partners, in an effort to focus on outcomes, sharing of risk and accountability and value-added forall parties [Mornan 1998]. In practise, the procedures and guidelines around BDP, again administeredby TB, casts doubts on any real potential for creativity and innovation [Macdonald.1997; Easton1998]. The paradox of this situation is the substantial amounts of IT-spending in Canadian government(as elsewhere). This spending, largely in the name of efficiency (or transactional or informational inWeill's framework) amounts to little more than a retooling of how government operates, particularlyfederally, in Canada.

b) bottom-up restructuring:

A indictment of federal laggardness in IT-experimentation is the lack of flagship examples to report,relative to often-invoked examples from abroad such as Inland Revenue in The U.K., Centrelink, thenew integrated initiative for employment and social services in Australia or Auditing Services in NewZealand: in these examples (and others) there is genuine evidence of shared forms of accountabilitythrough joint-planning, flexible delivery mechanisms and performance-based contracting [OECD1998]. Each initiative is an example of joint decision-making between a federal government and someof the largest IT service providers in the public sector. Nonetheless, the Canadian experience mayunderline provincial and municipal levels as the most promising in terms of experimentation, but byand large such partnerships have been pursued cautiously and without significant reform.

The usage and deployment of IT varies greatly across Canadian provinces, in large part reflective ofthe diversity of geographic size and populations across provincial jurisdictions. Yet for a variety ofreasons, stemming from greater proximities and reduced bureaucracies, the provincial governmentshave been leading the effort in championing NPM [Borins and Kocovski 1997] and IT usage and its

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into integration into management and governance systems may well exhibit the same bottom-uptendencies of most recent public sector reform movements [Osborne and Gaebler 1992]. For example,in the 1980s New Brunswick, located in Atlantic Canada emerged as a leader in the public sectorpromotion of a digital, telecommunications infrastructure: they became the first province to developa fully-wired capacity for broadband communications and digital carrying capacities, an outcomerealized through close private-public collaboration and the creation of new government agencies,separated from traditional government departments.

Most recently, the radically-aggressive actions of the Ontario government, and its determination toachieve its 1995 electoral promise if a 30 per cent income tax reduction has led to significantopportunities for IT-based experimentation. The Ontario experience underscores the importance ofpolitics and ideology. On the one hand, the usage of IT to facilitate welfare reform (a workfare-styleshift to OntarioWorks in Ontario) is not unique to Conservative governments: the Labour governmentin The U.K. views IT as a significant component of its own reforms to the welfare state, and its ownrejection or traditional, entitlement-based social policy.

Ontario's recent moves, in line with international trends, demonstrate that IT pervades many policyfields with respect to governance and service delivery. For example, a new IT application underpinsthe province's first automated-billing transportation highway for motorists, itself a private-publicfinancing scheme; the Ontario Business Connects program has fully automated business licenseprocessing across the province; and a major initiative in the provincial Justice system is electronicallylinking two provincial ministries of 22,000 public servants with an alliance of four Canadiancompanies to provide direct access to information for police, judicial staff, correctional services andthe genera public.

Both the British and Ontario experiences are joined by the fact that an electoral shock seems to haveserved as an important impetus for public sector innovation: Margaret Thatcher in 1979, and MikeHarris in 1995 both ushered in new waves of reform to public sector operations, fiscally-driven at theoutset with the potential for legacies to extend into strategic and operational domains as well.Recently, the Ontario government announced bold plans to rethink and prioritize IT usage across theprovincial government, a step which has resulted in a reversal of its more traditional views to pubicservants (for example, the changes mean huge increases for technical staff, changes that could see theprovincial CIO earn twice as much as the Premier).

Thus, the Canadian experience may well be reflective of a broader trend in federalist-jurisdictions.In multi-level states such as Canada, the United States, or Australis, the most innovativeexperimentations with IT-based collaboration and organizational innovation have been subnational;national governments, in these jurisdictions are almost always followers rather than catalysts. TheBritish and New Zealand contexts are both examples of more radically-reformed central governments,but this point must be weighed against their near-monopolistic rule with respect to the public sectordomain.

The Australian example, OGO, presents the hypothesis that an important opportunity for federalistcountries may be the link (or the development of one) between IT-based governance and federal-provincial relations (to adopt the Canadian context). A common complaint of private sector providers

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(again in Canada) is that "the feds have the spending dollars", whereas "the provinces have controlon implementation and design". Thus, a significant opportunity for new IT solutions, and theirproviders, may well lie in the designing new forms of coordination and collaboration between levelsof government. A useful model in this regard is the Australian federation, significantly advanced interms of cooperative mechanisms for both public investment an policy-making, including the area ofIT. The Australian OGO formalizes linkages to state governments to coordinate experiments inelectronic government (while the communicative and collaborative linkages themselves are facilitatedby IT).

The Canadian federal government has made more recent, and characteristically cautious overtones inthe direction of restructuring. The 1995 "Blueprint for Renewing Government Services usingInformation Technology" is significant for its recognition of the need for an integrative look at ITdeployment from multiple vantage points, In fact, the rhetoric cuts across all three levels change,suggesting an interest in simultaneous restructuring, retooling and to a lesser extent, reframing. Keycomponents of this "renewal" include: a focus on client services; an emphasis in new cultures andempowerment; flexible and partnership-based decision-making structures; and an emphasis onstrategic results by shifting past the traditional, infra structural and transactional focus of governmentin the past.

Accordingly, from the blueprint emerged a new CIO Branch (Chief Information Officer) to takeownership of coordinating and integrating such efforts across the federal apparatus. The role of theCIO includes: providing leadership, coordination and broad direction in the use of IT; facilitatingenterprise-wide solutions to horizontal IT issues; and serving as technology strategist and expertadvisor to Treasury Board Ministers and senior officials across government.

The latter phrase, "Treasury Board Ministers" is the first bureaucratic hint of limitations however. Thestrategy, and the CIO Branch itself operates within the strict confines of Treasury Board, the centralagency serving as the traditional guardian of administrative managerial practises across government,whose basic mission must be oriented towards efficiency and prudence. Unlike countries elsewhere,this model is unlikely to be conducive to realizing meaningful restructuring initiatives, to say nothingof the more strategic opportunities of reframing.

c) reluctant reframing:

To join the most optimistic scenarios on new public management with the least, we could postulatethat at best, innovation is a bottom-up process most likely to occur in localized settings; and at worst,national governments rarely undertake significant departures from the traditions the past unlessspurred by either a shock or crisis of one sort or another. Already, in terms of such shocks we havepointed to the fiscally-induced variety, resulting in a forced rethinking of the nature of the state (andthe degree of this rethinking correlates with the level of acuteness of the fiscal crisis). Aside fromfiscalism though, are there other sources of change, events or processes likely to serve as an impetusfor reform?

There is now a potential crisis in the short-term - the technologically-based Year 2000 computer bug,

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and its potential ramifications. With respect to Y2K, while it is clear that governments around theworld are taking seriously the potential for problems, the extent to which problems may ariserepresents a significant unknown. Governments are thus forced to spend hundreds of millions ofdollars to defend the integrity of their computer systems, underpinning much of how the public sectoroperates today. While the ultimate impact will reveal itself on January 01, 2000 what is already clearis that private sector IT-carriers are penetrating the public sector's decision-making systems to anever-accelerating degree: our hypothesis, then, is that 1999, a year that will increasingly be viewedas a crisis-response state, may well present a transition of sorts ushering in accelerating efforts atprivate-public sector collaboration, and resulting in a significant re-configuration of the roles andimportance of private sector across in public sector operations.

The extent to which Y2K delivers significant problems may well be secondary (barring majordisasters). If significant problems arise, private sector agents will be called upon to play an urgentrole in addressing the effects; if the crisis is largely alleviated, then private companies, participatingat the highest levels of decision-making authority in the public sector, may well benefit from a renewedlevel of credibility and confidence. At the same time, the entire phase of Y2K preparation has meanta significant degree of systems upgrading and replacements, further increasing the operational andstrategic rules of private partners in public activities. In sum, one may thus expect that the early daysof 2000 will prove determinant; and they could potentially mark an acceleration of private-publicsector interaction in IT management.

Along with this (at least partially) speculative, Y2K-induced alteration, the policy and technologicaldiscourse is already pointing to a significant reframing of government's role. The impetus for thischange is the advent of digital. or virtual governance, of which one central component is thegovernment's focus on developing a new Public Key Infrastructure (PKI). Despite the fact that PKI islargely over-shadowed presently by Y2K concerns, its significance cannot be over-estimated. Simplyput, PKI represents the governments efforts to develop an entirely new public infrastructure which iscapable of underpinning an emerging digital order based on electronic commerce, direct orinformation-based democracy and a new associational mix between transacting, consulting,collaborating and deciding. Such capabilities are not in themselves public or private goods in atraditional policy or delivery sense, but rather they represent the foundations of an emerginginfrastructure for electronic forms of exchange in economic, political and social realms. In this sense,e-commerce is shifting the barriers most quickly:

It is no surprise that, in today’s wired world, cryptography is most often applied to thefledging filed of electronic commerce. Despite the remote chances of interception ofconfidential financial information, such as credit card number, many individuals stilldo not trust the security of Web transactions. At this early stage of the medium’sdevelopment, it is crucial to adopt structures that verify that all transactions arebetween legitimate and authentic parties [Kobrin 1998].

PKI's significance will not emerge until after the passing of the millennium uncertainty, but it is notablefor an interest on the part of many governments to embrace it in a pro-active effort to prepare citizensand governments for the digital age. In the Canadian federal government, the development of agovernment-wide PKI strategy is under way; and the province of Ontario has recently partnered with

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Nortel-affiliate Entrust Technologies (a pioneer in PKI) to begin work on an integrated architecture,to be piloted on the Child Protection Fast-Track Information Project & Secure Internet E-mail system.

Though we mention such issues largely in passing, it is important to underscore the possibility of non-technological shocks, leading to a certain degree of reframing. For instance, fiscal shocks are oftenpointed to as important variables in New Zealand’s embracing of new public management principles;in The U.K. case, the political shock that was Margaret Thatcher induced a new phase of public sectorinnovation, the effects from which are still felt today. In Canada, possibilities such as a hypothetical“yes”vote in Quebec - to some form of separation - might galvanize substantial change to the Canadianfederation, and opportunities to redesign governance.

If one were to redraw the public sector architecture today, there is little question that most aspects ofpublic administration and democratic processes would look quite different than the various degreesof incremental changes witnesses to governmental structures historically endowed with tradition,custom and primitive social technologies which limit the penetration of modern information andcommunication technologies. Evidence for this point is provided by the few examples of institutionalfluidity, or invention now under way: transnational forums such as the European Union and WorldTrade Organization, and subnational creations such as the new Scottish Parliament or London Councilin The United Kingdom are likely to exhibit less resistance to new IT-inspired governance models andcoordination mechanisms - as in many cases, they are central to fulfilling their unique mandates.National governments, though large in relative size - and thus IT usage are also the most weighed-down organizations in comparison, requiring shocks of one sort or another to adapt significantly.

4. Immediate Challenges & Future Scenarios

What does the future hold in store for government in Canada? We propose three scenarios for futuredevelopments, each underwritten by a different degree of change; as we shall see, the external contextwithin which governments now find themselves may well determine that the scenarios representinterdependent phases along an unavoidable trajectory (in which case the critical choice is whethergovernment action is pro-active or reactive). In other words, the issue may be less about choosingamongst the three scenarios and more likely continual process and adaption an deployment across eachone. 4.1 Procurement, access & infrastructure (retooling)

In this scenario IT becomes a key agent of experimentation. NPM implies a greater degree ofpartnering between all socio-economic sectors, in order to both plan objectives and deliver servicesin a manner different than the past. In this regard, although some of the biggest examples of suchpartnering are information systems themselves (outsourcing arrangements) IT-based procurementunderpins a growing array of policy fields, from social services to revenue collection. A key successfactor for such arrangements is the extent to which performance objectives are utilized as the basis forselecting partners and shaping the collaboration. Such performance-based management, indicative ofNPM, means getting beyond a traditional, lowest-cost approach (deemed to be in the public interest).Procurement of IT is already significant - in terms of spent resources.

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Yet the approach of the federal government in Canada has been to carefully manage partneringprocesses, with project evaluation and decisions tightly scrutinized by Treasury Board. The recentBDP process is hardly a notable change in course [Easton 1998]; though it has at least providedrecognition of a new rhetoric [Mornan 1997]. In sum, the current lack of political and bureaucraticwill to undertake significant reform means that there are few, if any, federal examples of ambitiousprivate-public partnerships jointly-planned and measured by outcomes, rather than cost and otherfactors carefully construed by government officials

The rise of the internet - and its tremendous penetration of traditionally-closed informationmanagement systems in the public sector is nonetheless significant. In this new environment, onlinegovernment is becoming both fashionable and feasible, and many political parties are nowexperimenting with new technologies to elect their leaders. In such a world, information, and itspackaging grows as a resource, or as a new form of public good: the federal Department of Industryhas created Strategis (strategis.ic.gc.ca) which serves as a cyber-link to a veritable wealth ofknowledge, accessible for consumers, investors, voters, students, entrepreneurs, public servants andthe like. Similarly. the federal government's newly created CIO, perhaps reflecting its infantilepresence within the governmental apparatus has continued to view "infrastructure" as key to electronicgovernment and IT deployment [CIOB 1997/1998].

Nonetheless, retooling is largely reactionary. Governments provide more information to thosedemanding it; new regulations are considered for cyber-issues creating the need for a response, andoften a new competency; and public servants with a technical focus operate in the annals of departmentand agencies, focussed on activities of an informational and transactional variety, to employ Weiss’sterminology once again. Though it consumes a substantial portion of total government spending on IT,the resulting degree of change is often both incremental and expensive; and the machinery ofgovernment, in terms of strategic decision-making processes and fundamental accountabilitymechanisms remain unaltered .

4.2 Critical collaboration (restructuring)

The exception to the preceding characterization, accelerating in importance and potential implications,is Y2K. Irrespective of the outcome of January 01, 2000 what is already clear is that for the first time -particularly in the Canadian scene - senior government officials are taking notice of IT systems andtheir importance. Moreover, private sector service providers find themselves in a situation of relativeempowerment, as the (unmovable) deadline approaches. If disruption is minimal, the private sectorshould benefit from enhanced credibility; and if it is significant, then the same companies will becalled upon as key players in any response.

The net result, perhaps in either direction, is the potential for a greater convergence of the private andpublic interests than has otherwise been the case. The government of Ontario, for instance, has alreadyannounced that in parallel to their own Y2K efforts, there will be a major attempt to examine theimplications of IT across the entire government, perhaps setting the stage for a more genuinelyrestructured state.

In short, Y2K's significance might be summarized along the following lines: i) it represents a huge

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spending allocation of public resources on the upgrading, replacing and coordinating of IT ingovernment; ii) the deadline, and its potential ramifications serve as a unique focal point for senior-level decision-makers in the public sector; and iii) the close private-public collaborations on solvingthis problem may yield important changes to the policy community and its decision-making networks.

4.2 Disintermediated government (reframing)

There are strong reasons to believe that as radically as new technologies, particularly the internet, areredrawing both the borders and boundaries of private sector governance, so to will we witnesssubstantial shifts in the role and operations of the state. While Westminster-style, Parliamentarymodels of representational government have shown remarkable resilience, there is a growing viewthat radical adaptation is already overdue. While the following passage in the American-based WiredMagazine is a pass at national governments generally, our own analysis here underscores itsapplicability to Canada - and in particular the federal government. In referring to what we have termedelsewhere as the "centralized mindset" [Resnick 199?; Paquet 199?; Paquet and Roy 1995] of thecentral government, John Browning points to a mix of apprehension and resistence to a radicalredefinition of national government, preferring instead to engage in futile attempts to re-enforcetraditional lines of power and authority:

This approach is remarkably effective; it has kept the state's influence growing, evenas officials pledge to cut back. But it also doomed. National government is no longerthe best - or even a very good - instrument for delivering fairness. It no longer bringsthe right people to the table to deliver consensus, and lacks the tools to deliver results[January 1998].

Although not within it, there is a growing consensus around the state on the emergence of, and the needfor something very new: what Browning refers to as "disintermediated government" [ibid] is closelyaligned to the "dispersive revolution" [de la Mothe and Paquet 1994] of power away from centralgovernments, and the resulting "distributed governance" [Paquet 1997] among multiple layers ofgovernance from global to local, and networking connections across market, state and societal actors.In short, governments, particularly national ones must learn to share power, to coordinate rather thancommand, and to begin to understand that the need for new forms of a negotiated public interest,intermediating between transnational and subnational forces without pretending to control them.

While many traditional players in government display denial or indifference, the present technologicalrevolution - and its creation of governance based of digital connectivity and virtual communitiesaccelerate. The shift towards a new order of "e-governance" (penetrating political, commercial andsocial spheres) will require a net set of competencies on the part of the state which presently is notthere. At the same time, the providers of the new competencies, in particular the large globalcorporations with the most to gain or lose in realizing this new order, must do much more to"negotiate" this new public interest, through education, coordination and cooperation - even when suchneeds run counter to the more narrow dictates of market forces [Papows 1998]. The present degree of understanding and acceptance within current government is not alwaysencouraging. Politicians and senior public servants are rarely users themselves of leading-edge ITtools, so it does penetrate their strategizing; political leaders in Canada remain fixated with the "Social

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Union" - a modest and long overdue limitation of federal spending powers, while the regulatory agencyresponsible for telecommunications undergoes ridicule in the national media for engineering a modestdebate amongst stakeholders on the role of government with respect to the internet; and the rise ofvoter cynicism and decline of formal participation are each directly correlated with the widening netof online discussions and electronic democracy.

While the "re-invention of government" may well continue to be a bottom-up process, national actionis nonetheless not neutral. One paradox of the information and media age is that despite the declinein direct relevance, national governments remain a focal point for many citizens. Thus, new types ofpolitical and bureaucratic champions are required in the capitals of nations, not to serve as defendersof traditional turf but rather to scope out a new state capable of sensitizing its structures and itscitizenry to the possibilities of new technology. What is more likely, however, is a more turbulent pathmarked by crises of one sort or another, forcing politicians, or voters to react accordingly. Y2K maybe one such crisis - or critical turning point, but it is unlikely to be the last.

5. Conclusion

This chapter has explored the rising importance attached to IT in government, as governance modelsin all sectors and at all levels witnesses dramatic change. Retooling in government is not new, aslarge, national governments in particular spend billions of dollars annually to maintain and upgradetheir information systems. A more fundamental restructuring of the public sector through, along withother factors, IT deployment is now under way in many countries, often resulting in new models ofshared, public-private accountabilities in contracting and outsourcing, performance management andservice delivery; similarly the growing interest in connectivity amongst citizens and new communitiesof users (Britain’s online forum is typical of a growing trend towards virtual discussions and calls fordirect participation: www.democracy.org.uk) intensifies the pressure on government to adapt itsmanagerial and governance systems, historically-rooted in pre-industrial era traditions. The signs,then, pointing towards a fundamental reframing of the state's role in an information age areunmistakable, though governments are not inherently leaders in these directions.

Within the Canadian context, the main findings of this chapter can be summarized in the followingmanner: i) new information and communication technologies are inspiring radical changes totraditional governance models in all sectors; ii) notwithstanding the specificities of government, IT-driven reforms, within a NPM context imply a strong need to rethink traditional, Westminster-style,parliamentary systems of accountability, control and delivery; iii) despite growing resourceallocations, the Canadian experience illustrates resistance to change, and an under-utilization of newtechnological capacities; and iv) critical events and emerging challenges in the future, such as the Year2000 computer crisis and virtual governance, imply that this gradual and cautious path is notsustainable.

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