The myth vs. the facts
There is a general bias against the public sector which has accelerated since the 1980s. We see shifts in public service provision from large bureaucracies towards contracting with many small non-profit and private sector providers despite potential economies of scale.1 During this time period we also have the advent and growth of “new public management”, whose core tenet is that public managers should use markets and organizations that operate in competitive markets.2 This type of thinking and attitude has affected most aspects of government information and communication technology (ICT) implementation and management and at all levels of government.3 Thus, governments contract out most aspects of ICT. With each new wave of technology, the myth that government is late to adopt new ICT or innovate grows.
While there are numerous studies that look at adoption and innovation within government, few have compared this process across sectors. Surprisingly, the studies that compare the spread of new ICT across comparable government and private organizations yield the opposite results. Government organizations more rapidly introduce new ICT; more importantly, they develop standards and rules for its use. My earlier work with Dennis Wittmer found that government organizations demonstrated greater penetration of personal computers than business firms, and also suggested that this might have also been true for the earlier spread of large computers 20 years earlier.4 This article developed some powerful explanations for this outcome, including work enhancement incentives (e.g. PCs as side payments to managers) and greater demand for information management. Private sector organizations with high demand for information management (e.g. financial service, insurance firms etc.) were those most like government organizations with regard to penetration of PCs.
Since the acceptance and use of PCs, many other ICTs have emerged. Most recently, social media applications have moved from individual use to ICT tools for organizational management. Ines Mergel and I provide a powerful framework for mapping the diffusion of social media technologies through organizations, and we find that the process mirrors the diffusion of PCs in the 1980s.5 A 2015 survey of over 3000 workers across private, public, and non-profit sectors conducted by the Center for Organizational Research and Design at Arizona State University further suggests that governments lead private sector firms in adoption and diffusion of new ICT. Asked whether their organization made formal use of social media, 55% of those working in private firms and 59% among respondents from government organizations answered in the affirmative.
Government leads the private sector because it is driven by internal demand and is facilitated by the design of its organization. Governments at all levels are information intensive (demand for ICT), and large (adequate absorptive capacity for ICT).
Often the information is about citizens, and while some have argued that citizens are like customers, this is on its face incorrect. The relationship between a citizen and its government is not voluntary and is not constantly re-negotiated in the way markets mediate customers and business. Governments can exercise coercive authority in that relationship. People don’t pay their taxes because of customer service quality!
A related issue is that nature of privacy in this relationship is different. It is not surprising that private firms want contracts for public services since customers would have no alternatives and are subject to a government’s coercive authority. In effect, they don’t have to compete for customers through improved quality or customer service. Contracting out government services in general and ICT services specifically has a significant impact not typically considered in myths about private sector superiority.
Contracting should be used selectively when managing new and emergent ICT. Successful contracting requires performance monitoring and technical capacity, particularly with new ICT. Contracting can reduce technical capacity and make agencies prey for the rent seeking behavior of private sector firms. Consequently, government organizations with existing demand and technical capacity should embrace new ICT and avoid contracting out these services.
Another important design feature of public organizations is that they have more written rules. Theoretically, public organizations are driven to greater formality by high levels of accountability.6 While there is strong correlation between higher levels of formalization and managerial inflexibility, Mergel and Bretschneider suggest that this same formalization can promote wider diffusion and a wider array of applications of a new ICT. The need to generate formal rules speeds up the process of standardization around the new ICT, which promotes wider use by defining initial and immediate applications for new employees. Standardization also provides a mechanism for more rapidly evaluating new applications as they emerge.
Like many other aspects of government organization management, the myth of the marketplace and private firms is exploited in ICT management to unfairly advantage private firms and contractors. Significant evidence demonstrates that government organizations not only adopt new waves of ICT, but they also lead private firms in this process.
1Weisbrod, B. A. (1997). “The future of the nonprofit sector: Its entwining with private enterprise and government.” Journal of Policy Analysis and Management 16(4): 541-555.
2Hood, C. and G. Peters (2004). “The Middle Aging of New Public Management: Into the Age of Paradox?” J Public Adm Res Theory 14(3): 267-282.
3Schedler, K. and M. C. Scharf (2001). Exploring the interrelations between electronic government and the new public management. Towards the E-Society, Springer: 775-788.
Dr. Stuart Bretschneider is a Foundation Professor of Organization Design and Public Administration at Arizona State University’s School of Public Affairs. He is also the director of research at ASU’s Center for Organization Research and Design. Bretschneider was a past president of the International Institute of Forecasters and was the managing editor of the Journal of Public Administration Research and Theory from 1993 to 2000.
4Bretschneider, S. and D. Wittmer (1993). “Organizational adoption of microcomputer technology: The role of sector.” Information Systems Research 4(1): 88-108.
5Mergel, I. and S. I. Bretschneider (2013). “A Three-Stage Adoption Process for Social Media Use in Government.” Public Administration Review 73(3): 390-400.
6Rainey, H. G. (2009). Understanding and managing public organizations, John Wiley & Sons.