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The Main Obstacle to Government Efficiency is the Cost of Democracy

by Andrea Di Maio  |  June 27, 2012  |  3 Comments

As we go through a tough economic and financial climate, attention is drawn by the cost of government and how slashing it would significantly contribute to both reducing public debt and injecting more resources into the economy.

Although with varying degrees across the world, government is usually considered less efficient that the private sector. Sometimes this is a wild generalization, since government deals with a level of complexity that is unparalleled in almost any other industry sector, and is the service provider of last resort in a number of areas, from health care to industry subsidies, from education to public safety. It is also true that productivity could be increased significantly in many different areas, at least using criteria that would apply in the private sector.

The fundamental difference between the private and the public sector is that the former is no democracy. There is a CEO, a board, a set of priorities that are meant to maximize shareholder value in clear, monetary terms (e.g. earning per share, increase of stock value, top and/or bottom line increase). Sure, if the board underperforms, shareholders will ask for a chance, so there is a form of democracy. But shareholders are people (or institutions) who take a deliberate decision to invest in a particular company.

In government, every single citizen is a shareholder, and that’s not a choice. Therefore the diversity of viewpoints, needs, priorities is huge, and is reflected in how democracy works. Elected political leaders both need to get the job done (i.e. implementing the priorities that were at the basis of their election platform), and prepare for the next election. Where there are multiple tiers of government, there could be one or more elections per year, and the behavior of political leaders across all tiers may be influenced by the upcoming elections in one of those.

In well-functioning democracies, like the U.S., the four-year cycle of the federal administration is quite clear. the first year goes into getting settled and launching the first change initiatives, two more years to run the program, and the fourth year spent campaigning for election (or re-election). In less mature democracies, like in Italy, timeframes for decision are even shorter and the number of exception to be handled and fires to be extinguished skyrockets. But in both cases the pace of democracy is not necessarily compatible with what needs to be urgently done.

The cost of democracy is particularly evident in IT-intensive programs.

Shared services, for one, do require a fair amount of time and a stable, well-thought-out governance framework to deliver business value. But the cost of democracy either prevents implementing strong, centralized governance , or challenges the ability to keep it in place for a long enough time..

Digital agendas or information society programs or e-government programs also require perseverance to pursue culture change, business transformation, major changes in IT portfolio. No surprise that they underperform, and mostly focus on spending on infrastructure or external services rather than making change really happen

On the other hand look at places where democracy functions differently (and some might say there is less democracy): China, Singapore, UAE, to name a few. Although they are not immune from problems, their forms of more or less benevolent dictatorship lead to quite remarkable results when it comes to technology deployment and use.

While I am not suggesting that we give up the democratic processes that many of our ancestors fought very hard for, we need to understand that total cost of ownership of democracy is high and that its intangible value does not play very well in a ROI calculation. We just need to set realistic objectives when it comes to government efficiency.

Category: e-government  europe-and-it  it-management  

Tags: cost-cutting  

Andrea Di Maio
Managing VP
19 years at Gartner
33 years IT industry

Andrea Di Maio is a managing vice president for public sector in Gartner Research, covering government and education. His personal research focus is on digital government strategies, open government, the business value of IT, smart cities, and the impact of technology on the future of government Read Full Bio

Thoughts on The Main Obstacle to Government Efficiency is the Cost of Democracy

  1. Andrew says:

    Andrea, another good piece. I’ve often asked those planning to introduce an FOI law if the government is seeking any return on its investment or if it treats it as a sunk cost. But you’ve got to be kidding when you write that the US is a well functioning democracy. It’s a gerrymandered self-destructive oligarchy.

  2. Doug Hadden says:


    As you know, your article kicked off a twitter conversation. I agree that elections and democratic politics play a significant role in major IT decisions. I wrote a blog entry to expand on this at: My conclusions are that election cycles disrupt IT planning and implementation, that shared services and e-government is particularly affected by politics, and that IT budgets are politicized.

  3. […] compartiendo este artículo de hace un par de semanas de Andrea di Maio (VP de Gartner) sobre la dificultad de conseguir la máxima eficiencia en la gestión gubernamental, achacando una parte de las causas al sistema democrático. Por supuesto el autor no hace ninguna […]

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