E-government is the application of information technology to the processes of government. It has been defined as digital information and online transaction services to citizens. Others use the term as an extension of e-commerce to government procurement and see it only in the realm of B-to-G (business to government) transactions. EDI¹ and Internet applications within trade facilitation agencies, such as Customs Authorities, are another aspect of e-Government.

E-governance is, however, a much broader concept. As in the case of e-commerce, it does not simply mean the transferring of existing procedures to an electronic medium but rather implies a new definition of, and approach to, public governance. It represents a paradigm shift to the new information age. As the Internet age and new digital economy emerges across the globe, e-governance is going to be very important, especially for developing countries.

E-governance implies action of the state and its agencies at two levels: Specifically

• the promotion of information and communication technologies and especially e-commerce, on the one hand and
• The adoption of these technologies and the use of the Internet within a commitment to open systems for government business, citizen interaction and most importantly, development.

Good governance has been on the international development agenda ever since the early 90s. International and bilateral donors have been insisting on this standard, which though not clearly defined, implies that there must be transparency in government decision-making, clear procedures and civic participation in the whole process. Electronic governance embodies these principles and brings the power of information technology to the process. In doing so it can empower the people and promote entrepreneurship, development and democracy.

Electronic Governance has been defined differently by several players. For example, the Indian Ministry of Information Technology defines it as using information technology to bring about SMART governance:

• Simple
• Moral
• Accountable
• Responsive and
• Transparent Governance.

The UK government² sees it as an opportunity to harness ICT to:

1. improve the efficiency and effectiveness of the executive functions of government including the delivery of public services;
2. enable governments to be more transparent to citizens and businesses through giving access to more of the information generated by government;
3. facilitate fundamental changes in the relationships between the citizen and the state, and between nation states, with implications for the democratic process and structures of government.

The OECD Business Forum³ recommends the following Government action:

• Government should provide SMEs with information and education relevant to market entry opportunities provided by global electronic commerce.
• Governments should create an environment that is conducive to private-sector investment in information technologies and encourage capital access for SMEs.
• Governments should use new electronic delivery systems to provide the means to significantly enhance the internal efficiency and productivity of public administrations.
• Governments should be pioneers in using new technologies for making electronic forms available for collecting taxes and other functions.
• Governments should promote electronic commerce through the public procurement system, carried out in a fully open and competitive environment, based on cost-efficient, commercial solutions that are technology neutral.
• Governments should use new electronic means to deliver core public services. In particular this would concern public information and cultural resources, databases for health services, web sites at local, regional and national levels and public libraries and databases, where appropriate.

In summary, e-governance involves not only the introduction and use of e-commerce by government (i.e. e-government) but also ‘buying-into’ the overall philosophy of open communications, open standards and transparent electronic systems for governance and development. For the first imperative, developing countries and transition economies need not just a policy and legal framework for e-commerce but also the resources and infrastructure. For the second, they need a commitment to transparency, citizen participation and democratic functioning.

E-commerce has revolutionized many businesses and transformed their relationships with customers. In the public sector however, effects have been less dramatic, raising the question whether the full benefits of e-commerce in delivering public services are being realized.

Developing and transition economies face a special challenge and responsibility to create a conducive policy environment that on the one hand allows for the development of e-commerce and on the other ensures the social objective of providing access and benefits for those that cannot afford it. Electronic governance including initiatives such as public Internet terminals, rural access at subsidized cost, and e-literacy are some of the initiatory steps that must be considered and promoted towards this end. By using the Internet as a tool for electronic governance, the environment for e-commerce development itself would be furthered and strengthened. The premise here is that in promoting business online, governments will facilitate the delivery of information, goods and services. This will then deliver more traffic across data networks which, in turn, will serve to provide the revenues and investment rationale needed to encourage further infrastructure development.

There are several useful examples of best practice in this area:

• E-governance should promote active citizen involvement and electronic democracy. INFOCID is an example of how this is being effectively accomplished through a 'single window service' for citizens in Portugal. Co-ordinated by a steering committee, INFOCID is an interdepartmental, co-operative system that has more than fifty different partners from all the ministries of Portugal. The system uses multimedia technology and allows easy and free access to information through kiosks in the street, as well as through the Internet.
• Similar examples of good practice are found in the Cape Town Metropolitan Council, South Africa; in the Hong Kong Interactive Government Services Directory; in the Singapore One-Stop Government Web Service Centre; and in the South Africa Government On-line. To ensure access to the poor and under-developed regions, the government of South Africa has also provided every village with an Internet connection.
• In Andhra Pradesh, a southern state in India, where e-governance is expanding rapidly, the state government provides 18 services via the Internet.. These range from issuing of driving licences to payments for electricity, water, and property tax, to land and house ownership records, and birth and death registration services for both urban and rural areas. This is more, even, than the government in the United States. In order to extend the benefits of such services to the illiterate population, touch-screen kiosks in rural areas are being planned.
• To involve and consult citizens, the City Information Highway of Tampere, Finland, has been set up to promote two-way communication. And in order to make sure that all citizens have access to the Internet services, the city government has installed computers for public use in museums, libraries, net-cafes etc., free of charge or for an low fee. Public schools (comprehensive schools, high schools, and vocational colleges). have all been connected to the Internet. All services are available at any hour via the Internet.

Whether using e-commerce and IT as tools for development and governance domestically, or to promote and increase export growth and international trade, the governments of developing/transition countries need to adopt a proactive role. They need to ensure that the benefits of e-commerce accrue to those trying to overcome economic marginalization due to geographic, financial, technological or educational handicaps. Indeed, the need to close the gap between those with abundant information at hand and the 'information have-nots' itself provides a strong rationale for the development of e-commerce.

How this sends the right signals for e-commerce

For the private sector, the introduction and promotion of Internet-based services by government provide opportunities for collaboration and joint projects. The commitment of governments and the provisioning of funds for this purpose send very positive signals to investors in IT and e-commerce. Once this extends to e-procurement, i.e. the extension of e-commerce to public procurement, the benefits to business (and the state, it is argued) are manifold. Such measures also ensure that a proactive government promoting e-governance will also be promoting e-commerce both in terms of the ‘hard’ infrastructure (telecom and connectivity) as well as the ‘soft’ areas of e-literacy, e-services and an e-friendly framework for e-commerce. Not only does this better invite investment in e-commerce and the infrastructure required for this, it also helps create a better environment for business and trade competitiveness in the new digital economy.

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