Jer Basuki Mawa Bea

Advancing E-Governmnet:Financing Challenges

and Opportunities

Yu-Che ChenKurt Thurmaier

Andreas Joko Putranto1B1064

E-government

to (a) enhance the access to and delivery of Government information and services to the public, other agencies, and other Government entities or …

(b) bring about improvements in Government operations that may include effectiveness, efficiency, service quality, or transformation, …”

ONLY when well developed and operated “A critical element in the management of Government, to be implemented as part

of a management framework that also addresses finance, procurement, human capital, and other challenges to improve the performance of Government.”

Prof. Park, week 4

Introduction

Advance vs FinanceFinancial ChallengeOpportunities/Potential Gain

Framework1. Unifying Public Finance Framework for E-Transaction

- Classic Economy Theory DemandSupply

- Pricing Policy Framework

2. Toward a Self-Financing Model for E-Transactions with Business- The Enterprise Approach as an E-Government Policy

Unifying Public Finance Framework for E-Transaction

- Classic economy : supply and demand

supply: using externalities analysisdemand: using opportunity cost analysis

Externalities Analysis

Opportunity Cost Analysis

Government pricing policy for online service

The Externalities Perspective on E-Transactions

- Agencies vs Monopoly Rules – require modifications, subsidies and lower monopoly cost

- Externalities perspective to guide the chief of information, which is subsidized and at what level

- The lower degree of consumption externalities, the more narrower benefits, and the lower justification for subsidizing – agency should set a price for the transaction service that is high enough to recover full cost of developing and maintaining the service.

Back

The Opportunity Cost Analysis of E-Transaction Demand

- The highest amount they are willing to pay for a service is related to the marginal benefit they receive from using it.

Back

Pricing Policy Framework

- Services that have the highest degree of externalities shoud have highest level of social support (funded by government appropriation, expl: paying tax online)

- Services that benefit accrue exclusively to an individual firm should be funded entirely by the user’s fees for that service

- In the intermediate category, they may combine the public investments and user charges, depending on the degree of benefit accrue to the user.

- Political constraint

12

Prof. Park, week 4

Types of E-governmentAccording to parties involved:

◦Government to government: G2G or G2E (government to employees)

◦Government to business: G2B◦Government to citizens: G2C or C2G

A Self-Financing Model for E-Transaction with Businesses: Proposal

1. Government-to-Business (G2B) should use a market model that responds to the preference of firms and their willingness to pay for services.

2. The Approach should be managed with an enterprise-wide view using an enterprise fund financial structure to maximize efficiency and revenue generation

Adopting A Market Approach

- Market approach to service development is dependent on the demand for e-transactions by firms that do business with governments.

- By recognizing preferences or service, the government may develop online service that firms demand and willing to pay for.

No demand might not effectiveNo willingness to pay will be difficult to assess the relative demand for a service

- The ability to exclude firms from using the service unless they are willing to pay

Using Enterprise Strategy

Two dimension:1. Structural

- government can use an enterprise-level approach more strategically to develop e-transactions that meet the highest levels of demand from firms- use single Web portal that provides integrated interactive service to firms;

2. Financial- State reinvest fees from e-transactions and savings in portal maintanance and development, also recover capital and other cost with enterprise approach

The Need of Research to identify the preference and willingness to pay

Conclusion- Finance is still one significant factor in

developing the e-government- Opportunities may come up from several

ways - Self-Financing model may give an

alternative solution for e-transaction development

Thank you