ICT ENABLED ORGANIZATIONAL CHANGES AND PUBLIC SECTOR REFORMS: A POLICY PERSPECTIVE

ICT ENABLED ORGANIZATIONAL CHANGES AND PUBLIC SECTOR REFORMS:
A POLICY PERSPECTIVE

Isabel Meiroz Dias , Nicolau Reinhard ,Cesar Alexandre de Souza
1 2 3

Abstract. The objective of this paper is to identify the relationship between two areas of
public policy: Information and Communication Technologies (ICT) and public
administration. Our case study is the State of São Paulo, the largest state in Brazil in terms of
the number of inhabitants, and share of the country’s GDP. In order to answer the research
question we identify the events in which significant changes happened involving either
organizational form restructuring, IT implementation, or both. We adopt the concept of policy
as evolution, that is, as a continuous process, in which the original plan, formalized in laws,
regulations and official statements is continually transformed by the actions of
implementation.

1. Introduction
What characterizes a “good government”? Answers to this question depend upon the historic
period, individual preferences, and the context in which the question is asked, and often lead
to discussions regarding the internal structure of government organizations. Throughout the
XX century, the dissemination of bureaucratic arrangements and later the New Public
Management (NPM) ideas were behind many restructuring processes inside governments.
Together with this revision of the structure of the State, and in many ways reinforcing it,
information and communication technologies (ICT) have been supporting all kinds of
innovations inside organizations: from simple process alterations to deep strategic
realignments. Although there is clearly a relationship between ICT and public sector reform,
there is still much to be understood about their mutual influences.

In order to contribute to this debate, we analyze the case of the São Paulo State Government,
which made significant investments in ICT between 1995 and 2006, while simultaneously
promoting deep organizational changes. We will not only look at the changes in public
administration where ICT were used, but also analyze the public administration policy in
general, and the transformations that took place regardless of ICT. This approach allows for a
wider view of the reform and a better understanding of the role played by ICT in government
restructuring initiatives. Our working assumption is that reform ideas shaped and pushed the
use of ICT by the government, in the same way that ICT acts as a trigger for reform.

2. Literature Review
Our research adopts the concept of policy as evolution [12], an ongoing process, in which the
original plan, formalized in laws and official documents, is constantly transformed by actions
of implementation. While a policy is being shaped, original resources and objectives are
modified, causing new laws and regulations to be created.
1 University de São Paulo, Brazil, meiroz@gmail.com
2 University of São Paulo, Brazil, reinhard@usp.br
3 University of São Paulo, Brazil, calesou@usp.br

ICT Enabled Organizational Changes and Public Sector Reforms

In the literature review it is possible to find at least three different ways of approaching the
relationship between IT and state reform. One of the ways of studying this relationship is to
evaluate ICT’s “transformative potential”, or the depth and width of the changes enabled by
ICT. Under this perspective, the literature can be divided in three streams: careful
considerations, which describe the changes brought by ICT as incremental (for instance,
Hudson [8]); moderately optimistic, which call one’s attention to the necessity of creating a
large base of support for wider transformations (such as in Madon et al. [11]); and open
enthusiasm, along with the expectation that ICT will bring an general, wide and structurally
distinct influence to governance arrangements (as in Dunleavy et al. [3]).

Another perspective about the relationship between ICT and reform focuses on the degree of
interaction between these policies, and how much ICT is relevant in a reform context. One of
the manners of approaching this question is by ignoring it completely. Researchers in the area
of public sector reform have frequently failed to mention what role to expect ICT to play in
government restructuring initiatives [7],[14]. Other researchers understand that the use of ICT
in the public sector is not a policy in itself, but rather one of the areas of a public
administration policy [6]. Some believe the opposite, which is that ICT is an enabler of public
sector reforms, or even more, that ICT is actually essential for the current wave of reforms
[4], [9]. Finally, there are those researches that suggest that ICT enables specifically one type
of reform, those that are strongly influenced by the NPM [2], [9].

A third way of approaching the relationship ICT-reform is analyzing the public administration
principles supported by ICT implementations. Since the beginning of the 20th century, at least
three public administration models have emerged: Bureaucracy, New Public Management,
and Governance (or a networked government). Although, as mentioned, ICT are frequently
described as connected to the principles of NPM, there is also evidence that technology might
support policy objectives quite distinct from the essence of NPM, such as social welfare and
the increased participation of citizens in the political process [1, 13], and there are those who
believe that the use of ICT inside governments is creating a completely new organizational
form. [3]

3. Research Questions and Methodology
The research objective is to identify the relationship between public administration policy and
ICT policy in the State of Sao Paulo, between 1995 and 2006. Our working assumption is that
these two policies interact, and that ICT policy influences administration policy as much as
the ideas about how to improve the public sector have influenced ICT initiatives. The research
question is: What is the relationship between public administration and ICT policies? To
answer this question we identify areas of convergence (or diversion) between both policies,
and if there is a relationship of precedence or dependence between them. For this purpose we
built a narrative which describes the main events during which significant modifications in
the organizational form, or relevant ICT implementations, took place. The narrative includes
the declared intentions of the policy, formalized in laws, regulations and official statements,
in which we search for explicit values and assumptions that act as justifications for the policy,
and whether these include any mentions to the role to be played by ICT. It also includes the
emerging policy, which can be identified ex post in the overall direction taken by the policy.
Other elements of the narrative are the relevant external factors that had a direct impact on the
policies. After identifying the most significant events and building the narrative for the eleven
year period, we analyzed the degree of convergence between both sets of policies. We search

Dias, Reinhard & Souza Page 3

the policies for patterns in governmental action and in the use of resources. This is important
to understand what type of public sector reform was being pursued.

The State of São Paulo is the largest state in Brazil in terms of its population (about 40 million
people) and share of the country’s GDP (about 30% of the Country’s GDP). Brazil is the most
populous country in Latin America (about 190 million). The Country has been recognized for
its many initiatives in the use of ICT in the public sector, like the electronic filing of personal
income tax return and the use of electronic voting. The State of São Paulo has been one of the
leading states in Brazil regarding the introduction ICT innovations in the public sector.

Data were collected between March 2004 and August 2006, while one of the researchers
worked as consultant and instructor for the State Government. This participant observation
stage was later complemented with in-depth interviews with key actors: two representatives
from the top government hierarchy, who contributed with their political view, and three senior
civil servants, strongly involved with both administration and ICT policies. Besides the
primary data collection, the explicit component of the policies was covered with the aid of
documentation analysis, including laws, regulations, articles and books published by the
government. The combination of primary and secondary data allowed reconstructing the main
events of the period and writing the narrative, which was divided in three stages of
approximately four years each, allowing the investigation of a longer historic period [15].

4. The Case Study

4.1 The First Stage (1995-1998)

During the first half of the 1990s the public sector reform was high up in government agendas
throughout Brazil. On the federal level the ideas of NPM were influencing a movement in
which the government would keep its core activities, but work with the private and third
sectors in service delivery, and regulate the provision of utility services by private companies.
These ideas were an important source of inspiration to Brazilian states, which have enough
autonomy to formulate their own policies, but saw this reform as the answer to a series of
difficulties – in particular, the then severe financial crisis. Simultaneously, recent ICT
innovations were reinforcing reform initiatives. The dissemination of the internet became an
incentive for governments to rethink their relationship with citizens and contractors. Many
saw ICT as the natural solution to improve administration and technology was for the first
time reaching the centre of the political stage,.

In Sao Paulo the situation was the same. The public sector reform was a major campaign
proposition of Mario Covas, who was in 1994 a candidate for the government of the state. The
role of ICT was central in their proposition: technology was seen as the way to enable
changes, not only improving service delivery, but changing government as such. The severe
financial crisis faced by the State of Sao Paulo when Covas eventually won the election and
took charge in 1995 meant that the reform, with the use of ICT, would actually be the priority
of Covas’ first mandate, and the driver behind his main administration goals.

Although ICT was considered strategic by Covas government, this does not mean that the
directions of the reform were simply following possibilities opened up by available
technology. On the contrary, during Covas’ first mandate, ICT and strategy were aligned at
the highest hierarchical levels. The group responsible for the main ICT implementations was
led by politicians and administrators with no technical background, being supported by


specialists from Prodesp, the state-owned data processing company, who were transferred to
the governor’s office, reporting directly to the strategic management team.

This situation allowed the implementation of large corporate systems, with tax collection and
increased control over expenses as priorities. The systems would run on a network that was
for the first time connecting the top level of administration in the State. Although designed
mainly to improve operations, the systems also brought significant process changes. For
instance, the consolidation of data originating from all secretariats immediately led to
comparisons amongst Secretaries, and forced them to become familiar with details of
operations under their responsibility. One example from this period was the implementation
of the state-wide, totally centralized budgeting, financial control and accountancy system
(named SIAFEM), which led to an enormous process transformation, affecting all
government units, standardizing procedures, allowing for the establishment of reference
prices for nearly all government purchases.

Although we argue that the ICT implementations followed the guidelines proposed for the
reform and not the other way around, it is important to mention that these systems owed their
existence to and were strongly constrained by the infrastructure already available at the time.
Thus, even though the reform was guiding ICT implementations, the systems were not built
from scratch, but rather evolved from whatever infrastructure was already in place.
Government managers at the time also mention the personal involvement of the Governor as
one of the important reform enabling factors. But besides this favorable internal environment,
Brazil’s successful inflation control policies greatly contributed to the improvement of the
State’s financial situation. Another relevant factor was the loan obtained by state from the
International Development Bank, which financed the restructuring of financial, budgetary and
accountancy controls program.

4.2 The Second Stage (1999-2002)

In 1999, Covas was re-elected and started a second mandate. This time the balance between
ICT and administration policies began to shift. Financial recovery was not a central concern
anymore, and the reform lost momentum. The government plan for the re-election campaign
did not emphasize reform, but rather focused on specific policies, with objectives such as
creating jobs and building highways. Possibly due to the weakening of the reform initiatives
in the period, ICT policies would grow in importance and become associated with a ‘new
management style’: electronic government. The government plan mentioned the construction
of a ‘organizational model’ for ICT management, as well as the implementation of a
technological infrastructure and the use of ICT for service delivery, which suggests that,
rather than being subordinated to other policies, ICT began to be seen as a political force of its
own. Ironically, while ICT became more important conceptually, there were not as many
strategic ICT implementations during this period, when compared to the previous one.

Governor Covas died in the middle of the mandate in 2001, with Vice-governor Geraldo
Alckmin completing the term. This change produced some disruption in the government.
Although projects such as the automation of vehicle tax collection, and the electronic
procurement exchange were reminiscent of the guidelines followed in the previous period,
between 1999 and 2002 it is possible to identify ICT investments not directly associated with
the reform. A very eloquent example of this new approach is the public telecentre - digital
inclusion programme, AccessSP: instead of supporting a specific reform objective, as
previous investments in ICT did, its guiding principle was the importance of technology itself.
Users of AccessSP telecentres are free to use computers without being directed towards the


use of any specific service. Therefore, the programme would not be justified if considered
only as a service delivery channel, but should be understood as part of a social policy: ‘access
to ICT as a right of the citizen’, even though its effectiveness has been challenged [10].
Another example of this new ICT policy is Intragov, a state-wide data communication
network, developed to support the management systems developed during the previous
mandate. This was an investment clearly motivated by technical reasons, and only indirectly
influences the reform policies.

In this period, secretariats with available financial resources would also develop their specific
applications in parallel. Although these applications were developed with the objective of
improving service delivery, and could be considered as part of a wider movement of
innovation in governmental practices, they were not part of a state-wide policy, and were not
implemented by the team located inside the Governor’s office.

4.3 The Third Stage (2003 – 2006)

Instead of focusing on internal restructuring, the plan for Alckmin’s re-election established
the improvement in service delivery as the main objective of public administration. The 4-
year government plan approved in this period would mention ‘efficiency’ as the way to
improve service delivery and reach equality and effectiveness in the use of public resources.
For the plan formulators efficiency meant establishing partnerships with other government
levels and international development agencies, as well as the private and third sectors. In line
with the two previous mandates, once more the plan mentions the necessity of the state to
work as a regulator, this time adding a new dimension to this role: to orchestrate the networks
amongst all these actors.

In this plan, ICT’s participation, although not very clear, is certainly smaller than in the past.
ICT is expected to support ‘more dynamic processes’, which would guarantee management
transparency and effectiveness. In an interview, the Governor declared his belief in better
management as the way to improve service delivery, adding electronic government as a new
way of managing, more integrated and less bureaucratic. However, documents show a
transition in ICT’s role. Not only its contribution to government was not as clear as before,
there were contradictory views in top administration regarding the role of ICT, a symptom of
the lack of direction.

As for the establishment of partnerships, the main achievements between 2002 and 2006 seem
to have been expanding the delegation of health services to private partners, and the adoption
of this model by many organizations in the area of culture. Another significant move was the
creation of the institutional model for public-private partnerships. Of course, none of these
initiatives was dependent on ICT. However, another group of reform initiatives did rely
heavily on ICT. Aligned with the efficiency discourse, a state-wide Government procurement
system was implemented, which had received a considerable emphasis in both the candidate’s
government proposal and later in the 4-year plan. Another important reform stream was the
improvement of service delivery, which can be divided in four groups. First, the efforts of
restructuring that took place inside secretariats, and in these ICT played a variable part.
Second, came the publishing of the manual of quality standards for public service delivery, in
this case, with a secondary role for ICT. Nevertheless, the development of the all-government
encompassing Citizen.sp portal, and the e-poupatempo, a virtual one-stop government
services provision portal, show an alignment of ICT with the reform objectives.


The third group of initiatives comprises a series of training programmes, reaching over 80
thousand civil servants, with ICT being many times one of the course subjects, if not the main
one. These investments in training meant that the concepts of reform, and the knowledge
about the results achieved to that date, should reach a wider audience, with a special focus on
middle level administrators. Finally, the investments made in internal communications can
also be seen as part of the efforts to improve service delivery, and an attempt to consolidate
all reform initiatives that had been taking place since 1995. The launch of a magazine and an
award (Mario Covas Award), both devoted to the subject of innovation in public
administration, were meant to motivate practices considered desirable by top government and
worked as a window to the various changes that had been implemented.

This period also saw the creation of a state-wide organisational structure for ICT
management, directly linked to CQGP (Quality in Public Management Committee), which
was the State’s central ICT and quality governance committee. This can be seen as an attempt
to gain more influence in the secretariats’ ICT policy making process. The increase in the
number of ICT projects justified a more integrated coordination of the central governance
group activities and the projects developed by individual secretariats. However, this proved
hard to implement. One of the main difficulties was that not all government units consolidated
their ICT budgets in one single account in the 4-year plan. Many managers would prefer the
flexibility of deciding on their own on their ICT investments out of their total budget. Other
limiting factors were the contrasting visions about ICT, even amongst the small group closest
to the governor. Finally, the creation of a formal ICT management structure in which Prodesp
did not occupy the central role was a frequent source of conflicts that eventually became
politically unbearable. Still, while the ICT structure built around CQGP lasted, it actually
made significant accomplishments. Although this formal structure had limited autonomy to
enforce guidelines throughout the government and had to depend strongly on its ability to
influence and negotiate, this did not invalidate the group’s importance as policy makers.

The period between 2002 and 2006 is, therefore, difficult to classify. There was not one single
strong and well defined concept guiding neither ICT nor reform policies. Nevertheless, both
were still clearly in the centre of the political agenda, and in many ways aligned. One way of
seeing it is that, after having dealt with the most dramatic problems of public administration,
the new investments in the area became more fragmented, even though it is possible to draw a
line of convergence amongst them. The construction of a governance network and the
improvement of service delivery are more generic accomplishments that could not be
measured in the same way as the financial recovery.

5. Findings
The main research question was ‘What is the relationship between ICT and public
administration policies?’ This relationship varied over time. The subdivision of the research
period in three different stages, corresponding to the three different mandates is useful to
answer the question. During the first period, financial balance was the main focus of the
reform. Nevertheless, in Sao Paulo, financial stability worked as a trigger for a wider reform,
and its effects modified how the State worked. The reform, and ICT by extension, was on top
of the political agenda during that period. On one hand, important reform events happened
regardless of any ICT applications. On the other hand, the important investments in ICT were
all strongly connected to the reform objectives which could be interpreted as subordination of
ICT to administration. This situation converges with the stream of literature that understands
the use of ICT as one an area of administration policy.


The high political profile of the administration policy during the first stage of the case study
might have been made possible thanks to the presence of the elements described in the
literature [14] as essential to sustaining a reform strategy: centralized government authority,
an agreement among main leaders agreed on the reform objectives, in addition to
organizational capacity and public acceptance. The Governor had just been elected, and had a
very specific goal to achieve (financial balance). However, once these elements lost their
initial momentum, the reform became fragmented. The ICT policy during the second stage
reflects this lack of direction, since the main actions in this later period are not subordinated
to the administration policy, making it possible to identify an agenda of its own for ICT.

In this case study we observed the effects of the lack of clear reform directions, especially
after 1999, when the guiding principles for the administration policy became considerably
dispersed. During this second stage there was practically no alignment between administration
and ICT policies, and in certain occasions ICT policy went as far as to trigger reform actions
(for instance in the case of car tax system). However, due to the lack of coordination between
initiatives, and the absence of a clear direction for them, there is no support to the affirmation
that ICT enabled an administration policy.

During the third stage (Alckmin’s second mandate), even with the reform being largely
dissipated into a series of fragmented actions, ICT policy seems once again to follow the
guidelines of the administration policy. There was a frustrated attempt to increase the
relevance of ICT to the reform, and of the ICT policy guiding administration. Ironically, this
initiative, and its subsequent failure, opened the space for the service provider Prodesp to take
control of ICT in the State towards the end of this period. Overall, throughout all three stages,
it is possible that technology may have induced changes in situations where there was a
vacuum of direction, which might have been the case of some smaller secretariats, in which
ICT acted as leverage for policies that were formed around the available technology and large
systems, such as SIAFEM and Intragov.

The case study does not support the argument that ICT brings a general, wide and structurally
distinct influence for governance arrangements (as has been suggested by Dunleavy et al. [3]).
But one cannot claim either, that changes were merely incremental, with effects visible only
on the long run (such as suggested by Hudson [8]). There is evidence in the case that ICT has
enabled considerable transformation in government processes, especially when aligned to
administration policy objectives. Regarding the degree of interaction between administration
and ICT policies, the case analysis supports the claim that ICT enables administration
reforms, and there are situations in which it played an essential role, as has been described in
the literature [4, 5, 8]. However, the importance of ICT to the reforms cannot be generalized
to the administration policy as a whole. Therefore, the case analysis does not support the
claim that the administration policy depends upon ICT as an enabler. Quite on contrary, there
where occasions throughout the period studied in which ICT would be reduced to just another
dimension of the administration policy, as suggested in the literature. And, overall, the
attempts to establish an ICT policy independently of the administration policy did not prove
sustainable.

Also, the case analysis supports the perspective that ICT may enable administration principles
that are not restricted to the NPM [1, 13]. On the other hand, an important characteristic of the
NPM (and of the bureaucratic model) is the top down implementation, without the
participation of those directly affected by changes. And, in this regard, there seems to be a
greater convergence between the administration and ICT policies and the NPM principles.


This research adopted the perspective of internal uses of ICT, with the purpose of
organizational change. This focus reflects clear choices made by the Government of São
Paulo (and, by extension, of this research). Directing ICT investments inwardly implies that
other ICT policies may be left behind, such as the development of a local software industry.

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