Electronic government (e-government) intersects many legislative issues, including privacy,digital divide (the lack of equal access to computers, whether due to a lack of financial resources ornecessary skills), public access to government information, service delivery, and informationsecurity. E-government solutions are prominently represented in efforts to improve the managementand efficiency of government information technology resources. As such, e-government can beconsidered a process, or a means to an end, rather than an end in and of itself. E-government is stillin the earliest stages of development and promises to evolve with advances in technology andincreased acceptance and trust in electronic communications. (1) The dynamic nature of e-governmentand its broad sectoral applications may sometimes contribute to a lack of a common understandingof its meaning and significance. To help policymakers discern e-government initiatives relative totheir applications to various issues, this report identifies and defines the principal e-governmentsectors and phases of development. This report also outlines some of the major issue opportunitiesand challenges associated with e-government. E-government means different things to different people. Some observers define e-governmentin terms of specific actions: using a government kiosk to receive job information, applying forSocial Security benefits through a web site, or creating shared databases for multiple agencies, asexamples. Other observers define e-government more generally as automating the delivery ofgovernment services. While perceptions of e-government vary widely, some common themes canbe identified that capture its evolutionary nature. E-government involves using information technology, and especially the Internet, to improve the delivery of government services to citizens, businesses, and other government agencies. It hasthe potential to more directly connect the federal government with its citizens in a manner that opensnew opportunities while also raising new challenges. E-government could enable citizens to interactand receive services from the federal government (or state and local governments) 24 hours a day,seven days a week. Some observers of e-government initiatives suggest service delivery couldbecome more convenient, dependable, and less costly. The Gartner Group describes e-governmentas "the continuous optimization of service delivery, constituency participation, and governance bytransforming internal and external relationships through technology, the Internet, and new media." (2) Mark Forman, Associate Director for Information Technology and E-Government at the Office ofManagement and Budget (OMB) has defined e-government as "the use of Internet technology andprotocols to transform agency effectiveness, efficiency, and service quality." (3) E-government is itself a process still in the early stages of development. Initial forays into e-government initiatives have focused mostly on providing enhanced access to information and basicservices. Although the full transformative effects of e-government remain largely unrealized at thistime, the rapid growth in interest and resources dedicated to e-government initiatives may contributeto swifter changes. One area where the implications for implementing e-government initiatives may have asignificant effect relates to the concerns of federalism. The Constitution established a federal systemof governance granting certain powers to the national government while reserving others to the statesand the people. Throughout the history of the country, the nature of American federalism hasevolved, reflecting the political, economic, and social changes that have occurred. (4) However, oneof the hallmarks of a federal system of governance is the emphasis on vertical divisions of power. In contrast, e-government initiatives utilize information technologies that emphasize a horizontal,or networked, model of communication and interaction. While e-government is designed, in part,to break down the barriers separating different agencies, it could also have a similar effect on theboundaries of federal governance. In light of the divergent properties of federalism and e-government, the advent of e-government has the potential to effect significantly the power relationship between the national and stategovernments. An example includes initiatives to create "one-stop-shopping" Web sites to obtaingovernment services and information, such as the FirstGov site. In addition to its original role ofproviding access to all federal government Web sites, FirstGov has added links to most state Websites as well. (5) One of the goals of these types of sitesis to create an experience that attenuates theagency-centric approach to providing services. Although this usually refers to agencies at the samelevel of government, it could also include services that are provided through some form of national,state, and/or local cooperation, such as welfare, transportation, or law enforcement activities. However, these same efforts to improve the delivery of government services could also diffusepolitical responsibility and credit, making it less clear from where the funding and direction areoriginating. Discussed in greater detail below, the advent of e-government raises a number of issues. It isimportant to stress at this point the multidimensional nature of those issues. On the one hand,e-government provides new opportunities to enhance governance, which can include improvedefficiency, new services, increased citizen participation, and an enhanced National InformationInfrastructure. On the other hand, e-government also presents new challenges to governanceincluding information security, privacy, disparities in computer access, and management and fundingrequirements. Together, all of these issues are complicated by their combined intra- andinter-governmental nature. They can crosscut both the various sectors and stages of e-governmentdevelopment. However, they also share a number of recurring themes often associated withprevious, less technologically-dependent approaches to improving government such as jurisdictionalauthority, procedures for the appropriate handling of information, building and maintaininginfrastructures, providing services, and citizens' rights. The multidimensional nature ofe-government suggests that there are no quick fixes for the concerns raised, but rather that issues willneed to be addressed with careful attention to context and precedent. Although e-government encompasses a wide range of activities and actors, three distinct sectorscan be identified. These include government-to-government (G2G), government-to-business (G2B),and government-to-citizen (G2C). Some observers also identify a fourth sector,government-to-employee (G2E). However, since G2E operations are intra-agency activities, theycan be considered a subset of the G2G sector and are not addressed separately in this report. Aseparate report focusing specifically on G2E issues is forthcoming. In many respects, the G2G sector represents the backbone of e-government. Some observers suggest that governments (federal, state, local) must enhance and update their own internal systemsand procedures before electronic transactions with citizens and businesses can be successful. (6) G2Ge-government involves sharing data and conducting electronic exchanges between governmentalactors. This involves both intra- and inter-agency exchanges at the federal level, as well asexchanges between the federal, state, and local levels. Motivating Forces Behind the G2G Sector. There are a number of forces motivating G2G e-government initiatives. One of these involves legislation. There are a variety of laws and regulations that are contributing to the implementation ofe-government initiatives. (7) For example, thePaperwork Reduction Act (PRA) reduces theinformation collection and reporting requirements of the federal government while also promotingthe coordination of government-wide information management activities. (8) The Computer SecurityAct requires federal agencies to develop information security plans, and tasks the National Institutefor Standards and Technology (NIST) with the responsibility to develop federal governmentcomputer security standards. The Clinger-Cohen Act, among other provisions, established a chiefinformation officer (CIO) in each executive branch agency, decentralized and streamlinedinformation technology procurement procedures, and assigned information technology capitalplanning and investment responsibilities to the Office of Management and Budget (OMB). (9) TheGovernment Paperwork Elimination Act (GPEA) requires OMB to provide leadership in acquiringand implementing the technology necessary to substitute electronic documents for paperdocuments. (10) GPEA also tasks OMB, inconjunction with the National Telecommunications andInformation Administration (NTIA), to establish procedures for the use and acceptance of electronicsignatures (11) in the executive branch of the federalgovernment. A second force spurring G2G initiatives is the interest in improved efficiency. One of the expected benefits of information technology investment solutions often cited by proponents is costsavings achieved by increasing the speed of transactions, reducing the number of personnel necessaryto complete a task, and improving the consistency of outcomes. (12) As attention to efforts to containthe growth of the federal budget has heightened, so has interest in using information technologysolutions to streamline procedures and trim costs. Related to this interest in efficiency, a third driving force is the growing attention being paid to improving the management of federal government information technology and public resources. Efforts to identify and apply "best practices" from other areas of the public and private sectors havehelped fuel the development of federal e-government initiatives. State and local governments areoften perceived as models for e-government initiatives due to their role in delivering services tocitizens. (13) State and local governments are alsothe targets of many G2G efforts due to their relativeproximity, geographically and politically, to citizens. A growing reliance on information technologygenerally, and the need to update and invest in long term information technology projects, such asthe overhaul of the Federal Aviation Administration (FAA) and the Internal Revenue Service (IRS)systems, have emphasized the importance of good information technology management practicesto help ensure the success of these projects. As part of re-examining information technologymanagement strategies, policymakers have considered many approaches to restructuring government. In this context, e-government is often proposed as a solution. Examples of G2G Initiatives.