Remember all that talk from past presidential campaigns about how candidates were going to cut the federal deficit by running the government more efficiently? Voters paid no attention to the claims, and they never panned out.

Democracy was designed to be participatory, not efficient. The funny thing is that now, with budget surpluses projected out into the future as far as the eye can see and with none of the candidates saying much about cost savings, a more efficient government seems to be taking shape.

From 1992 to 1999, Uncle Sam’s spending as a percentage of gross national product declined to 19% from 22%. Vice President Al Gore has said that, in 1993, "fully one-third of the entire federal work force—660,000 federal employees—controlled, checked up on, supervised, or audited the other two-thirds." Since 1993, a "reinventing government" effort has eliminated 351,000 federal jobs, saving $137 billion as of the end of fiscal 1997 (the latest period for which numbers are available).

The reason for this sudden burst of efficiency? The same reason that many businesses are finding themselves more productive these days. Information technology is letting the federal government automate expensive processes and, in some cases, get better prices from suppliers as it moves more and more of its 20 million yearly purchases to the Web.

There is a side benefit to the efficiency, too. As agencies use technology to speed processes and get a better handle on the information they manage, the federal government will become at least somewhat easier for companies and citizens to deal with. Already, the Federal Drug Administration has slashed years out of clinical approval times for many drugs, which not only gets important drugs to patients faster, but also can mean heftier profits for pharmaceutical companies.

The transformation of government will hardly happen overnight. The complexity of the federal government is many times greater than that of the most sclerotic business organization ever created, and many businesses are still having trouble changing their cultures fast enough to keep up with the Internet Age. New technology may yet create a dark side, too—think of electronic political attack ads or cyber-pressure groups bombarding politicians.

Still, after decades of meaningless talk about efficiency, even the federal government seems to be changing. "There isn’t a government CIO [chief information officer] out there who isn’t planning how to leverage technology to do a better job serving citizens," says John Nyland, vice president of federal systems at IBM.

Just ask Brent Barker. First thing each morning, the Eidetics executive launches his Web browser and looks for government contracting opportunities for the company, which makes flight-simulation software. He checks Commerce Business Daily, an on-line listing of contracts, then surfs procurement offices at Air Force bases, NASA, the Navy, and other sites. He figures he turns up lots of opportunities that he wouldn’t have seen previously. Because he now arranges contracts on-line—replacing the triplicate paper forms and mail-based communication of the past—he also cuts overhead expenses. The changes "save us a lot of money," Barker says.

Or talk to taxpayers who file electronically with the Internal Revenue Service. Last year, 29 million people entered tax returns electronically, up 19% from 1998, as the IRS promoted electronic filing heavily. While mistakes crop up on 20% of paper tax returns—because of errors both by filers and IRS data entry clerks—a mere 2% of electronic returns contain mistakes, because electronic filers use software that automatically calculates taxes. Those who filed electronically gave the IRS a satisfaction rating of 74 out of 100, far higher than the 51 out of 100 score from paper filers, according to a recent survey by the University of Michigan Business School. Meanwhile, the IRS saves money because it sends out fewer notices to correct errors.

These days, every government department, agency, office, task force, council, and working group seems to have its own Web site. All provide information that could have taken some digging in the past: tax forms, weather forecasts, Medicare information, Bureau of Labor Statistics data, census figures, legislative minutes, OSHA regulations, company 10ks.

The Code of Federal Regulations, for example, takes up several bookshelves in the library of Crowell & Moring, a Washington law firm that specializes in government-contract disputes. The firm used to rely on printed updates of the ever-changing regulations. But the binders didn’t contain "the supplements to supplements," attorney Joe Warren explains. "In one case, a client had been awarded a contract by the NASA space center in Ohio, which had its own series of internal regulations," he said. "In the past, I would have had to call the center and locate the right person to find the regulation, then get them to copy it and fax it to me." Now, Warren logs on and searches the NASA center’s Web site.

The U.S. Treasury’s Direct Web site, launched in September 1998, lets investors buy U.S. bills, notes, and Treasury bonds on-line.

The National Science Foundation accepts grant applications by e-mail and even conducts peer reviews on-line for the grants. "Academics no longer have to get on the plane and come down here," says Larry Brandt, NSF program manager for digital government.

FedStats.gov simplifies searches for information by gathering, in one spot, federal statistics from more than 70 offices. Eleven agencies have also come together at Students.gov, allowing college students to file taxes on-line, apply for financial aid, search for a job, even book a campsite for a weekend away.

Even as service improves, costs are going down because of widespread efforts to use the Internet to get better prices and to operate more efficiently. At the Defense Department alone, cost savings have run into the billions of dollars. In just one example, the department overhauled the way it purchases goods and services. It used the Internet to give 46,000 purchasers in 900 locations desktop access to a centralized system that cuts multiple layers out of the buying process, greatly improving efficiency. The system is "the most advanced procurement system in the government," says Ray Bjorklund, senior principal consultant at research group Federal Sources. American Management Systems, an information-technology consulting firm that built the defense procurement system, recently teamed up with Ariba, which sells Web-based purchasing systems to businesses. Sixty-five agencies using the AMS system will be able to buy direct from the manufacturers in the Ariba network.

Similarly, the Government Services Administration has set up a Web site that lets government employees buy goods on-line from a host of vendors.

The U.S. Postal Service has become more efficient by setting up an intranet that gives managers and marketing employees access to sales data and that helps with decisions on everything from products to office hours. The Bureau of Indian Affairs set up a new trust management system that more effectively manages 170,000 tracts of land and 100,000 leases for timber, coal, gravel, oil, and water.

Agencies are trying so hard to find efficiencies that total federal spending on information technology is $30 billion to $35 billion a year, according to various estimates. Spending on Internet-related efforts should reach nearly $1 billion in 2004, quadruple the current level, research firm Dataquest says.

Not that there aren’t plenty of challenges ahead. Most government information remains balkanized by department, agency, or group, and, before that can change, lots of work needs to be done to create standard ways of handling data. America Online last year tried a simple version of integration. It launched Government Guide, grouping the hodgepodge of government sites under such categories as consumer information, travel, and small business. Even that effort "was very labor-intensive," says Kathleen de Laski, AOL group director for government programming. "The aggregation points and useful search engines within the federal government are hard to find."

Authentication and privacy will also be tricky issues. How do you know whether the real John Smith, or an imposter, is trying to log in to check his Social Security information, file his taxes, or vote? The Social Security Administration garnered rotten publicity in 1997 when it opened up on-line access to personal Social Security earnings records, without the proper authentication tools. It was forced to shut down the site.

In general, Washington has a desultory record of handling major technology efforts. Systems that were supposed to transform the air-traffic control system and the Internal Revenue Service wasted billions of dollars and had to be redone. So, more problems will surely crop up.

The federal government is also setting its sights lower than many businesses are. Its push for efficiency is what, in business, is sometimes called "faster, better, cheaper." Washington isn’t doing much to create killer apps—the governmental equivalent of business applications such as on-line auctions or electronic trading, which have been so innovative that they have reset expectations about how commerce is done. [See accompanying story.]

Still, the government has made impressive progress and seems likely to keep moving rapidly. In November, government agencies, companies, and nonprofit groups convened for the first time to discuss access, privacy, authentication, and infrastructure. Steve Cochran, director of the Technology Leadership Consortium at the Council for Excellence in Government, a nonpartisan Washington think tank that organized the event, says it was a watershed in public-private sector cooperation. Then in December, President Clinton sent out a memorandum directing agencies to provide access to data "not by agency, but by the type of service or information people may be seeking." The memo also emphasized public-private partnerships. Cochran says: "This gives us the mandate we were looking for."

"Many in Washington talk of creating a mega-"portal"—sort of, a U.S. government-wide Yahoo! In this scenario, a home buyer, who potentially might want water-quality information from the EPA, crime data from the FBI, and recent home sale prices from local authorities, could find it in one place rather than having to visit each separate government site. "In the past eight months, every CIO I’ve talked to is looking at the portal approach," says Janet Caldow, director at the IBM Institute for Electronic Government, a Washington think tank.

To attack the authentication issue, the IRS is testing a system that involves sending an ID number to electronic filers through the mail. The Department of Education has a similar authentication tool when students apply for loans at its Web site. Katie Hirning, deputy director of the National Partnership for Reinventing Government, envisions a single authentication key that could be used at any government Web site. "That way, a citizen wouldn’t have to enter the data 20 times," she says.

Mike Hernon, president of Highway 1, an industry-funded, nonprofit group that helps officials implement e-government, predicts that every transaction with government will be on-line in as little as five years. He envisions portals where citizens will be able to renew permits, pay traffic tickets, file taxes, seek contracts, and file complaints. Web sites will group related federal, state, and municipal services, because citizens don’t care much about the distinctions between levels of government. For example, someone could visit one government site to report the birth of a child and have the information ripple throughout the many layers of government systems—generating a new Social Security number, lowering the parent’s tax withholdings, alerting the state health agency to send infant-care information, and informing the local school system that it can probably expect a new student in a few years. Government services might also be incorporated into businesses’ Web sites, so that someone conducting, say, a real-estate transaction could gather government information on the climate or the geology of the area and could apply for any necessary permits.

"Why should my experience with government be standing on line?" Hernon asks. "Interactions should be convenient for me and cost-effective for the government. And in the process, our relationship will improve."

In fact, as the government’s use of technology continues to improve, the changes may go to the heart of how government works. What’s at stake for government isn’t just easier, cheaper, speedier service, but the very issue of trust, according to Claes Fornell, a professor at the University of Michigan Business School. "For the private sector, the outcome of customer satisfaction is loyalty, repeat buying. In government, the outcome is trust."

Fromartz is a Washington-based writer who focuses on emerging companies in the New Economy. He can be reached at sfromartz@mail.com.

THE WIRING OF DEMOCRACY

Technology may end up not only fulfilling decades-old promises of efficiency, but also satisfy a far older dream: creating a democracy in which masses of citizens participate actively.

Already, Arizona experimented with on-line voting in its presidential primary, on the theory that dismal voter turnout would increase if it became easier for people to cast their ballots. Politicians, who have found it isn’t efficient to raise money in amounts smaller than the $1,000 maximum for individual contributions, are using the Internet to appeal to broad bases of people who can donate some fraction of the maximum. In the 48 hours following his victory in the New Hampshire primary, presidential candidate John McCain received more than $1 million through his Web site. Similarly, issues-oriented groups are forming "flash" communities on-line to raise money quickly and lobby on timely issues, such as the Clinton impeachment. [See "Comings and Goings.com," Context, November/December 1999.]

Assuming representatives treat e-mail as seriously as letters, perhaps the next demonstration in Lafayette Park, across from the White House, will involve more clicks than tear gas. Perhaps representatives will even monitor constituents’ views while sitting in the Capitol (where, with laptop computers at every seat, they will research debating points when they aren’t absorbed by the glitzy graphics and computer-generated simulations that colleagues are using to make their points).

Someday, the census could be moved on-line, to help ensure that all citizens are counted and that congressional districts are drawn correctly, so that each area gets the appropriate representation and federal funding.

As with business-world killer apps, such as the electronic spreadsheet, using technology to increase participation in government could lead to fundamental changes, but they won’t necessarily be quick or even predictable.

If people vote from home, they could go to candidates’ Web sites, research their positions, and make informed judgments even on local races. In theory, that means a higher quality of representation. But, in practice, who knows? Maybe it just means that the person with the best Web site wins. Similarly, being able to raise campaign financing in small increments would seem to dilute the power of the rich, but on-line voting might favor the wealthy, who are more likely to have computers.

Some attempts to make government more participatory may never fly—advocates for the poor say they’ll challenge on-line voting, on the grounds that it disenfranchises them. Even changes that happen will probably follow the rule of thumb that says it takes five years for new ideas to make it from the private sector into the federal government.

To pick one cautionary example: Not long ago, the Government Services Administration built a superb telecommuting system to help keep all those bureaucrats from clogging the Beltway. Wendell Joice, GSA team leader for Telework, likes it fine. He works from his Washington, D.C., home 20 to 30 hours a week and pops into the office downtown for meetings. But so far, Joice says, only 25,000 government workers telecommute—out of 1.8 million. He explains: "We’re still struggling with a management culture that is not all that comfortable" with the change.

—by John Erik Garr