08-04-00

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Joseph Stiglitz, former Chief Economist of the World Bank and Chairman of President Clinton's Council of Economic Advisers, raised the key issue of using new technologies to open out the process of government as part of today's debate at Boosting the Net Economy 2000 - a unique global online think-tank.

Mr Stiglitz said there was significant potential for governments to use the Internet to involve citizens in their deliberative processes as never before. "Many key decisions are complex, and there is considerable uncertainty about the consequences of alternative measures. The policy making bureaux in most governments are limited in size, and are typically overloaded. The new technologies hold out the promise of drawing upon far wider expertise.

"One advantage of this approach is that it would widen the circle of expertise which the government could draw upon, which all too often is limited by circles of personal acquaintance."

Helle Degn, Chairperson of the Committee on Economic Affairs and Development of the Parliamentary Assembly of the Council of Europe, examined the future role of the nation state in an increasingly globalised society.

"No doubt, national governments will have to modify their role and behaviour in the 'new economy', and the current efforts at closer international co-operation must be seen against this background. However, it must not be forgotten that economic life very much needs national state authorities, since wherever businesses operate, they are in a national setting.

"Business cannot be pursued in chaos or in the absence of a valid legislation or social framework. The main guarantor of these are still, for better or for worse, the nation state. It is also the main vehicle for the expression of the popular will.

"Therefore the nation state should not be counted out. It is not so much under threat as in a process of transition, as it tries to meet the new challenges by building up new forms of security for citizens in the social, environmental and so many other spheres."

Guy de Panafieu, Chairman and Chief Executive Officer of Groupe Bull, turned to the broad economic issues of the new era and said they run a lot deeper than the current dot.com hype.

"The 'New Economy' is a phenomenon viewed by many to be primarily related to Internet and dot.com companies. In fact, the expression was coined in the mid 1990s as observers tried to understand the unprecedented performance of the US economy. Since 1991, growth there has continued at 3.5%-5%, yet inflation has remained low.

"The only plausible explanation for such prolonged non-inflationary economic expansion would of course be substantial productivity gains, possibly due to increased investments in IT.

If this analysis is correct, the 'New Economy' is the result of sustained investments in IT - not just the Internet - enabling companies to transform their operations, drive down costs and achieve major productivity gains. The Internet, of course, has tremendous potential to accelerate this process, but the "New Economy" is more than just new ways of selling over the web to consumers. The challenge of the Internet is the transformation of enterprises."

Yong-Suk Lee, Policy Analyst at the National Computerization Agency, Republic of Korea said there was a tendency for governments and observers to confuse consumer issues with citizen issues in looking at regulation of the Internet, and a proper perspective was needed on each.

"We all wear different hats, one as a citizen, one as a consumer. Appropriate policies for the citizen may be different from appropriate policies for the consumer, and when governments are making policies, it's important to make this distinction.

"For example, when we want companies to make products for the disabled, the logic for the policy would not come from the 'consumer' area but from the 'citizen' area: it probably has little to do with consumer protection but involves protecting the quality of life and basic rights for all citizens, thereby justifying the strongest of government interventions."

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