A Cost-Benefit Analysis of the Seoul OPEN System: Policy Lessons for Electronic Government Projects

This paper uses a case study to illustrate how political bias in cost-benefit analysis (CBA) affected an electronic government project, the OPEN System, in Seoul, Korea. A conceptual cost-benefit framework is developed to comprehensively assess the costs and benefits categories associated with electronic government projects, and to compare it against the politically biased analysis. CBA depends largely upon analysts´ view on the costs and benefits of a project. Most electronic government projects are analyzed by the politicians´ view, which can depart from the normative assumptions of standard CBA to reflect the viewpoints of affected key constituencies. This biased view tends to inflate benefits and to underestimate costs by ignoring major costs. By comparing the two CBAs with different viewpoints, I am able to show how politicians´ lens erroneously analyzes electronic government projects, overlooking key issues, such as security, privacy, and equity (digital divide).