Digital Strategy Performance Differential Between Government and Private Sector: An New Institutional Economics Perspective

In recent times, a strong emphasis is placed on developing a cohesive strategy for achieving various digital transformation goals. Hitherto confined to the private sector, various Governments are also embracing the use of a formal strategy to pursue their digital e-governance goals. However, in practice, the performance outcome between them differs during such strategic interventions. Using new institutional economics theoretical perspectives, we argue that the performance differentials are primarily due to the institutional environment difference between them. The Government and private belong to distinct property regimes with differences in transaction cost and agency related costs, in turn leading to differences in performance outcomes. We derive a set of four propositions around antecedents of performance, viz. (a) stakeholder accountability, (b) agility, (c) innovation and (d) commitment to completion. We conclude by asserting the need to adopt separate yardsticks to measure the performance of strategic interventions between the two property regimes.