Reputation, Lemons and Government

This is a mirror of some thoughts I posted at the Wikinomics site today. Given the GovLoop audience I’d love to get your thoughts on this topic – has it got legs? Interally? Externally to citizens? Share your thoughts!


We’re all familiar with the concrept of reputation and how in a world of social networks, voting and rank, it’s becoming increasingly important.

That’s not, however, to say that it’s a new concept. Information asymmetry in commerce is a centuries old problem. Solving it through reputation is equally ancient. We may associate eBay with our modern definition of online reputation but the concept is perhaps earliest associated by archival records of trading between Maghribi merchants in the 11the century. Research on these early economic transactions show that the key to curtailing “opportunistic behaviour and promoting trust between agents” in an environment of high information asymmetry was a system of reputations that was developed and shared between the agents within a trading coalition or network.

Like on eBay, success for the seller rested upon the fear of exclusion from the trading network – thus promoting honest behaviour and fair trading amongst Maghribi merchants.

Fast forward to today and we’re all aware of the use of rankings and feedbacks to vet the quality of a buyer or seller on eBay, or rank the quality of submissions from participants in communities like Wikipedia, Sermo or World of Warcraft.

But can we take this concept of applying cheap and available reputation information to offset quality and reliability problems in Government?

This concept of information asymmetry can perhaps be applied to the relationship between governing and governed. A citizen votes and pays their taxes but their ability to see into the machine, and provide feedback, is quite limited. And if services fall short of expectations there is likely no tangible recourse for this citizen. So how do “lemons” get judged in such an environment, in particular in environments with little to no competition?

Ultimately, one can vote to change governments due to dissatisfaction, but this occurs at a much more macro level than the day-to-day transactions that account for the highest share of governed/governing touchpoints. Moreover, as a highly placed Federal government colleague told us on the topic of innovation: “Our incentives for change are very different – we aren’t going to go out of business anytime soon.”

Indeed, the bottom line is unlikely to motivate better customer service in these front-line government relationships. But what will? And might some type of transparent reputational index around service delivery satisfaction be part of the answer? Could a system like TheyWorkForYou be adapted for externally facing service delivery with reputation and ranking added to the system? Or could incentives be attached to the feedback and rankings developed at sites such as Patient Opinion to incent change? Where else might this be applied? Or is it best applied internally?

I’d love to hear your thoughts.

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Hugh Davidson

How bazaar! (little kiwi inside joke there)

David Weinberger was just blogging about reputational democracy today:

This was after comments around the idea of a possible Obama/whitehouse blog and how the deluge of comments and suggestions might be handled on a previous post.

Im totally for it as long as it can be self organising at the structural level (or value attributing analytical level) which would require some very clever information architecture in order to allow transparency to nurture accessible analysis of face validity.

It would also require supporting structures at a local level i think that are only loosely associated with it in order to allow consensus to be influenced by community and personal relationship factors and not just internet mediated relationships. Augment the social structures we already employ to derive our opinions.

This is a very interesting question and i think people who chase the idea of gov 2.0 like myself must think about things like this very carefully.

Don’t think much of the idea of service delivery satisfaction index, it’s not the kind of focus that would potentiate productive mindsets (ends up being quite negatively biased) but this is from my experience in service design in govt in New Zealand so might not generalise.
I would focus on suggestions and proposals rather than people and existing services.

Great post and im a big fan of wikinomics!

Dan Herman

Thanks Hugh, I’ll check out Weinberger’s post.

I definitely see your point re: negative bias but wonder if connected to the right set of incentives and ability to innovate, might spur the right change in people, culture and service.

That said – the focus on suggestions, ideation, and proposals is definitely step 1. We’re seeing this in several jurisdictions to different degrees of effectiveness and real, transparent, process changing collaboration (Future Melbourne is a great example of real process change). But in general it’s the low hanging fruit of Gov 2.0.

We’ve spoken to several people in NZ – a lot of very cool stuff happening via SSC etc.

Thanks again!


Good post Dan. I’ve noticed most gov’t agencies don’t use any sort of reputational indexes. At a previous agency, we wrote reports for the public. I always asked why don’t we highlight the top 10 most download, or 10 most read – as a way of giving some recognition to stellar reports at work more than just “the boss liked it.”

Another interesting example was “The Best Places to Work in U.S. Federal Gov’t” created by American University with Partnership for Public Service. By putting agencies reputation online, there have been swift changes in many agencies to jump up the list. Much like university and U.S. News and World Report rankings.

People do pay attention to reputation so it is a good mechanism for change. Now who should create the reputation mechanisms (government, non-gov’t) is another question.