Traditionally slow to change, bureaucratic in decision-making and constantly under public scrutiny, governments are ripe for new collaborative technologies, says Anthony Williams, co-author with Don Tapscott of the groundbreaking book Wikinomics: How Mass Collaboration Changes Everything (Portfolio, 2007). That book detailed how Web 2.0 technologies such as blogs, wikis and social networking would radically transform business models and alter the way organizations think about collaborative relationships.

These days, Williams, vice president and executive editor at the international business innovation think tank New Paradigm, and Tapscott, its CEO, have set their sights on what they call “Government 2.0: Wikinomics, Government and Democracy.” Williams says the Web offers the public sector huge opportunities to collaborate with citizens. He foresees Web 2.0 technologies being employed to transform service delivery, make smarter policies, flatten silos and, most importantly, reinvigorate democracy.

That’s a tall order, but Williams predicts a shift “from monolithic government agencies to pluralistic, networked governance Webs that fuse the knowledge, skills and resources of the masses.” He recently spoke with CIO Insight contributor Paula Klein. What follows is an edited, condensed transcript of that conversation.

CIO Insight: What’s the state of e-government in 2008?

Williams: Governments had invested heavily in moving public services online for well over a decade. E-government pioneers had hoped that their efforts would help usher in sweeping changes in the way governments are organized, their relationships with citizens and the policy-making process.

However, for a variety of reasons, these broader transformative initiatives have stalled in many jurisdictions, and much of the revolutionary promise never materialized. It turns out that transforming the deeper structures is a pretty intractable challenge, and there are often more penalties than incentives for innovative behavior.

We feel there is sufficient appetite for innovation in the public sector, and there are many promising Web 2.0 pilot projects and experiments already launched. We want to help give new purpose and direction to e-government initiatives over the next five to 10 years.

Are there many differences between Web 2.0 use in the public and private sectors?

Williams: Perhaps the obvious difference is that businesses have customers and employees, but the public sector also has citizens, who are much like shareholders. Citizens and shareholders are similar, but the citizen relationship is arguably deeper: It implies a set of rights and freedoms, as well as a set of obligations and responsibilities to the state.

The sectors also differ in how Web 2.0 can be used. Businesses and governments both worry about security when they deploy these tools, but there’s a political aspect that the public sector has to be concerned about, too. Opposition parties are eager to pounce on any missteps and, as a result, there’s less tolerance for failure in government than in the private sector, where people accept risk-taking as a precondition for innovation. Governments tend to be more cautious about Web 2.0 use and, given their unique constraints, that caution is somewhat understandable.