The main argument of this paper is that in many situations, dicult puzzles of governance can be solved in dramatically new ways using modern IT systems. Nationwide centralised databases, coupled with ubiquitous high-speed Internet access, and pervasive computational power, has put a new set of solutions within reach in India. Three areas of impact can be identified: removing discretion, improving transparency, and reducing the cost per transaction. The most difficult puzzles of governance are those of building human-intensive public services which are transaction-intensive and discretionary. The arguments of this paper suggest that in a certain class of situations, discretion can be reduced, and transparency can be improved, thus easing the principal-agent problems that afflict public administration.
