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Techies in Silicon Valley often tell me that if they do their job right, it should cease to exist. The goal of a lot of technology is to reduce the amount of human labor necessary to get something done. A new study finds that this Silicon Valley maxim holds also true for the government—in a big way.

Min-Soek Pang of Temple University found that for every dollar governments invested in technology, spending decreased by $3.50. “I was surprised with the magnitude of the impact,” said Pang. No joke. 3x is a huge number for any carefully controlled study.

Between 2000 and 2008, Pang analyzed government spending and the portion dedicated to information technology. After controlling for population, debt, grants and other institutions that tend to bloat government, there was a clear relationship between states that invested in tech and lower-than-expected public expenditures.

How This Works In Practice

Here are two fascinating examples of this working in practice.

First, when a mobile provider piloted a program to pay Afghanistan police through direct transfers rather than cash, it dramatically reduced corruption. As cash makes its way to security forces, each courier in the chain skims off the top. With smartphone payments, police officers thought they had unexpectedly been given a 36% raise, when in fact they were just getting paid the full amount.

“250 policemen came and kissed me on both cheeks and I wondered why and they said ‘thanks for giving us a pay rise’,” Karim Khoja, CEO of the Afghanistan mobile operator Roshan, told Mobile World Live.

The Pizza And Beer App

Second, in my backyard, the San Francisco Municipal Transit Agency runs what is arguably the slowest and most expensive transit system in the country, with an average speed of just 8.1 miles per hour and costs of $19.21 per bus-mile driven.

So when the agency wanted build an iPhone app to help SFMTA managers monitor whether buses were arriving on time, it had expected to shell out big bucks for a long-term contract. But in 2011, as an experiment, it worked with local volunteer hackers to build the program.

SFGate described it this way:

The San Francisco Municipal Transportation Agency has every intention of spending a few years and untold dollars creating its own, more robust version of the tool. But the team hacked together the basic parameters of the SMART Muni app in a 48-hour stretch in late July, fueled by pizza and beer.

This is what Pang found. It’s not just investing in gadgets that shrinks government, but investing in tech talent that makes things run better.

Indeed, this is why the government is proposing a significant increase in budget for the newly created United States Digital Service, an internal IT consultancy group. The USDS was created out of the meltdown fiasco, and pays sizable wages to attract top talent from the likes of Google and Facebook, who build out government Web services more efficiently.

The government can shrink itself, if it invests wisely. Read a free version of the study here.

Lead photo by Ken Lund