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Poor governance is among the most important causes of state failure and underdevelopment. Hence innovations and reforms in the governmental and bureaucratic apparatus are an important prerequisite for development. E-government policy initiatives have gained international validity by the donor community as a catalyst for such reforms. To be sure, the characteristics of the state model implicit in e-government applications and the economics of transition from a backward state organization to e-government are equally relevant for the success of the initiative. This study focuses on the analysis and early design of e-government solutions in a less-developed country: Jordan. It shows that implementing a general standardized ICT portfolio to support good governance proves to be a difficult task and that there are a number of risks emerging from development aid policies aimed at good governance. The paper provides suggestive evidence that e-government and the view of the minimal state put forward by international development agencies might not be conducive to rapid late development. The New Institutional Economics provides an illuminating framework for this purpose. C 2005 Wiley Periodicals, Inc.