After reluctance in the 1990s, Germany finally, in the early 2000s, actively began to pursue the modernization
of its administration through online government. The federal initiative “Bund online 2005” with
an investment volume of 800 million Euro was one of the largest government online projects worldwide.
Other initiatives, like BayernOnline in the economically most dynamic German state, Bavaria, started
on the regional level. Nevertheless, in international studies Germany regularly scored moderately in
“e-readiness.” The focus on services for citizens and the neglect of business services, especially on
the federal level, is one of the reasons. A second reason is a lack of modernization, when bureaucratic
procedures are merely digitalized instead of using digitalization for reform. A third challenge is the
complicated interaction of various levels of government in a federal state. This chapter first gives a
short overview over e-government initiatives and results in Germany. Afterwards, the e-government
initiative of Bavaria, “BayernOnline” is presented. Then, the problems of e-government in Germany
(neglect of e-government options for business, lack of modernization, compatibility and competition in
a federal state) are discussed, followed by a discussion of e-government as one instrument to contribute
to a solution of economic problems in Germany. Finally, a view ex-post looks at the results of the “Bund
online 2005” initiative and how it helped to overcome bureaucratic inertia in Germany. E-federalism,
the interplay of the introduction of e-government on different (federal, regional and local) levels of government
certainly needs a balance of competition and cooperation, but should not be seen as a problem
for the introduction of e-government per se, but rather as a chance for fruitful competition for the best
concepts of e-government.