Realizing collaborative government-to-business business models: the case of the authorized economic operator

Building collaborative relationships with trusted businesses is a long-term strategy for EU governments. Recently, the realisation of this goal has become more visible with the emerging concept of the Authorised Economic Operator (AEO). Businesses in the member states can apply for the AEO certificate from government. The aim for granting AEO is to create possible 'win-win' situation with increased trade efficiency and lowered administrative burden. However, without proper selection mechanism, this policy can be misunderstood/misused due to asymmetric information between the government and businesses. In this paper, we focus on modelling the cause and effect of the adverse selection in the Government-to-Business (G2B) relationship building. We argue that an IT-enabled risk assessment approach can effectively eliminate the G2B information asymmetry and solve the adverse selection problem. The business model of AEO assessment is built to give a real-life example on how IT-enabled risk management approach can help with collaborative G2B relationships building. © 2010 Inderscience Enterprises Ltd.