E-Government in the American States 549 Examining the rankings of American states in one fast- growing policy area, e-government, states with the most sophisticated and comprehensive policies varied over a five-year period. What factors account for change in digi- tal government policy innovation over time? Using time- series analysis and 50-state data, the authors find that state institutional capacity is important for continued innovation. hey also find an association between rein- vention in state governments and the institutionalization of information technology, suggesting a more general ori- entation toward government reform and modernization. Although state wealth and education were not significant in previous studies, they emerge as predictors of later in- novation. he theoretical contribution of this study is to better understand the dynamic character of innovation over time and the role of institutions. he link between reinvention and e-government raises the possibility that the modernization of state institutions generally facili- tates innovation. D o those who are early leaders in a field sus- tain a position of innovation over time? What role do institutions play in promoting continued innovation? Examining the rankings of states in one fast-growing policy area, e-government, we can easily see that the set of states with the most sophisticated and comprehensive policies has shifted over time. his study examines the development of e-govern- ment in the 50 states over a period of five years and asks what factors contribute to sustained innovation. Drawing on cross-sectional time-series analysis (rather than event history analysis), this research conceptual- izes and measures the relative degree of innovation over time. Researchers often measure policy innova- tion by the timing of adoption (Berry and Berry 1990; Gray 1973; Walker 1969), but early adoption is only one dimension of innovation. he quality of the policies that are developed—their scope, their sophis- tication, and whether adopters continue to keep pace with state-of-the art developments in the field—are surely important dimensions of innovation as well. We suggest that examining implementation and insti- tutionalization over time may reveal a deeper under- standing of innovation in the American states. One possible aspect of change is the development of new institutions. One of the unique contributions of this study is to measure and test the importance of state institutional capacity in the form of new bureau- cratic agencies, state legislative committees, and rules and procedures. We also examine the forces that lead to the creation of facilitating institutions in this policy area. heoretically, our study builds on a long tradi- tion of research that argues that formal and informal institutions matter and shape public policy (March and Olsen 1984; Peters 2005; Steinmo 1996; Steinmo, helen, and Longstreth 1992; helen and Steinmo 1992; Weaver and Rockman 1993). hus, we seek not only to contribute to the literature on digital government and state policy innovations but also to provide a window into the role of institutions in policy innovation and change. Building on earlier research on e-government in the American states (McNeal et al. 2003; West 2005), we observe the importance of new institutions (which were not examined before), as well as some traditional indicators of innovation such as state wealth and education, which were not significant in earlier re- search. We find that the creation of new institutions for e-government is associated with reinvention re- forms, suggesting further motivation for innovation. his is consistent with the history of e-government at the federal level as a product of reinventing govern- ment reforms, but this is the first time that generaliz- able evidence for this association has been uncovered at the state level. We begin by describing e-government and the rel- evance of the literature on innovation for understand- ing its development. Next, we conduct a statistical analysis using indices of e-government scope/imple- mentation compiled by Darrell West of Brown Uni- versity. As we find that institutions are important for Caroline J. Tolbert University of Iowa Karen Mossberger University of Illinois at Chicago Ramona McNeal University of Northern Iowa Institutions, Policy Innovation, and E-Government in the American States Caroline J. Tolbert is an associate professor of political science at the University of Iowa. Her research examines state politics and policy, e-government and governance policy, technology and electoral politics, voting and elections, direct democracy, and inequality, including race/ ethnicity. She is the coauthor of Virtual Inequality: Beyond the Digital Divide (Georgetown University Press, 2003) and Educated by Initiative: The Effects of Direct Democracy on Citizens and Political Organizations (University of Michigan Press, 2004) and coeditor of Citizens as Legislators: Direct Democracy in the United States (Ohio State University Press, 1998). E-mail: caroline-tolbert@uiowa.edu Karen Mossberger is an associate professor in the Graduate Program in Public Administration at the University of Illinois at Chicago. Her research interests include e- government, digital inequality, policy innovation and diffusion, urban policy, local governance, and economic development. She is the coauthor of Virtual Inequality: Beyond the Digital Divide and Digital Citizenship: The Internet, Society and Partici- pation (MIT Press, 2008) with Caroline Tolbert and Ramona McNeal. E-mail: mossberg@uic.edu Ramona McNeal is an assistant professor in the Department of Political Science at the University of Northern Iowa. Her chief research interest is the impact of technology on political participation, including its relationship to voting, elections, public opinion, and interest group activities. She also studies e-government and telecommunication policy. She has published work in Social Science Quarterly, Political Research Quarterly, and State Politics and Policy Quarterly. E-mail: ramona.mcneal@uni.edu New Perspectives on E-Government