On his first full day in office, U.S. President Barack Obama issued an executive memorandum that may someday be seen as signaling the most important shift in how government works in America since the rise of the New Deal.

His subject? Not jobs or health care or the environment, but transparency and open government. In five succinct paragraphs, he promised to create an “unprecedented level of openness in government”, arguing that it would: “strengthen our democracy and promote efficiency and effectiveness in government.”

Most significantly, and in what can only be understood as an explicit tip-of-the-hat to Web 2.0 thinking, he declared that in addition to making government more transparent, it should become more participatory and collaborative:

“Public engagement enhances the government’s effectiveness and improves the quality of its decisions. Knowledge is widely dispersed in society, and public officials benefit from having access to that dispersed knowledge. Executive departments and agencies should offer Americans increased opportunities to participate in policymaking and to provide their government with the benefits of their collective expertise and information… Executive departments and agencies should use innovative tools, methods, and systems to cooperate among themselves, across all levels of government, and with nonprofit organizations, businesses, and individuals in the private sector.”

The language is dry but the message is clear: It is time to replace Big Government and know-it-all bureaucracy with a more inclusive and porous kind of collaborative governance. Could Obama be calling for the federal government to embrace the wisdom of crowds? Signs abound.

First there were the experiments undertaken by his transition team during the weeks after the election and before the inauguration. On Change.gov, the official transition website, visitors were invited to ‘Join the Discussion’ on topics like healthcare reform, the economy, and community service, and rate the comments made by others. Several thousand people participated. Then the transition team launched ‘Open for Discussion’, a gigantic open forum where people were invited to post questions and vote the best ones to the top. Over the course of two rounds, more than 120,000 people voted nearly six million times on more than 85,000 questions. In both cases, top administration officials offered answers to the top-voted issues. Finally, there was the ‘Citizens’ Briefing Book’, an attempt at making sure that at least some iconoclastic ideas from the public made their way directly and unfiltered into the President’s hands. More than 125,000 people voted on more than 44,000 submissions, and several months later, the White House Office of Public Engagement released a 32-page .pdf along with a video showing Obama holding the report.

Then there were Obama’s own declarations about how his approach to government, and in particular the giant spending plan for economic recovery, the major legislative priority of his first months in office, would be informed by direct public participation in the process. In one online video, he told his supporters that this program would be conducted “with unprecedented transparency and accountability”. Clearly aware that his critics were already predicting that Big Government would waste hundreds of billions in taxpayer dollars, he added:

“I’ll appoint an aggressive Inspector General and a cabinet level oversight board to make sure your money is spent wisely. More importantly, I’ll enlist all of you. As soon as this plan is signed into law, Recovery.gov goes live and you’ll be able to see precisely where your tax dollars are going. Because this is your democracy, and as I said throughout the campaign, change never begins from the top down. It begins from the bottom up.”

A day later, selling his recovery plan at a town-hall meeting in economically devastated Elkhart, Indiana, he went further in explaining his vision for crowdsourcing the watchdogging of government spending:

“We’re actually going to set up something called Recovery.gov – this is going to be a special website we set up, that gives you a report on where the money is going in your community, how it’s being spent, how many jobs are being created so that all of you can be the eyes and ears. And if you see that a project is not working the way it’s supposed to, you’ll be able to get on that website and say, ‘You know, I thought this was supposed to be going to school construction but I haven’t noticed any changes being made’. And that will help us track how this money is being spent... The key is that we’re going to have strong oversight and strong transparency to make sure this money isn’t being wasted.”

“I’ll enlist all of you.” “You can be the eyes and ears.” These are the words of someone who clearly understands the power and wisdom of a crowd, and the axiom that all of us are smarter than any one of us.

But it’s one thing for the President to issue memoranda and make statements about involving the public in a fundamentally new way in their government, and another to get government agencies and leaders to actually change how they do business. So far, the implementation of Obama’s vision remains sketchy at best. Recovery.gov, which is meant to play a central role in collecting, displaying and tracking how billions in new monies are spent, is so far just a placeholder of a website. The Inspector General in charge of that program admits it will take at least until the fall before the site contains much detailed information, and no one is really sure whether it will actually enable visitors to look up information as granular as a specific school construction project or report a subcontractor for failing to deliver promised services or jobs.

In terms of involving the public in a meaningful discussion of policy priorities, the Obama administration has clearly chosen to crawl before it walks, let alone runs.

Echoing the experiments on Change.gov, the Recovery.gov office did ask the public for suggestions on how best to structure its data-gathering systems, and it crowdsourced the prioritisation of those comments. More recently, the Office of Management and Budget and the Office of Science and Technology Policy have embarked on a more ambitious ‘open government initiative’, inviting the public to brainstorm recommendations on how to implement Obama’s day – one transparency memorandum. The goal, in the words of Beth Noveck, the deputy chief technology officer for open government, is to create a structured dialogue aimed at the ‘co-creation of government’ with ‘many people participating in the process’. After a week of open consultation, just over 2,000 people had posted about 900 ideas, thousands of comments, and cast 33,000 votes to help rank them. In later stages of the initiative, government experts were slated to lead an in-depth conversation on the WhiteHouse.gov blog about the top suggestions, and then detailed recommendations were to be drafted using a wiki editing platform.

In late March, the White House press office also took at least one big step towards a more interactive approach to the public, holding an ‘online townhall’ on the economy, where for two days anyone could post a question or vote one to the top of the pile. Then Obama held a live webcast from the White House where he pointedly responded to most of the top-voted questions. Nearly 93,000 people submitted more than a hundred thousand questions, and more than 3.6 million votes were cast on them. The event was generally deemed a success, but it hit one discordant note when Obama made fun of the fact that questions about legalising marijuana did surprisingly well in the online voting. “I don’t know what this says about the online audience”, he chuckled, ignoring the fact that somewhere between 40 and 50 per cent of American voters favour the reform.

It remains to be seen just how far the administration will go towards implementing Obama’s vision of change. In part, this is because he is juggling many difficult priorities at once. In part, it’s because he is traveling uncharted territory. And finally, by offering to involve and empower the public in ‘co-creating’ government, Obama is unleashing an inherently disruptive force. As his administration’s early experiments with crowdsourcing have shown, hundreds of thousands of Americans are eager to take up his call to participate in new ways – and that’s without his having pushed hard to publicise the opportunity. What happens when those numbers climb into the millions, and people who have been invited to have a voice now expect to be listened to?

It isn’t just that online collaborative platforms for public input and participation can be gamed, and thus special interest groups or semi-organised pranksters can seemingly hijack such sites to make mischief. Ideally, the more often government enables such interaction to happen, the less meaningful those disruptions will become. It’s only when the chance to participate is kept rare that the value of gaming these sites stays high.

The more difficult issue for advocates of opening up a process of ‘co-creating’ government is what might happen when newly empowered citizens inevitably collide with entrenched interests. Obama’s vision of enlisting the public in a new, socially-conscious and transparent process of improving how government works – “You can be the eyes and ears” – may be exhilarating, but it also may lead to all kinds of unexpected consequences. The subcontractor who is skimming Recovery funds that are supposed to be spent on building that new school may be a cousin of the local mayor, who may be tied to the Democratic Party, or his workers may belong to a construction union that endorsed the President’s election. In other words, local e-democracy, Obama-style, could easily crash head-on into local power politics.

We don’t know yet how this story will play out. But the evolving history of the social web offers one encouraging hint. From Wikipedia to Craigslist to Amazon to Google, the web keeps rewarding those actors who empower ordinary users, eliminate wasteful middlemen, share information openly, and shift power from the centre to the edges. Applying those same principles to government will undoubtedly be messy, but Obama has one thing going for him: it is where technology is already taking us.

Micah L. Sifri is Co-founder and Editor of the Personal Democracy Forum

This essay is one of a collection of viewpoints which will be published to launch NESTA’s ‘Reboot Britain’ programme. Reboot Britain will explore the role new technologies and online networks can play in driving economic growth and radically changing our public services. The programme will begin with a one day event on 6th July which will look at the challenges we face as a country and how the combination of a new digital technologies and networked 'Digital Britons' can produce innovative solutions to tackle them. For more information please visit www.nesta.org.uk