AI public value creation: data encoding, aggregation, and algorithmic computation

Antonio Cordella and Francesco Gualdi

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: AI systems in public administration challenge the premise that value creation arises from managers' strategic mediation among the vertices of Moore's strategic triangle: Public value, legitimacy, and operational capacity. AI imposes new logics that reshape vertices and their interaction dynamics. Critically, these transformations become entrenched through what we term algorithmic public value lock-in: the crystallization of contingent value definitions into durable technical infrastructures resistant to democratic revision. Examining Peru's SISFOH, an algorithmic welfare-targeting system, we reveal three interconnected shifts: data management recasts legitimacy as computational objectivity; standardized classifications redefine public value in narrow, quantifiable terms; and algorithmic processing transforms operational capacity from adaptive discretion to rigid execution. Together,these shifts produce lock-in effects that potentially insulate public value creation from political negotiation.

Keywords: AI in public administration; algorithmic logic; artificial intelligence; data logic; public value (search for similar items in EconPapers)
JEL-codes: J50 (search for similar items in EconPapers)
Date: 2026-06-08
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Published in Public Administration, 8, June, 2026. ISSN: 0033-3298

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