Governing with AI: Why Public Institutions Must Get It Right*

Introduction: A New Frontier for Governments

Artificial Intelligence (AI) is no longer a frontier technology reserved for research labs or tech giants—it is becoming part of the everyday machinery of government. From tax enforcement to traffic management, from allocating welfare benefits to processing immigration claims, AI is quietly reshaping how states interact with their citizens.

The OECD’s comprehensive report” Governing with Artificial Intelligence (2025)” brings this reality into focus. Its message is clear: governments are uniquely positioned to unlock AI’s potential for better, faster, fairer public services—but they also carry a heavy burden. A poorly governed AI system in the private sector can hurt customers; a poorly governed AI system in the public sector can undermine democratic legitimacy itself.

This blog unpacks the OECD’s findings and places them in the context of education, leadership, and institutional development—the areas where GRG Education works every day.

1. The State of Play: Where AI Is Already in Government

The OECD shows that AI has moved far beyond pilot projects. Some of the most common applications include:

• Tax and revenue collection – algorithms detect fraud, flag anomalies, and accelerate refunds.

• Employment and welfare services – AI matches jobseekers to vacancies, automates benefit eligibility checks, and forecasts labor trends.

• Public safety and security – facial recognition, predictive policing, and surveillance raise both efficiency and ethical concerns.

• Citizen services – chatbots answer routine queries, guide users through administrative processes, and reduce call-center burdens.

This diversity of use shows AI’s promise, but also makes clear the fragmented and uneven nature of adoption. Some agencies are advanced; others lack capacity; few operate within coherent national frameworks.

2. The Core Challenges Identified by OECD

a) Trust and Legitimacy

Governments exist on the basis of trust. When citizens feel AI systems are opaque or unfair, resistance can escalate quickly. The report emphasizes that transparency and accountability are not optional—they are preconditions for sustainable use.

b) Bias and Discrimination

Algorithms learn from data, and data reflects historical inequalities. In welfare allocation or criminal justice, this can amplify existing injustices. The OECD warns that safeguards are currently inconsistent and insufficient.

c) Vendor Dependence

Many governments rely heavily on private vendors, importing “black box” systems they cannot fully explain or control. This risks dependency, lack of sovereignty, and limited bargaining power.

d) Fragmented Regulation

AI development moves faster than lawmaking. As a result, ministries and agencies adopt tools without unified guidance, leading to uneven risk management.

e) Capacity Gaps

Public servants often lack the training to critically evaluate AI systems, manage contracts, or anticipate long-term social impacts. The report is blunt: capacity building is as important as technology procurement.

3. The Opportunities if Governments Get It Right

Despite the risks, the OECD report highlights enormous upside potential. Governments that adopt AI wisely can deliver:

• Efficiency at scale – faster tax processing, shorter waiting times, streamlined paperwork.

• Better policy design – AI tools can simulate policy outcomes, anticipate economic shifts, and model complex systems like healthcare or climate.

• Targeted services – personalized employment support, adaptive learning in education, early detection in healthcare.

• Transparency and openness – explainable AI can enhance citizen understanding if governments commit to disclosure and participation.

Crucially, the OECD frames AI not just as a technical upgrade, but as an opportunity to reimagine governance: more responsive, data-informed, and citizen-centered.

4. What This Means for Higher Education and Leadership Development

 For GRG Education the OECD findings land close to home. Training future leaders for an AI-enabled world requires more than coding classes or technical workshops. It requires a relentless focus on governance and ethics.

Key areas where higher education can step up:

• Public Policy Schools – integrate AI governance frameworks, case studies, and regulatory approaches into core curricula.

• Medical and Health Sciences – prepare doctors and nurses to interact with AI diagnostic tools responsibly.

• Business and Law Programs – equip students to negotiate AI contracts, evaluate risks, and ensure compliance with evolving laws.

• Executive Education – give managers and civil servants practical toolkits for leading AI adoption responsibly.

Universities can also act as neutral conveners: bringing together governments, private firms, and civil society to test pilot projects in controlled environments before scaling them nationally.

5. OECD Recommendations: A Practical Guide

The OECD lays out a set of recommendations that can serve as a roadmap for governments and their partners. Summarized for a practitioner audience:

1. Develop coherent national AI strategies that integrate ethics, regulation, and capacity-building.

2. Institutionalize transparency and accountability through explainable AI, citizen communication, and open data standards.

3. Invest in public-sector capacity: training, upskilling, and recruitment of AI-literate staff.

4. Strengthen procurement rules so governments do not become hostages to proprietary vendor solutions.

5. Encourage international cooperation—since AI systems cross borders, so must governance.

6. Create feedback loops—citizen oversight, audits, and independent review bodies.

6. Why This Matters for the Global South and Emerging Economies

While the OECD report primarily reflects member states, the stakes are even higher in emerging economies. Weak institutions combined with aggressive vendor marketing can create “AI colonialism”: imported systems that shape lives without local adaptation. For Latin America, Africa, and South Asia, the challenge is to build sovereign capacity—not just adopt systems but govern them.

Here, international partnerships (including universities with global reach like the Jesuit network) can play a vital role in bridging knowledge gaps and ensuring adoption does not outpace governance.

7. GRG Education Perspective: Building a Virtuous Cycle

At GRG Education, we see three levels of intervention where higher education providers can align with the OECD’s vision:

• Curriculum Design – embed AI governance into law, policy, medicine, and business programs.

• Leadership Training – help public officials develop both the technical literacy and ethical compass to manage AI adoption.

• Applied Research – partner with governments to evaluate pilot programs, identify risks, and document lessons.

This creates a virtuous cycle: better governance → stronger trust → wider adoption → richer data → improved AI systems.

Conclusion: Governing with AI Is About Governing Ourselves

The OECD’s Governing with Artificial Intelligence report makes one point abundantly clear: AI governance is not just about algorithms, it is about democracy itself. Governments cannot afford to abdicate responsibility to vendors or let adoption run ahead of oversight.

For higher education leaders and faculty this is both a challenge and an opportunity. By equipping the next generation of professionals with the skills to govern AI wisely, we can ensure that technology serves citizens, strengthens institutions, and reinforces—not erodes—trust in public life.

*Text developed with AI assistance.