This paper proposes the use of the dynamiccapabilities view of the organization and system dynamics as a modeling technique to understand the core capabilities that local governments need in order to benefit from their use of information and communication technologies, what has been recently called electronic government. Based on two case studies of local governments in Mexico, we propose a preliminary conceptualization of the core capabilities and resources necessary for a successful digital

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... vernment strategy. Our preliminary experiments suggest that a strategic focus on IT standards, processes, and people has a higher pay-off than a focus on IT infrastructure and systems.