I was just pointed to an interesting report that Tom Davenport (author of Competing on Analytics) wrote on Strategic Use of Analytics in Government. The report is available on the businessofgovernment.org website. Tom and his co-author do a nice job of summarizing the various ways analytics can and should be used in government.
While there are many interesting topics, I like the uses they discuss around taxes, fraud and other transactional systems. The ability to apply predictive analytics, and even optimization, in the context of individual transactions has huge potential for the government, especially in countries with large populations!
If you are interested, the article of mine that Tom References is Analytics for Tax Collection: From Predictive Models to Optimization
