Innovations in digital government as business facilitators: international evidence and implications for Portugal

Administrative and regulatory burden reduction has become a priority to improve governmental efficiency and economic competitiveness. Innovations in government through Information Communication Technologies are seen as key tools in designing policies to achieve those goals. Although Portugal has been improving in the business environment and electronic government development indicators and considered a top reformer in some international reports, it is still far from the best-performing countries in several dimensions.

Using a large panel dataset, covering 174 countries from 2004 to 2016, we investigate a possible contribution of innovations in digital governments to facilitate business,and extract implications for Portugal. The development of digital government is proxied by the United Nations’ Electronic Government Development Index, while the business environment is proxied by the World Bank’s Ease of Doing Business indicators. The empirical results suggest that progress in digital government may contribute to the creation of a more business-friendly environment in several areas, particularly when starting a business, dealing with construction permits, getting electricity, paying taxes, getting credit, trading across borders, and protecting minority investors.

Among the components of the Ease of Doing Business indicators, Portugal is often below the best-performing countries in those that measure the number of procedures, time, and costs required to fulfil regulatory obligations, as well as in transparency-related indicators. These are topics where we can easily foresee a decisive role of electronic government. In a constantly evolving world, in which only the most innovative remain competitive, governments can play a strategic role as business facilitators.

Click here to go to the paper by João Martins and Linda Veiga.