The Political Economy of GovTech

Abstract

The digitalization of public services, known as GovTech, can disrupt traditional mechanisms to promote economic development (for example, financial inclusion, education, and health care), improve the delivery of public services, and expedite development objectives. For GovTech to be successful in enhancing the public sector's efficiency, transparency, and inclusiveness, its design and implementation require that private interests be aligned with the overarching goal of a "citizen-oriented" digitalization. Because the interests of the state and private providers are often antagonistic, the social dividends from GovTech remain contingent on implementing the appropriate market structure through adequate property rights and regulatory oversight. The Scope of GovTech GovTech involves the use of technology to modernize and transform government operations, decision-making processes, and service delivery to improve government services, transparency, efficiencies, agility with fit-to-purpose technology, and citizen engagement (Amaglobeli and others 2023b). More precisely, GovTech refers to how technology-understood in its largest sense as the link between computer science and its practical applications-can transform government services. GovTech aims to improve how citizens and businesses interact with government services while making the government more efficient, transparent, and agile. Strategies include automating operations and government services and making more data and digital services available across government agencies and to the private sector. GovTech also requires a modification in the way government agencies operate by adopting new ways of thinking about project management (for example, adopting agile approaches), vendor relationships (for example, considering startups and open source), technology adoption (for example, promoting innovation), and data transparency (for example, sharing anonymized data via application programming interfaces). The main forces at play are innovation and control. This note identifies the key actors and institutions in GovTech, proposes a framework for analyzing their interrelation, and outlines policy recommendations to advance GovTech. The note emphasizes the role of the private sector responsible for the technological innovations used by the government. Concurrently, the note highlights the importance of protecting privacy and regulatory oversight so that GovTech remains oriented toward citizens' needs. During the late 19th century and early 20th century, railroads connected communities and unleashed new opportunities for growth and development. Throughout most of the 20th century, highways brought people and markets closer to each other. The 21st century is the era of digitalization. Today, telecommunications, including the internet, can connect even the most remote areas to the global village (Delaporte and Bahia 2022; Amaglobeli and others 2023a). Digitalization can help modernize the state and create enormous growth opportunities. GovTech is the latest step in the state's permanent drive to modernize the public sector. What is already being done includes the supply of the enabling digital public infrastructure (for cloud, digital payment, digital identification, and code repositories), the development of internal systems (for example, digitalization of the revenue administration, expenditure policies, public financial management, and data sharing between administrations), and the development of government-user interfaces (for example, online submission of