## How e-Government Services Can Pay Dividends

_IMF Blog, February 11, 2021_

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## Bibliographic details
- Authors: Ali Al-Sadiq
- Published: February 11, 2021

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### Key findings from IMF staff research
- The accessibility of government information and services online is linked to the volume of foreign direct investment (FDI) a country receives.
- A review of FDI inflows in 178 host countries over a period of roughly 16 years finds that the presence of e-government services appears to stimulate the inflow of foreign direct investment.
- Countries that implement and adopt strong information and communication technologies, regardless of their level of development, are found to attract more inflows compared to countries with weaker internet access.
- The positive connection between e-government and foreign direct investment is visually apparent in the research "chart of the week."

### Digital divide and distributional issues
- The findings expose a potential point of divergence: the global digital divide and technological disparities between higher- and lower-income economies.
- Many people worldwide still do not have access to the internet.
- According to the 2020 United Nations’ E-Government Development Index:
  - About half of the 193 countries covered by the index score below the world average of 0.60.
  - The average index score for countries in Africa is almost one-third lower than the index average.
- Denmark, the Republic of Korea, and Estonia lead the world in providing e-government services and electronic dissemination of information.
- Several developing countries—including Bhutan, Bangladesh, and Cambodia—have advanced from the middle group of countries in the index to become some of the highest ranked among developing countries in 2020.

### Policy implications and recommendations
- Countries should focus on the development of e-government services as part of their strategy for attracting more foreign direct investment.
- To reduce the divide between higher- and lower-income economies and provide digital services to all people, governments need to:
  - Push for better information and communications technology infrastructure (a critical component for effective e-government services).
  - Work to make the internet accessible, affordable, and secure to all.

### Contextual relevance during COVID-19
- The ability to renew a passport or driver’s license, pay a tax bill, or access government data online—anytime and anywhere—has grown more important during the COVID-19 pandemic to prevent the spread of the virus.
- The pandemic is likely to strengthen the positive impact of e-government on FDI as governments push to provide more services and information online.

*Source: How e-Government Services Can Pay Dividends, Ali Al-Sadiq, February 11, 2021*

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## References

- [IMF staff research](https://www.imf.org/en/Publications/WP/Issues/2021/01/15/The-Role-of-E-Government-in-Promoting-Foreign-Direct-Investment-Inflows-49981)

_Source: https://www.imf.org/en/blogs/articles/2021/02/11/how-e-government-services-can-pay-dividends_