Digital Infrastructure

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Finance ministries should treat digital public infrastructure (DPI)—digital IDs, payments, data exchange platforms, credentials, and shared services—as long-term, shared infrastructure analogous to roads and power grids.
Current practice: fragmented, siloed IT spending leads to duplicated systems, reduced interoperability, higher costs, and weaker state capacity to respond to emerging problems.
Two required conceptual shifts:
- Economic: DPI connects institutions and multiplies value over time (example: India’s Aadhaar lowered know-your-customer costs and fueled cell phone adoption).
- State capacity: DPI requires government-wide capabilities to connect datasets and deliver speedy, effective, frictionless services.
Finance ministries have fiscal and coordinating authority that can convert software into infrastructure through strategic stewardship, not merely fiscal oversight.

Global DPI mapping (University College London) identifies:
- "over 64 national digital identity programs"
- "97 digital payment systems"
- "103 data exchange platforms with infrastructure-like potential"
Only "about half of national ID systems are used by more than two public services."
"South Africa has eight national data exchange platforms operating in isolation."
Workshops were held "with treasury and finance officials from over 50 countries."
Example outcomes:
- Malawi improved credit markets after introducing biometric identification, reducing default risk and expanding credit access.
- U.S. Paycheck Protection Program allocation: "$800 billion"; only "between a quarter and a third" of those resources reached the workers most in need (analysis by David Autor and colleagues).
Common problems with current appraisal and budgeting:
- Traditional cost-benefit analysis fails to capture long-term, cross-sector spillovers, distributional aspects, and system linkages.
- DPI spending is often dispersed across many budget lines, complicating long-term planning.
- Donor-driven projects risk lacking clear plans for long-term funding.

Coordination: finance ministries often act reactively—“We’re goalkeepers, not strikers”—lacking authority to shape digital strategies from the outset.
Financing: political and budgetary pressures favor quick wins over the long-term investments DPI needs.
Appraisal: difficulty projecting returns when value comes from indirect effects (better services, reduced leakage, new capabilities).
Institutional: digital ministries typically lack budget control, authority to coordinate across ministries, and leverage to enforce shared standards.

Evaluator: assess digital proposals for infrastructural potential (example: GOV.UK Notify as a benchmark).
Coordinator and enforcer: use budget and procurement to align investments, veto duplication, and promote shared platforms (example: Uganda’s programmatic budgeting model; procurement clearance by national IT regulator).
Implementer/steward: in some cases take on full implementation of core DPI components (example: CamDX in Cambodia).
These roles form a spectrum; ministries need not build DPI but must shape incentives, standards, and conditions for success.

Embed DPI considerations in public investment management frameworks and multiyear budgeting plans.
Use programmatic budgeting and procurement rules to:
- Flag and prevent overlapping proposals.
- Require clearance from technical regulators to reinforce standards and usability.
Prioritize early, visible applications and successes to build momentum, while recognizing broader benefits may take years.
Reorient appraisal methods beyond traditional cost-benefit analysis to capture long-term, cross-sectoral spillovers and distributional impacts.
Align financing arrangements to support long-term maintenance, upgrades, and governance of DPI rather than one-off donor projects.
Treat DPI as a public asset requiring strategic stewardship to maintain public trust and avoid systems that reinforce surveillance or increase administrative burdens.

India: Aadhaar delivered direct efficiency savings, reduced fraud and benefit claims, lowered compliance costs for financial institutions, and expanded access to credit.
Malawi: biometric identification improved lenders’ ability to verify borrowers, reducing default risk and expanding credit access for marginalized groups.
United Kingdom: GOV.UK Notify, GOV.UK Pay, and GOV.UK One Login represent shared government services prompting appraisal and financing debates.
Uganda: Ministry of Finance and National Planning Authority’s programmatic budgeting requires agencies to submit IT needs collectively; procurement clearance by national IT regulator enforces standards.
Cambodia: CamDX began with business registration and expanded into broader data exchange functionality.

DPI’s largest economic impact comes from enabling broader economic activities and reshaping markets over time, not just immediate cost savings.
Continued fragmentation risks higher long-term costs, reduced government adaptability, weakened public trust, and costly failures during crises.
Without finance ministry leadership, DPI risks becoming "a graveyard of pilot projects too fragmented and expensive to sustain."

Source: F&D Magazine, "Digital Infrastructure", Diane Coyle; David Eaves; Beatriz Vasconcellos; March 2026.

Digital Infrastructure
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- Digital Infrastructure (PDF)