## Digital Infrastructure

## Source details

**Canonical URL:** [Digital Infrastructure](https://www.imf.org/en/publications/fandd/issues/2026/03/digital-infrastructure-diane-coyle)

## Other formats

- [Markdown version](/en/publications/fandd/issues/2026/03/digital-infrastructure-diane-coyle/index.md)
- [Structured JSON version](/en/publications/fandd/issues/2026/03/digital-infrastructure-diane-coyle/index.json)
- [Bundle manifest](/en/publications/fandd/issues/2026/03/digital-infrastructure-diane-coyle/bundle-manifest.json)

## Bibliographic details
- Authors: Diane Coyle, DAVID EAVES, BEATRIZ VASCONCELLOS
- Published: March 3, 2026

---

### Executive summary
- 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.

### Key findings and data points
- 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.

### Barriers identified
- 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.

### Emerging roles for finance ministries
- 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.

### Policy recommendations and implementation priorities
- 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.

### Examples and illustrative cases
- 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.

### Strategic rationale and risks
- 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.*

---

## Content in this bundle

- **Digital Infrastructure**
  - [Digital Infrastructure (Markdown version)](/-/media/files/publications/fandd/article/2026/03/coyle.pdf.md){rel="alternate" type="text/markdown"}
  - [Digital Infrastructure (PDF)](/-/media/files/publications/fandd/article/2026/03/coyle.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/fandd/issues/2026/03/digital-infrastructure-diane-coyle_