## Inclusive GovTech: Enhancing Efficiency and Equity Through Public Service Digitalization

_IMF Working Papers, October 27, 2023_

## Source details

**Canonical URL:** [Inclusive GovTech: Enhancing Efficiency and Equity Through Public Service Digitalization](https://www.imf.org/en/publications/wp/issues/2023/10/27/inclusive-govtech-enhancing-efficiency-and-equity-through-public-service-digitalization-540984)

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## Bibliographic details
- Authors: Manabu Nose
- Published: October 27, 2023
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400258626.001

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### Summary findings
- Introduction of digital budget payments and e-procurement could significantly enhance budget transparency.
- Digital budget payments and e-procurement can help expand the coverage of social assistance to reach the most vulnerable population.
- Exploiting staggered adoption of digital budget payments, a synthetic control regression identifies meaningful increase in pre-tax income shares among the bottom 50th percentile and female workers.
- Effects are especially pronounced for emerging market and developing countries, with effects materializing gradually over a 10-year period.
- Reduction in business informality is identified as a primary channel driving equity benefits.

### Evidence and methodology
- Primary empirical approaches: event-study method and synthetic control regression.
- Identification strategy: exploits staggered adoption of digital budget payments across jurisdictions.

### Mechanisms and constraints
- Primary channel for equity gains: reduction in business informality.
- Constraints and necessary complements:
  - Supporting policies and regulations.
  - Organizational and system integration.
  - Robust digital connectivity.
  - Inter-agency coordination, with a dedicated GovTech institution facilitating coordination, is critical to realize efficiency and equity gains.
- Warning: Mere adoption of GovTech strategies or digital technologies is insufficient to unlock full potential without the above complements.

### Policy implications and recommendations
- Prioritize inter-agency coordination mechanisms, potentially through a dedicated GovTech institution, to maximize GovTech impact on efficiency and equity.
- Pair GovTech adoption with supporting policies, regulations, and organizational/system integration efforts.
- Strengthen digital connectivity to ensure inclusive reach of digital budget payments and e-procurement.
- Design GovTech implementations with explicit objectives to reduce business informality to capture distributional benefits.

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## Content in this bundle

- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2023/10/27/inclusive-govtech-enhancing-efficiency-and-equity-through-public-service-digitalization-540984_