E-governance and economic growth: measurement and impact

Abstract

E-governance and e-government both refer to the digitalization of government and the use of ICT to serve citizens. However, the concept of e-governance is broader than e-government. It can be defined as a dynamic approach to conducting State activities that aims to set up a digitalized, evolving system connecting State services with their internal (G2G and G2E) and external (G2C and G2B) users, with the purpose of improving the State-society relationship and offering better-quality services. Several authors have shown the positive impact of e-government on economic growth, but most of these studies ignore this difference between e-governance and e- government. Thus, to include different aspects of e-governance, we created a composite e-governance index (EGOVI) using the principal components analysis method (PCA) before studying the impact of the created index on economic growth using a panel standard corrected errors fixed effect model (PCSE) on a panel data set of 76 countries from 2012 to 2020. This study provides empirical evidence of the positive impact of e-governance on economic growth. It was demonstrated that a one unit increase in the e-governance index (EGOVI) leads to a 13,6% increase in GDP per capita.