David Eaves on the promise and pitfalls of digital government
OVER THE past decade a small but growing number of governments have begun to challenge the assumption that the state is no good at deploying technology at scale. By treating some digital services as public infrastructure, countries from tiny Estonia to giants such as India and Brazil are reimagining what sovereignty and state capacity could look like in a world of bits and bytes. These trailblazers have developed complex digital systems to manage identity records, make payments, share medical data and so on, and leaders of other countries are taking note. Since the pandemic, more than 50 countries have asked the World Bank for technical support and funding to build more robust digital-public-infrastructure (DPI) systems. Reconceiving public services by digitising them is in many ways a logical extension of the states long-standing role in physical infrastructure. Digital identity, data exchanges and financial plumbing have become crucial to the functioning of society and commerce. For centuries the same has been true of actual plumbing, roads and the likeas well as, more recently, electricity and telecommunications. Governments regulate or own these services to prioritise access and prevent rent extraction. These priorities take on greater urgency when coupled with a 21st-century phenomenon: a loss of confidence in the tech sector generally and big tech specifically. Emerging markets worry about data colonisation, whereby, as large foreign companies collect ever more data, they stretch their lead in innovation, further increasing inequality between countries. Even in mature markets such as America and the EU, the power tech giants have amassed stirs unease. One example of the new government-led digital infrastructure is PIX, a Brazilian system that enables real-time, virtually free financial transactions. Launched in 2020, the scheme has already been used by four-fifths of Brazilian adults to make payments. But PIX isnt a fintech startup; it is operated by Brazils central bank. PIX was partly inspired by UPI, Indias state-run instant-payments system, which allows users to send money to anyone, regardless of which bank or financial app they are signed up to. Along with Aadhaar, a digital-ID system, UPI has dramatically increased the financial connectivity of Indias poorer consumers and small businesses. Meanwhile, Estonias digital-ID and X-Road systemsthe latter of which eases data exchange between public and private organisationshave streamlined access to government services, made them more efficient and boosted Estonias economic competitiveness. Yet while some countries see DPI primarily as a way to improve economic efficiency and inclusion, others view it as a security priority. The quick exit of Visa and Mastercard from Russia after the invasion of Ukraine led some countries to conclude that they need alternative domestic-payment systems, shielded from the whims of foreign governments. Tellingly, India, which has maintained a neutral stance on the Russia-Ukraine conflict, has made much of the code that powers its DPI freely available, seemingly because it sees soft-power benefits in doing so. As large economies from India and America to China and Brazil develop DPI and promote their versions of it, the digitisation of government is taking on a more geopolitical hue. Competition between them is intensifying, and tensions rising, as they encode their values into their digital infrastructureand export it. Some in the West, eyeing China in particular, worry that the digitisation of the state has become a front in the global struggle between democracy and autocracy. Chinas digital ambitions have fuelled concern about a state-led form of data colonisation. The Belt and Road Initiative (BRI), Chinas global infrastructure strategy, includes provisions to support digital infrastructure in other countries. Although BRI projects may help promote economic development in regions such as Africa and eastern Europe, they are also shaped by Chinese views on governance. Zimbabwes adoption of a Chinese-developed national ID scheme using facial recognition is one of several BRI-linked deals in repressive African states that have raised eyebrows in the West. But worries about how DPI is rolled out extend well beyond China. Revelations about internet surveillance by federal agencies have harmed Americas claim to digital leadership. Across advanced democracies there are concerns that digitising government creates opportunities for abuse. Some fears are new, such as the risk of cyber-attack, but most reflect a centuries-old challenge: how to balance individual freedoms against collective or state interests. If DPI is to gain broader trust, it cannot simply represent a shift from big-tech-led surveillance capitalism to a surveillance state. To reap its benefits and manage its risks, governments should embed democratic values into its governance. There are a number of ways to do this. To prevent misuse, digital infrastructure should be overseen by agencies with statutory independence. Second, governments should pass strong privacy laws before building out the infrastructure, as Estonia did. Third, systems should be transparent, ideally built on open-source code so that third parties can audit them. Fourth, the state should encourage civil-society discussions of DPI; this helped to improve policymaking in Jamaica, where a coalition of groups was invited to provide feedback on a proposed national ID system. Finally, national cyber-security capabilities need to be strengthened with DPI specifically in mind. The expansion of digital public infrastructure is adding muscle to the state. The question is to what degree the new heft will be used to increase or limit access to public services, to enhance or curb economic opportunity, and to promote or smother democratic values. This debate needs to happen now. David Eaves is an associate professor in digital government at University College Londons Institute for Innovation and Public Purpose. He sits on the board of Co-Develop, a philanthropic fund.