Government Strategies: Addressing the Digital Divide for Enhanced Public Outcomes

Digital Divide: Implications and Opportunities for Government Strategies

David Amaglobeli, Ruud A. de Mooij, Andualem Mengistu, Mariano Moszoro, Manabu Nose, Soheib Nunhuck, Slra Pattanayak, Lorena Rivero del Paso, Frankosiligi Solomon, Rebecca Sparkman, Herve Tourpe, Gerardo U??a

September 7, 2023

The persistent and growing digital divide across countries and within them underscores the importance of strategic government intervention. This Staff Discussion Note highlights how governments have fled to fully exploit digitalization's potential by investing in infrastructure on the supply side and enhancing internet affordability on the demand side. It also demonstrates significant advantages in revenue collection, sping efficiency, education outcomes, health, social safety nets, and beyond.

Key Findings:

1. Digital Divide Persistence: The digital gap is not just about access but quality of connections as well. Despite advancements, many governments are unable to harness technology's full potential due to a lack of strategic direction or adequate resources.

2. Government Role in Digital Adoption: Governments can play a pivotal role in promoting digital adoption by investing in infrastructure and fostering internet affordability. This dual approach facilitates the wider use of technology for public benefit.

3. Digitalization Divids: Digital solutions significantly enhance revenue collection, boost sping efficiency, improve educational outcomes, advance healthcare services, strengthen social safety nets, and promote inclusive growth.

4. Balancing Act: Governance vs. Digitalization: While digital tools can augment traditional governance practices, they are not a replacement for good governance or well-designed policies. Comprehensive reform plans integrated into National Digital Strategies NDS combined with legal and institutional reforms are essential to ensure that governments maximize benefits while mitigating risks.

Implications:

• Supply-Side Interventions: Governments should prioritize investing in digital infrastructure, such as broadband networks and connectivity solutions, to bridge the access gap.

• Demand-Side Actions: Policies med at lowering internet costs and improving affordability will encourage broader use of digital services among citizens and businesses.

• Holistic Approach: To fully benefit from digitalization while managing risks effectively, governments need to develop robust NDS that align with comprehensive reform agas in governance, law, institutions, and policy.

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Digitalization holds transformative potential for public finance management PFM, revenue generation, service delivery, and societal outcomes. However, its effective implementation requires strategic government leadership, a focus on both supply-side investments and demand-side facilitation, and an overarching commitment to fostering good governance. The note emphasizes the importance of NDS as a comprehensive framework that integrates digital strategies with broader reform efforts to ensure sustnable development.

Subject Areas: Economic sectors, Financial crises, Public financial management PFM, Revenue administration, Technology

Keywords: Digital divide, Government strategy, Asia and Pacific, Caribbean, Digitalization, Europe, Governance pillar, Government technology, Government transfer, GovTech, Inequality, Management information system, Middle East, North Africa, PFM information systems, Public Finance, Social Divids, Staff discussion note SDN2023004

Publication Detls:

• Pages: 45

• Volume: Not applicable as it is a discussion note

• DOI: NA

• Issue: September 7, 2023, in the series of Staff Discussion Notes No. 2023004

Stock Number: SDNEA2023004

ISBN: 9798400245480

This publication is inted to elicit discussion and feedback from readers.

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This paper reflects the views of the authors and does not necessarily represent IMF views or policy. The views expressed are those of the authors, not necessarily those of the International Monetary Fund IMF, its Executive Board, or management. Staff Discussion Notes are shared to encourage debate on economic topics.

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