Innovations in digital government as business facilitators: implications for Portugal

Administrative and regulatory burden reduction is considered nowadays a priority to improve governmental efficiency and economic competitiveness. Innovations in government through Information Communication Technology (ICT) are seen as key tools in designing policies to achieve those goals. Using a large panel dataset, covering 174 countries from 2004 to 2016, we investigate a possible contribution of innovations in digital governments to facilitate business, and extract implications for Portugal. Progress in digital government is proxied by the United Nations’ e-gov index, while the business environment is proxied by the World Bank’s Ease of Doing Business indicators. Empirical results suggest that progress in e-gov may contribute to the creation a more business-friendly environment in several areas, particularly at starting a business, dealing with construction permits, getting electricity, paying taxes, getting credit, trading across borders, and protecting minority investors. Although Portugal has been evolving positively both in the Doing Business and e-gov rankings, it is still far from the top performers in several aspects, and gains could be obtained from improvements in digital government intended to facilitate business. Among the variables used in the construction of the Ease of Doing Business indicators, Portugal is always below the best performing countries in those that measure the number of procedures, time, costs and transparency. These are aspects where we can easily foresee a positive role of e-gov. Creating a favourable environment for business is particularly relevant for a country whose economy has been growing slowly over the last decades, has a GDP per capita that represents 80% of the EU average, and a public debt level of 130% of GDP. We believe that in a constantly evolving world, in which only the most innovative remain competitive, governments can play a strategic role as business facilitators