E-Governance and the Political Implications of Digital Transformation

Governance is directly impacted by digital transformation. Beyond the authorities' need to manage the regulatory framework of digital transformation, governance itself can be transformed through e-gov-ernance. E-governance encompasses the use of digital services to enhance government services. These range from citizen and business services provided by a government (such as tax payment, document requests, and registration), to government transparency through digital means (minutes of meetings, public procurement processes and strategies), and to consultative practices (from citizens participation to e-voting). The emphasis on governance (rather than government) highlights that these can be pro-vided in a multiplicity of different levels of government (local to state, by public service provider and regional and international organizations) and that they require the engagement of multiple stakehold-ers.

E-governance does not just imply a top-down service provision by the state, but it also allows for a more interactive multi-stakeholder approach in policy design and development, and consultation pro-cesses.

Currently, the Western Balkans are lagging behind the rest of Europe significantly in the field of e-governance. While Croatia and Slovenia are among the mid- and lower-rank EU member states, the economies outside the EU are placed between the 39^th place globally (Serbia) and the 92^nd (Bosnia and Herzegovina), see Figure 14.

59 Figure 14. E-Government index for the EU and the Western Balkans⁶⁵

Source: Authors’ calculations.

Enhancing e-governance is closely interlinked with a larger digital transformation of the region, as im-proved e-governance requires a reliable and comprehensive digital coverage and provision of services to citizens. E-governance is also connected to the human dimension of digital transformation, namely citizens’ trust in digital communications and services, from data protection and privacy, to reliability and digital skills.

In return, a shift towards greater e-governance can provide an important stimulus for the economy, as it can improve some of the major obstacles for doing business in the region. These include access to permits, such as water and electricity, and informality and corruption (Sanfey et al., 2016). Empirical evidence suggests that e-governance can have a strong positive impact on fighting corruption (El-bahnasawy, 2014). E-governance allows for procedures that are more transparent and reduce points of contact between citizens and government officials where bribes could be solicited or offered. If one-stop-shops provided an important tool to simplify the interaction between public administration and citizens or businesses, e-governance constitutes a further step in removing opportunities for corrup-tion. Furthermore, e-governance provides for tools that allow citizens to report corruption and thus, it can directly contribute to the battle against corruption. Finally, it increases legal certainty as it becomes easier to access important documents and court orders (cadaster, mortgage, trade register etc.).

Closely intertwined with the potential for greater transparency is the simplification of procedures that e-governance can provide. Reducing queues in administrative offices, and a clear distribution of re-sponsibilities can cut down significantly high administrative burdens citizens and companies often face.

65 UN (2016).

GB FI SE NL DK FR EE DE AT ES BE SI IT LT LU IE MT EU avg. PL HR PL RS GR LV HU ME CZ WB avg. BG SK MK RO AL BA

0,5 0,55 0,6 0,65 0,7 0,75 0,8 0,85 0,9 0,95 1

60

Thus, e-governance entails considerable opportunities for open government, which entails the public disclosure of documents and materials, as well as the possibility of consultative processes with citizens' participation. Such open government approaches include electronic registries and open budget pro-cesses, which remain underdeveloped in the Western Balkans (ReSPA, 2015). An important aspect of e-governance is the digital aspect of voting, which includes e-voting, although this remains challenging.

However, digital voting registers and support in vote counting can render voting processes more trans-parent and facilitate voter participation. However, such digital transformation of political participation requires strong safeguards against abuse and manipulation.

An indirect link between digital transformation and governance lies in the opportunities it provides for SMEs. Recent research on Bosnia and Herzegovina shows that local business associations, based on a diverse local business sector can have a positive impact on local government in terms of being able to push for better governance and greater transparency (Karamperidou, 2018). There is thus a benefit for governance from SMEs, especially at the local level, as a diverse group of companies have an interest in transparent governance and good service provision, whereas quasi-monopolistic companies are able to establish working relations with local governments that bypass larger questions of good governance.

Digital transformation can contribute to the development of a decentralized and diverse economy by providing benefits to companies outside capitals and enhancing market access to smaller companies, such as start-ups.

Finally, digital transformation will have a large impact on media in the Western Balkans. Digital media have already become the second most important source of information in Serbia, a trend that is likely to be similar elsewhere in the Western Balkans. In 2016, internet was the most important source of information for 36.8 percent of the population, with the share of TV shrinking by nearly a quarter be-tween 2010 and 2016. The time spent using the internet is second only to watching TV (175 minutes to 317 minutes per day) (BIRN & Reporters without Borders, 2016). Thus, digital media already shape citizens’ perception and provide news. With further digital transformation of the Western Balkans and with new digital generations coming of age, there is a likely further shift in importance from the pre-vailing dominance of television to online media.⁶⁶

Digital media and social networks are important alternative sources of information in media markets that are often shaped by politicized news outlets and insufficient independence from governments and state funding (Bieber & Kmezić, 2015).Thus, the reduced costs and speed dissemination of electronic

66 For more details, see the “Mapping Digital Media” project of the Open Society Foundations.

61 media provide for a potential critical voice in many economies to report critically and independently and can thus contribute to better governance.

The downside of the low-cost, high-impact electronic news dissemination has also become visible through the proliferation of “fake news” which many media consumers are not able to distinguish from real news and news distribution through algorithms on social media, which results in echo chambers and proliferation of unrestricted hate speech. Despite these trends, in Serbia, social networks and the internet enjoy high levels of trust, more than any other type of media (BIRN & Reporters Without Bor-ders, 2016).

Digital transformation can thus prompt greater trust in the media and a more diverse media scene that can lead to improved governance. At the same time, without greater management of online content and digital literacy, the media dimension of digital transformation can also have a disruptive effect on governance.