Does E-Government Raise Effectiveness and Efficiency?: Examining the Cross-National Effect

Abstract

This article examines the influence of e-government maturity on government effectiveness and efficiency with a cross-country view. To that end, it uses two-stage least square regression, considering the endogeneity of e-government. The regression-based analysis on various global indicators finds that e-government significantly contributes to enhancing government effectiveness but fails to substantially raise government efficiency. Political, economic, and cultural disparities across countries affect the variation in the impact of e-government on government effectiveness and efficiency. The level of democracy has a curvilinear relationship with government efficiency, and thus this study identifies non-democracies with well-performing governments.

Full text

Journal of Global Information Management
Does E-Government Raise Effectiveness and Efficiency?
Examining the Cross-national Effect
Taewoo Nam
n amtaewoo@skku.edu
Sungkyunkwan University
ABSTRACT
This study examines the influence of e-government maturity on government effectiveness and
efficiency with a cross-country view. To that end, it uses two-stage least square regression,
considering the endogeneity of e-government. The regression-based analysis on various
global indicators finds that e-government significantly contributes to enhancing government
effectiveness but fails to substantially raise government efficiency. Political, economic, and
cultural disparities across countries affect the variation in the impact of e-government on
government effectiveness and efficiency. The level of democracy has a curvilinear
relationship with government efficiency, and thus this study identifies non-democracies with
well-performing governments.
KEYWORDS
e-government, government effectiveness, government efficiency, cross-national study
1

INTRODUCTION
The commonly-used definition of e-government connotes its expected effects. E-government
refers to “the use of information and communication technology and its application by the
government for the provision of information and basic public services to the people,” and its
four goals, among others, are of vital importance and of relevance: “efficient government
management of information to the citizens”; “better service delivery to citizens”; “improved
access and outreach of information”; and “empowerment of the people through participatory
decision making” (United Nations, 2004: 15). Therefore, e-government has been considered a
key driver to boost government effectiveness and efficiency.
Nevertheless, little research has shed light on the global impact of e-government on
effectiveness and efficiency. An array of empirical studies has investigated whether e-
government leads to its promised results, but the studies have rarely paid close attention to its
performance in terms of effectiveness and efficiency with a cross-national view. Motivated by
this paucity in the relevant research, this study raises a research question—“Does e-
government maturity contribute to increasing the level of government effectiveness and
efficiency across countries?”—and, to answer the question, examines the extent to which
countries actualize what e-government promises for greater effectiveness and efficiency. To
that end, the study employs diverse global-scale indicators.
This article is structured into six sections, including the foregoing introduction. The
second section discusses theoretical underpinnings and empirical evidence. The third section
describes the data, measures, and empirical strategy. The fourth section reports the results of
the analysis in detail, and then the fifth section addresses the theoretical implications,
practical suggestions, and research limitations for further discussion. The final section
concludes this article.
GOVERNMENT EFFECTIVENESS AND EFFICIENCY
Conceptualization
A good government means a quality government or better performing government. The
quality of government and government performance are understood through various attributes
such as effectiveness and efficiency (La Porta et al., 1999), impartiality and lack of corruption
(Rothstein, 2011; Rothstein & Teorell, 2008; Wilson, 2008), financial performance (Knack,
2002; Rayp & Van De Sijpe, 2007), and democracy and accountability (Adserà, Boix, &
Payne, 2003). Effectiveness and efficiency are central to a good government, but historically
2

a government has had a bad reputation as an inefficient producer (Carrick, 1988; Marshall,
1998).
The academic understandings of effectiveness and efficiency are basically no
different from their lexicographic definitions. While the Merriam-Webster Dictionary defines
efficient as “productive without waste” and effective as “producing a decided, decisive, or
desired effect,” the Oxford Dictionary defines them as “achieving maximum productivity
with minimum wasted effort or expense” and “successful in producing a desired or intended
result,” respectively. In a similar vein, Barnard (1938) claimed, as a classical view on
government effectiveness, that an organizational action would be effective if “a specific
desired end is attained” (p. 19). Addressing government effectiveness and efficiency in
academic research unavoidably involves how to accurately measure the terms in practice
rather than how to refine the theoretical conceptualization beyond the common definition in
dictionaries. In that sense, what Osborne and Gaebler (1992) wrote is notable:
Efficiency is a measure of how much each unit of output costs. Effectiveness
is a measure of the quality of that output: how well did it achieve the desired
outcome? (p. 351)
While measuring efficiency is related to how much it costs a government to achieve a
specific output, measuring effectiveness is related to whether the government’s investment is
worthwhile. While efficiency implies “doing things right” and “doing better what is already
being done,” effectiveness implies “doing the right thing” and “deciding what to do better”
(Drucker, 1974, 1999; Drucker & Wilson, 2001).
For government efficiency, most studies consider inputs (government expenditure)
and outputs (public goods) chiefly in the aspect of financial management, economic
performance, and expenditure efficiency (Afonso, Schuknecht, & Tanzi, 2005; Geys, 2006;
Gupta & Verhoeven, 2001; Hauner & Kyobe, 2010; Rayp & Van De Sijpe, 2007; Tanzi &
Schuknecht, 1997, 2000). Government expenditure as input is a readily available proxy of
government size (Wu & Lin, 2012). Main outputs include health (e.g., infant mortality and
immunization) and education (e.g., youth illiteracy and school enrollment).
Government effectiveness is more difficult to measure than government efficiency
because the former is a matter of quality. Government effectiveness as a subindicator of the
World Governance Indicators has been popularly used (Magalhães, 2014). The indicator
defines government effectiveness as “perceptions of the quality of public services, the quality
of the civil service and the degree of its independence from political pressures, the quality of
3

policy formulation and implementation, and the credibility of the government’s commitment
to such policies” (Kaufmann, Kraay, & Mastruzzi, 2010: 4). With a more concrete view,
Rainey and Steinbauer (1999) thought they could measure government effectiveness as the
answer to whether a government does what it is supposed to do well, whether its actions,
procedures, and members help achieve its mission, and eventually whether it achieves its
mission.
Traditional determinants
La Porta et al. (1999) cast an important inquiry pertinent to the quality of government: “How
did some countries come to have good government and others did not?” (p. 223). The answer
was found in political, economic, and cultural determinants of government performance.
Researchers have spotlighted these three determinants in general.
Strong theoretical arguments support that political and economic freedom enhances
the quality of government. According to classic theories (Knack & Keefer, 1995; North,
1981, 1990), a good government is noninterventionist, protects property rights and keeps
regulations at a minimum. On the contrary, an intervening government is able to do its work
efficiently (Mauro, 1995; Treisman, 1997). La Porta et al. (1999: 225) contrasted more
liberty-based efficiency with less liberty-based efficiency; for example, 18th-century Britain’s
noninterventionist efficiency versus Prussian Frederick’s interventionist efficiency. Although
the latter case may result in government efficiency to some extent, greater interventionism on
average is believed to eventually cause lower efficiency. Méon and Weill (2005) saw
misleading interventionism as bad governance, lowering government efficiency, and
suggested a theoretical reason for it. The bad governance system is typically characterized as
“an ill-designed regulatory framework” and “a weak rule of law that results in widespread
theft that constrains agents to invest in the protection of their property,” and provides “an
incentive to divert efforts from productive activities” (Méon & Weill, 2005: 79).
Various aspects of political freedom influence government effectiveness. Since
cooperation between citizens and their formation of non-state institutions enable them to
exert more effective control over politicians and bureaucrats (Gellner, 1994; Putnam, 1993),
the maturity of civil society has a decisive role to make the government more effective. A
high level of democracy increases government accountability, thereby contributing to
effectiveness, especially when it is understood as “the quality of policy-making formulation
and implementation” (Magalhães, 2014: 77). In addition, political volatility could complicate
4

consistent budgetary planning and undermine efficiency (Hauner & Kyobe, 2010; Rayp &
Van De Sijpe, 2007). Therefore, the durability of the government and political stability can
determine the level of efficiency. Rayp and Van De Sijpe (2007) included the rule of law as
one of the key institutional determinants. In sum, countries with a better rule of law, stable
political regime, and liberal civil society are likely to experience reduced political risk and
increased accountability, thereby raising government effectiveness and efficiency. This
conjecture, however, has not always had empirical support. For example, Holmberg et al.
(2009) argued that “there is no straightforward relationship between establishing electoral
representative democracy and QoG [Quality of Government]” (p. 138).
On the other hand, economic freedom has gained importance in explaining the
difference in the level of government effectiveness and efficiency. One can expect that more
integration in the world economy compels a national government to market discipline and
hence increases government efficiency (Rayp & Van De Sijpe, 2007). Cross-national
competition provoked by economic liberalism may increase government efficiency to some
extent (Carrick, 1988; Marshall, 1998).
Though it is naturally expected that national culture can exogenously influence the
quality of government, one cannot describe and characterize national culture in a clear-cut
way. Much research has remarked on the importance of national culture in government
performance, but few have considered it in an empirical way (La Porta et al., 1999). Given
this gap, Hofstede’s (1980, 1983) contribution to measuring country-level cultural
characteristics is phenomenal. His explanation involves four cultural dimensions: power
distance, individualism versus collectivism, masculinity versus femininity, and uncertainty
avoidance. Power distance deals with how a society handles inequalities among people.
Individuals in low power distance societies can strive to equalize the distribution of power
and demand justification for inequalities of power. How equally power is distributed can
influence the impact of democratic participation on managerial effectiveness and efficiency
(Hofstede, 2007; Newman & Nollen, 1996; Stone, Stone-Romero, & Lukaszewski, 2007).
Individualists with a preference for a loosely-knit social framework take care of only
themselves and their immediate families. By contrast, collectivism shows conformity with,
obedience to, and loyalty for affiliated groups or organizations. Individualism has been a
rudiment of political and economic liberalism, which can affect government effectiveness and
efficiency (Nibler & Harris, 2003; Triandis, 1988). Masculine cultures prioritize quantitative
improvements, independence, and achievement in terms of power, wealth, and status;
5

whereas feminine cultures stress qualitative improvements, interdependence, relationships,
and the welfare of the weak. It is expected that the former would support efficiency over
effectiveness, and the latter would take a reverse approach (Altaf, 2011; Ringov & Zollo,
2007). Uncertainty avoidance involves how a society deals with the unknown future. High
uncertainty avoidance cultures prioritize ensuring survival over ensuring legitimacy. In
countries like the U.S., cultural tolerance for uncertain, ambiguous, and unstructured
situations may foster social long-term stability, which contributes to country-level
effectiveness and efficiency (Elenkov, 1998; Gorodnichenko & Roland, 2011). Conversely, a
high level of government effectiveness and efficiency appears in countries like Germany,
where people tend to plan everything carefully and rely on rules, laws, and regulations to
avoid uncertainty and keep risks to a minimum (Brodbeck, Frese, & Javidan, 2002;
MacArthur, 2006).
Corruption stemming from political, economic, and socio-cultural roots is an
intuitive determinant of efficiency because “corruption breeds waste” (Hauner & Kyobe,
2010: 1534). Expectedly, it is also a critical impediment to government effectiveness.
However, this study does not intentionally include a corruption-related indicator itself
because corruption per se is another face of an inefficient and ineffective government rather
than a determinant.
E-government as a new determinant
As mentioned in the introduction, e-government means the use of information
communication technology by the government to achieve certain goals. It can generate the
following outcomes (Yildiz, 2007: 659): government effectiveness and efficiency (Eyob,
2004; Hackney, Jones, & Lösch, 2007; Janssen & Estevez, 2013; Moon & Norris, 2005;
Norris & Moon, 2005); trust in government (Carter & Bélanger, 2005; Grimmelikhuijsen et
al., 2013; Im et al., 2014; Im, Porumbescu, & Lee, 2013; Porumbescu, 2013, 2016a, 2016b,
2016c; Tolbert & Mossberger, 2006; Warkentin et al., 2002); accountability (Bertot, Jaeger, &
Grimes, 2012; Justice, Melitski, & Smith, 2006; Pina, Torres, & Acerete, 2007; Wong &
Welch, 2004); transparency (Bonsón et al., 2012; Ciborra, 2005; Relly & Sabharwal, 2009);
anti-corruption (Andersen, 2009; Bertot, Jaeger, & Grimes, 2010; Cho & Choi, 2004; Kim,
Kim, & Lee, 2009; Shim & Eom, 2008); and users’ perceptions of service quality (Reddick,
2006, 2009; Welch, Hinnant, & Moon, 2005; West, 2004).
E-government at its earlier stage had not obtained many of the expected outcomes
6

such as cost savings and downsizing (Moon, 2002), but over time its wide diffusion across
municipalities and countries has exerted a significant impact on organizational outputs and
outcomes in terms of effectiveness and efficiency (Evans & Yen, 2005; Norris & Moon,
2005). Specifically, e-government has led to reducing time demands on staff, administrative
costs, and the number of staff. Designers of the e-government stage model thought that a
higher stage (full integration) of e-government maturity would realize visions of effectiveness
and efficiency (Layne & Lee, 2001). A recent practical notion further elaborated the role of e-
government for effectiveness and efficiency by describing it as “the use and application of
information technologies in public administration to streamline and integrate workflows and
processes, to effectively manage data and information, enhance public service delivery, as
well as expand communication channels for engagement and empowerment of people”
(United Nations, 2014: 2). E-government can determine the overall level of effectiveness and
efficiency in an individual country’s whole government, but its effects may vary with the
political administrative system, economic development, and institutional and cultural
contexts, as discussed in the traditional determinants of government effectiveness and
efficiency (Schuppan, 2009).
DATA, MEASURES, AND EMPIRICAL STRATEGY
Data and measures
This study created a dataset aggregating recent global-scale indicators derived from eight
reliable sources. Table 1 reports the data sources and the descriptive statistics of the indicator
variables.
Table 1. Descriptive statistics
Variable Data source N Mean S.D Min Max
Government effectiveness WGI 209 0.00 1.00 –2.22 2.25
Government efficiency GCI 140 3.65 0.78 1.41 5.77
E-government maturity UN E-GOV 191 0.39 0.27 0.00 1.00
Democracy EIU 163 5.56 2.19 1.08 9.93
Political stability WGI 211 0.00 1.00 –2.94 1.92
Economic prosperity World Bank 179 4.00 0.51 2.87 5.15
Economic freedom Heritage 178 60.68 11.03 2.30 88.60
Corruption control WGI 209 0.00 1.00 –1.83 2.29
Rule of law WGI 209 0.00 1.00 –2.34 2.07
Human capital UN E-GOV 191 0.66 0.20 0.00 1.00
Power distance Hofstede Center 102 64.27 20.82 11 100
Individualism Hofstede Center 102 38.86 21.98 6 91
Masculinity Hofstede Center 102 47.42 18.58 5 100
Uncertainty avoidance Hofstede Center 102 64.21 21.44 8 100
Public employee ratio ILO 92 19.40 11.76 2.60 85.20
7

Both dependent variables, government effectiveness and government efficiency,
score perceived evaluations based on international expert surveys. According to Parks (1984),
performance measures are objective (constructed from archives or records of performance) or
subjective (constructed from survey responses about performance). Whereas objective
measures cannot approximate the complex dimensions of performance (Lee & Whitford,
2009: 254), subjective measures are biased due to an informant’s recall (Golden, 1992) and
self-reported responses (Spector, 2006). Effectiveness and efficiency can be quantitatively
related to outputs and outcomes, but it is impossible to take a completely objective account of
them. While many existing studies contributed to developing objective measures of
effectiveness and efficiency, “the perceived efficiency and effectiveness of a country’s entire
government” and comparison of such perceived evaluations across countries could be an
important focus for cross-national research (Lee & Whitford, 2009: 250).
Government effectiveness draws from the homepage (govindicators.org) of the
World Governance Indicator (WGI) in 2016. The standardized indicator combines the views
of a large number of enterprise, citizen, and expert survey respondents over the world. A
rationale for employing such a perception-based indicator is that satisfaction with the way a
country works is related to features of the actual or perceived quality of government (Curini
et al., 2012; Linde & Erlingsson, 2013; Wagner et al., 2009). WGI measures government
effectiveness as follows: “perceptions of the quality of public services, the quality of the civil
service and the degree of its independence from political pressures, the quality of policy
formulation and implementation, and the credibility of the government’s commitment to such
policies” (Kaufmann, Kraay, & Mastruzzi, 2010: 4). This indicator is built upon 15 different
data sources with expert assessments on the quality of the bureaucracy, the supply of basic
public goods, policy implementation, and the quality of budgetary and financial management.
Government efficiency comes from subindicators of the Global Competitiveness
Index 2016 released by the World Economic Forum (reports.weforum.org/global-
competitiveness-report-2015-2016/). It is a composite of “wastefulness of government
spending” (how efficiently does the government spend public revenue?), “burden of
government regulation” (how burdensome is it for a business to comply with governmental
administrative requirements, e.g., permits, regulations, and reporting?), “efficiency of legal
framework in settling disputes” (how efficient is the legal framework for a private business in
settling disputes?), and “efficiency of legal framework in challenging regulations” (how easy
is it for private businesses to challenge government actions and/or regulations through the
8

legal system?). Each indicator and the aggregate range from 1 (worst) to 7 (best), reflecting
expert evaluations.
E-government maturity is a focal explanatory variable of this study. It refers to “the
level of progress made by a country regarding its development and the sophistication of the
features present on its government websites” (Ifinedo, 2011: 100). A mature level of e-
government development is expected to provide more effective and efficient services to
citizens and stakeholders (Andersen & Henriksen, 2006; West, 2007). This study uses the
Online Service Index from the United Nations E-Government Survey (UN E-Gov) dataset in
2016 (United Nations, 2016). UN experts and volunteer researchers assessed national portals
(national government, e-service, and e-participation portals) and the homepages of the
ministries pertinent to education, labor, social services, health, finance, and environment
affairs (United Nations, 2016: 138).
This study employs the Economist Intelligence Unit (EIU) Democracy Index in 2016
to measure the level of democracy (valued from 0 to 10). The index combines two facets of
democracy: electoral democracy and civil liberty. EIU experts scored the former as a function
of a competitive multiparty system, adult suffrage, and a contested electoral system, and they
measured the latter as perception on freedom of speech, expression, assembly, and
association. Political stability drawn from WGI 2016 reflects “perceptions of the likelihood of
political instability and politically motivated violence, including terrorism.”
The data regarding economic prosperity come from the World Bank. They are
measured as log values of gross domestic products (GDPs) per capita in US dollars. The data
for economic freedom, released from the Heritage Foundation, reflect four aspects of the
economic environment over which governments exercise policy control (heritage.org): rule
of law in terms of property rights; government size in terms of fiscal freedom and
government spending; regulatory efficiency in terms of business freedom, labor freedom, and
monetary freedom; and market openness in terms of trade freedom, investment freedom, and
financial freedom. Their values range from 0 to 100.
Both corruption control and rule of law are derived from WGI 2016. Corruption
control captures “perceptions of the extent to which public power is exercised for private
gain, including both petty and grand forms of corruption.” Rule of law captures “perceptions
of the extent to which agents have confidence in and abide by the rules of society, and in
particular the quality of contract enforcement, property rights, the police, and the courts, as
well as the likelihood of crime and violence.” These two variables have standardized scores.
9

Human capital comes from UN E-Gov’s Human Capital Index, consisting of four
components: “adult literacy rate;” “the combined primary, secondary and tertiary gross
enrollment ratio;” “expected years of schooling;” and “average years of schooling” (United
Nations, 2016: 136–137). Cultural data are downloaded from the Hofstede Center (geert-
hofstede.com/national-culture.html). Geert Hofstede has been devoted to developing and
refining assessments of national culture dimensions addressed in the second section
(Hofstede, 1980, 1983), and his research center publicizes the only unique sources of
quantitative evaluation of national cultures. Each cultural dimension is graded with a value
from 0 to 100. The public employee ratio is the share of public sector employees in the total
employment of an individual country. The data come from the homepage (www.ilo.org) of
the International Labor Organization (ILO).
Empirical strategy
This study assumes e-government maturity as endogenous because political and economic
determinants of government effectiveness and efficiency can substantively influence its level.
As such, two-stage least square (2SLS) regression is considered instead of ordinary least
square (OLS) regression. The first stage regresses e-government maturity on democracy,
economic prosperity, corruption control, and human capital. Then, the second stage regresses
government effectiveness and efficiency on traditional determinants discussed in the
literature review. Considering the empirical presence of non-democracies with a quality
government (La Porta et al., 1999), the second stage regression adds the level of democracy
as a squared form to the model specification. This is for examining whether the level of
democracy has a curvilinear relationship with government effectiveness and efficiency.
A bunch of empirical evidence has bolstered the possibility that e-government is
endogenous because its maturity is influenced by macro factors that exercise a crucial effect
on the overall quality of a national government. Countries respecting democratic values
promote the electronic dissemination of information (Islam, 2006; Martin & Feldman, 1998),
and those with high levels of civil liberties and political rights reap the benefits of
technological innovations (Azad et al., 2010; Katchanovski & La Porte, 2005). Since e-
government requires a substantial amount of financial resources to procure the necessary
equipment (Azad, Faraj, & Goh, 2010; Ifinendo, 2011; Ifinedo & Singh, 2011; Norris, 2001;
Tolbert, Mossberger, & McNeal, 2008), the availability of national wealth directly affects e-
government maturity. In that illiteracy and poor educational attainment seriously inhibit the
10

growth of an information society (Ifinedo & Singh, 2011; Kiiski & Pohjola, 2002; Norris,
2001), human capital is positively related to e-government maturity across countries. Much
research has revealed that public perceptions on corruption are significantly associated with
e-government progress and diffusion (Armstrong, 2011; Bertot et al., 2010; Cho & Choi,
2004; Wong & Welch, 2004).
RESULTS
This section reports the results of the 2SLS regression analysis conducted to examine the
effect of e-government and other explanatory variables on government effectiveness and
efficiency. Before describing the regression-based analysis, bivariate relationships merit
analytic attention in terms of pairwise correlation and scatterplots. As reported in Table 2,
some bivariate relationships show a high correlation (r > 0.70). E-government maturity is far
more correlated with effectiveness (r = 0.78) than efficiency (r = 0.45). Economic freedom is
also more associated with effectiveness (r = 0.80) than efficiency (r = 0.68). Rule of law is
highly correlated with both effectiveness (r = 0.93) and efficiency (r = 0.71), and also with
political stability (r = 0.75) and economic freedom (r = 0.82). Cultural dimension variables
seem very exogenous because they are not significantly highly correlated with dependent
variables and other independents.
Table 2. Pairwise correlation
[Y1] [Y2] [X1] [X2] [X3] [X4] [X5] [X6] [X7] [X8] [X9] [X10] [X11] [X12]
[Y1] Government effectiveness 1.00
[Y2] Government efficiency 0.67* 1.00
[X1] E-government maturity 0.78* 0.45* 1.00
[X2] Democracy 0.66* 0.13 0.48* 1.00
[X3] Political stability 0.70* 0.51* 0.32* 0.60* 1.00
[X4] Economic prosperity 0.79* 0.43* 0.71* 0.45* 0.49* 1.00
[X5] Economic freedom 0.80* 0.68* 0.62* 0.63* 0.55* 0.61* 1.00
[X6] Corruption control 0.91* 0.74* 0.64* 0.64* 0.77* 0.65* 0.75* 1.00
[X7] Rule of law 0.93* 0.71* 0.69* 0.68* 0.75* 0.69* 0.82* 0.94* 1.00
[X8] Human capital 0.71* 0.26* 0.64* 0.51* 0.56* 0.81* 0.46* 0.61* 0.65* 1.00
[X9] Power distance –0.61*–0.38* –0.46* –0.52* –0.45* –0.42* –0.50* –0.66* –0.66* –0.46* 1.00
[X10] Individualism 0.63* 0.40* 0.49* 0.46* 0.47* 0.57* 0.48* 0.64* 0.67* 0.57* –0.65* 1.00
[X11] Masculinity –0.06 –0.14 0.03 –0.07 –0.12 0.04 –0.01 –0.16 –0.14 –0.01 0.09 0.06 1.00
[X12] Uncertainty avoidance –0.11 –0.41* 0.09 0.10 –0.12 0.19 –0.15 –0.17 –0.14 0.21 0.16 –0.13 0.03 1.00
[X13] Public employee ratio 0.20 0.12 –0.02 –0.10 0.25 0.34* –0.12 0.18 0.14 0.43* –0.21 0.38 –0.20 –0.03
* p < 0.001
A scatterplot can help identify the visual pattern of bivariate relationships. Figure 1
11

displays scatterplots of government effectiveness against its key determinants. E-government
maturity, economic freedom, political stability, and rule of law have conspicuous linearity in
their causal relationship with effectiveness. The relationships of economic freedom and rule
of law with effectiveness have few exceptional leverages deviating from the predicted line.
The public employee ratio does not form a specific pattern. As discussed in the second
section, the impact of democracy on effectiveness may differ with the level of democracy.
The scatterplot illustrates the predicted line in a quadratic function because some countries
with a lower level of democracy experience a higher level of effectiveness. These include
Middle East countries such as Bahrain, Jordan, Oman, Qatar, Saudi Arabia, and the United
Arab Emirates, and East Asian countries such as China and Vietnam.
Figure 1. Scatterplots of government effectiveness against determinants
12

Figure 2 displays scatterplots of government efficiency against its key determinants.
E-government maturity does not portray a solid pattern in its relationship with efficiency,
though it may seem to have a slightly upward line. Similarly with Figure 1, economic
freedom, political stability, and rule of law have quite apparent linearity in their association
with efficiency. The curvilinear relationship of democracy with the quality of government is
more strongly confirmed in the scatterplot of efficiency. Examples of efficient non-
democracies supporting curvilinearity are Libya, Sudan, Syria, Turkmenistan, Uzbekistan,
and Yemen. Interestingly, the list of effective non-democracies does not overlap with that of
efficient non-democracies.
Figure 2. Scatterplots of government efficiency against determinants
13

Table 3. 2SLS regression of government effectiveness and efficiency
First stage
predicting
e-government
maturity
Second stage
predicting
government
effectiveness
Second stage
predicting
government
effectiveness
Second stage
predicting
government
efficiency
Second stage
predicting
government
efficiency
E-government maturity 2.084*
(0.439)
1.872*
(0.522)
–1.117
(0.628)
–0.910
(0.655)
Democracy squared –0.001
(0.012)
0.003
(0.016)
0.048*
(0.017)
0.050*
(0.019)
Democracy 0.001
(0.009)
0.050
(0.137)
0.011
(0.183)
–0.671*
(0.191)
–0.691*
(0.230)
Political stability 0.168*
(0.067)
0.154
(0.089)
–0.168
(0.095)
–0.138
(0.112)
Economic prosperity 0.177*
(0.048)
Economic freedom –0.003
(0.007)
–0.002
(0.008)
0.028*
(0.010)
0.027*
(0.009)
Corruption control 0.094*
(0.022)
Rule of law 0.443*
(0.127)
0.454*
(0.142)
0.839*
(0.177)
0.748*
(0.178)
Human capital 0.259*
(0.121)
Power distance 0.002
(0.002)
0.002
(0.003)
0.005
(0.003)
0.003
(0.004)
Individualism –0.001
(0.002)
–0.002
(0.003)
–0.005
(0.003)
–0.002
(0.004)
Masculinity 0.001
(0.002)
0.001
(0.002)
0.001
(0.003)
–0.002
(0.003)
Uncertainty avoidance –0.004*
(0.001)
–0.003
(0.002)
–0.008*
(0.003)
–0.008*
(0.003)
Public employee ratio 0.009
(0.005)
–0.024*
(0.007)
Constant –0.448*
(0.162)
–0.799*
(0.518)
–0.969
(0.653)
4.753*
(0.721)
5.295*
(0.820)
N 92 96 69 92 69
F65.67* –– –– –– ––
Wald χ2–– 783.08* 535.10* 263.82* 264.57*
R20.6319 0.8836 0.8765 0.7310 0.7949
Adjusted R20.6223 –– –– –– ––
* p < 0.01
14

Table 3 reports the results of the 2SLS regression analysis. In the first stage
regression, democracy does not significantly predict the level of e-government maturity,
while the other three determinants determine it significantly. The second stage regressions of
government effectiveness and efficiency use the predicted value of e-government maturity as
a key independent variable. E-government maturity predicts government effectiveness but
fails to predict government efficiency. This is consistent with what the pairwise correlation
and scatterplots suggest. Based on these results, e-government does not accomplish its goals
as much as the rhetoric proposes. Considering the measure of government effectiveness, one
can say that e-government maturity contributes to public perceptions of the overall high
quality of government services, civil service, policy formation, and policy implementation.
Considering the measure of government efficiency, one can say that e-government maturity
fails to create popular satisfaction with the decreasing wastefulness of government spending,
minimizing administrative requirements, and enhancing regulatory efficiency.
The second stage models predicting government effectiveness and efficiency are
divided into ones including the public employee ratio and ones not including it. The public
employee ratio is negatively associated with government efficiency but does not have a
significant influence on government effectiveness. To examine the curvilinearity of
democracy, its level in a quadratic form is added to the model specification. As illustrated in
Figure 2, the regression result identifies the curvilinear relationship of democracy with
government efficiency. The level of democracy does not have a significant influence on
government effectiveness. Economic freedom also exerts a significant influence only on
government efficiency. Rule of law acts as a common determinant of government
effectiveness and efficiency in its expected direction. While other cultural dimensions do not
have any significant impact, uncertainty avoidance only has a significantly negative influence
on the outcome variables. This result can imply that countries valuing legitimacy over
survival are more likely to have effective and efficient government than those with national
cultures primarily seeking survival and avoiding uncertainty. Of the two possibilities
discussed in the second section, American culture-based efficiency (in which uncertainty
tolerance leads to efficiency) outperforms German culture-based efficiency (in which risk
avoidance and well-planned actions lead to efficiency).
15

FURTHER DISCUSSION
Theoretical implications
The literature review in the second section identifies a paucity in the global-level examination
of e-government effects on government effectiveness and efficiency. This study fills the void
by investigating the relationships between various global indicators from reliable sources. A
core finding related to e-government expectations is notable; over the globe, e-government
contributes to government effectiveness but fails to improve government efficiency. This
finding is intriguing when earlier expectations of e-government are considered. People have
expected technological innovation by the government to cut out bureaucratic red tape,
simplify complicated business processes, and ultimately reduce waste in government
spending. Perhaps such effects may happen in practice; however, perceptions of government
efficiency are not very favorable for e-government effects.
This finding can be unique because existing research has neglected to analyze
perceived effectiveness and efficiency at the same time. Future research should raise two
questions in light of this finding. First, does perception matter? Unless this study based
government effectiveness and efficiency upon perception measures, the result might differ
from Table 3. Second, why does e-government have a greater impact on effectiveness than on
efficiency? If perception measures do not matter much and remain consistent with purely
objective indicators, future studies need to quantitatively compare e-government effects on
government effectiveness and on government efficiency.
Practical suggestions
This study offers strong evidence that e-government has dual effects on user perceptions:
generating lukewarm expectations on expenditure efficiency and regulatory efficiency versus
enthusiastic anticipations for public service quality and policy quality. E-government
practitioners not just in national governments but also in international organizations have to
find the practical reason for the perception gap and a way to close the gap. One may think
that e-government fails to detach the old stigma of an inefficient organization.
Based on the results, e-government goals may conflict with each other. Some non-
democracies have governments with a high level of efficiency. Such efficient non-democratic
regimes may dampen e-government-driven initiatives for democracy, transparency, openness,
and anti-corruption. This is a possible reason efficient non-democratic countries differ from
effective non-democratic ones. Bias in achieving the particular goals of e-government does
16

not contribute to a good government. Government effectiveness and efficiency are two
rabbits that countries should catch simultaneously.
Research limitations
This study has a weakness in using perception measures based on expert surveys. Survey
responses make it difficult to disentangle what determines the quality of government, since
they capture the respondents’ combined assessment of government policies and productivity
(Chong et al., 2014). In addition, survey responses often reflect a mixture of personal
experiences and policy views (Glaeser et al., 2004). Even though using subjective measures
from expert surveys is considered to be a proxy for the aggregation of individual citizen
perceptions, the measures may not be a real aggregate indicator. Public perceptions are
contingent upon citizen evaluations of government effectiveness and efficiency. However, the
indicators that this study employs have been continuously elaborated on through theoretical
and methodological discussions, and a lot of empirical studies have used the reliable data
from EIU, UN E-Gov, WGI, and World Bank.
In addition, the number of countries in the data about cultural dimensions and public
employee ratio is fewer than that of countries included in other global indicators. Inevitably,
this makes the regression-based analysis miss almost half the countries around the world. The
overall identified pattern would not change much even in a larger coverage area if differences
between sampled and non-sampled countries did not make systematic errors. The identified
pattern could be more salient because most non-sampled countries are expected to have a
lower level of political and economic liberty and thus experience a lower level of government
efficiency and effectiveness.
CONCLUSION
E-government may keep its promises related to government effectiveness and efficiency, but
this study found that e-government maturity does not exert a great impact on representative
perceptions of financial and administrative efficiency. Interpreting the results can either be
painful or fill one with hope. International interests in and endeavors for e-government
maturity contribute to raising the perceived quality of public services and policies. On the
other hand, e-government itself is not a main contributor to perceived efficiency. This finding
requires enhancing efficiency to be a target goal of international e-government practitioners.
Government efficiency might have been regarded as a relatively easy and simple goal.
17

However, the traditional goal of public administration still remains as hard to get as recently
focused ones like transparency, openness, participation, and collaboration. Both academics
and practitioners should keep this in mind.
REFERENCES
Adserà, A., Boix, C., & Payne, M. (2003). Are you being served? Political accountability and
quality of government. Journal of Law, Economics, and Organization, 19(2), 445–490.
Afonso, A., Schuknecht, L., & Tanzi, V. (2005). Public sector efficiency: An international
comparison. Public Choice, 123(3-4), 312–347.
Andersen, T. B. (2009). E-Government as an anti-corruption strategy. Information Economics
and Policy, 21(3), 201–210.
Armstrong, C. L. (2011). Providing a clearer view: An examination of transparency on local
government websites. Government Information Quarterly, 28(1), 11–16.
Altaf, A. (2011). The impact of organizational culture on organizational effectiveness:
Implication of Hofstede cultural model as organizational effectiveness
model. International Journal of Interdisciplinary Social Sciences, 6(1), 161–174.
Azad, B., Faraj, S., Goh, J. M., & Feghali, T. (2010). What shapes global diffusion of e-
government: Comparing the influence of national governance institutions. Journal of
Global Information Management, 18(2), 85–104.
Barnard, C. I. (1938). The Functions of the Executive. Cambridge, MA: Harvard University
Press.
Bertot, J. C., Jaeger, P. T., & Grimes, J. M. (2010). Using ICTs to create a culture of
transparency: E-government and social media as openness and anti-corruption tools for
societies. Government Information Quarterly, 27(3), 264–271.
Bertot, J. C., Jaeger, P. T., & Grimes, J. M. (2012). Promoting transparency and
accountability through ICTs, social media, and collaborative e-government. Transforming
Government: People, Process and Policy, 6(1), 78–91.
Bonsón, E., Torres, L., Royo, S., & Flores, F. (2012). Local e-government 2.0: Social media
and corporate transparency in municipalities. Government Information Quarterly, 29(2),
123–132.
Brodbeck, F. C., Frese, M., & Javidan, M. (2002). Leadership made in Germany: Low on
compassion, high on performance. The Academy of Management Executive, 16(1), 16–29.
18

Carter, L., & Bélanger, F. (2005). The utilization of e‐government services: Citizen trust,
innovation and acceptance factors. Information Systems Journal, 15(1), 5–25.
Carrick, P. M. (1988). New evidence on government efficiency. Journal of Policy Analysis
and Management, 7(3), 518–528.
Cho, Y. H., & Choi, B. D. (2004). E-government to combat corruption: The case of Seoul
metropolitan government. International Journal of Public Administration, 27(10), 719-
735.
Chong, A., La Porta, R., Lopez‐de‐Silanes, F., & Shleifer, A. (2014). Letter grading
government efficiency. Journal of the European Economic Association, 12(2), 277–299.
Ciborra, C. (2005). Interpreting e-government and development: Efficiency, transparency or
governance at a distance?. Information Technology & People, 18(3), 260–279.
Curini, L., Jou, W., & Memoli, V. (2012). Satisfaction with democracy and the winner-loser
debate: The role of policy preferences and past experience. British Journal of Political
Science, 42(2), 241–261.
Drucker, P. F. (1974). Management: Tasks, Responsibilities, Practices. London, UK:
Heinemann.
Drucker, P. F. (1999). Management Challenges for the 21st Century. New York: Harper
Business
Drucker, P. F., & Wilson, G. (2001). The Essential Drucker (vol. 81). Oxford, UK:
Butterworth-Heinemann.
Elenkov, D. S. (1998). Can American management concepts work in Russia? A cross-cultural
comparative study. California Management Review, 40(4), 133–156.
Evans, D., & Yen, D. C. (2005). E-government: An analysis for implementation: Framework
for understanding cultural and social impact. Government Information Quarterly, 22(3),
354–373.
Eyob, E. (2004). E-government: Breaking the frontiers of inefficiencies in the public
sector. Electronic Government: An International Journal, 1(1), 107–114.
Holmberg, S., Rothstein, B., & Nasiritousi, N. (2009). Quality of government: What you get.
Annual Review of Political Science, 12, 135–161.
Geys, B. (2006). Looking across borders: A test of spatial policy interdependence using local
government efficiency ratings. Journal of urban economics, 60(3), 443–462.
Glaeser, E., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2004). Do institutions cause
growth?. Journal of Economic Growth, 9(3), 271–303.
19

Golden, B. R. (1992). The past is the past—Or is it? The use of retrospective accounts as
indicators of past strategies. Academy of Management Journal, 35(4), 848–860.
Gorodnichenko, Y., & Roland, G. (2011). Which dimensions of culture matter for long-run
growth?. The American Economic Review, 101(3), 492–498.
Grimmelikhuijsen, S., Porumbescu, G. A., Hong, B., & Im, T. (2013). The effect of
transparency on trust in government: A cross‐national comparative experiment. Public
Administration Review, 73(4), 575–586.
Gupta, S., & Verhoeven, M. (2001). The efficiency of government expenditure: Experiences
from Africa. Journal of Policy Modeling, 23(4), 433–467.
Hackney, R., Jones, S., & Lösch, A. (2007). Towards an e-Government efficiency agenda:
The impact of information and communication behavior on e-Reverse auctions in public
sector procurement. European Journal of Information Systems, 16(2), 178–191.
Hauner, D., & Kyobe, A. (2010). Determinants of government efficiency. World
Development, 38(11), 1527–1542.
Hofstede, G. (1980). Culture’s Consequences: International Differences in Work-related
Values. Beverly Hills, CA: Sage Publications.
Hofstede, G. (1983). National cultures in four dimensions. International Studies of
Management and Organization, 13(1-2), 46–74.
Hofstede, G. (2007). Asian management in the 21st century. Asia Pacific Journal of
Management, 24(4), 411–420.
Ifinedo, P. (2012). Factors influencing e-government maturity in transition economies and
developing countries: A longitudinal perspective. ACM SigMIS Database: The
DATABASE for Advances in Information Systems, 42(4), 98–116.
Ifinedo, P., & Singh, M. (2011). Determinants of eGovernment maturity in the transition
economies of Central and Eastern Europe. Electronic Journal of e-Government, 9(2),
166–182.
Im, T., Cho, W., Porumbescu, G. A., & Park, J. (2014). Internet, trust in government, and
citizen compliance. Journal of Public Administration Research and Theory, 24(3), 741–
763.
Im, T., Porumbescu, G. A., & Lee, H. (2013). ICT as a buffer to change: A case study of the
Seoul Metropolitan Government’s Dasan Call Center. Public Performance &
Management Review, 36(3), 436–455.
20

Islam, R. (2006). Does more transparency go along with better governance?. Economics &
Politics, 18(2), 121–167.
Janssen, M., & Estevez, E. (2013). Lean government and platform-based governance—Doing
more with less. Government Information Quarterly, 30, S1–S8.
Justice, J. B., Melitski, J., & Smith, D. L. (2006). E-government as an instrument of fiscal
accountability and responsiveness: Do the best practitioners employ the best
practices?. The American Review of Public Administration, 36(3), 301–322.
Katchanovski, I., & La Porte, T. (2005). Cyberdemocracy or Potemkin e-villages? Electronic
governments in OECD and post-communist countries. International Journal of Public
Administration, 28(7-8), 665–681.
Kaufmann, D., Kraay, A. & Mastruzzi, M. (2010). The Worldwide Governance Indicators:
Methodology and Analytical Issues. Washington, DC: World Bank.
Kiiski, S., & Pohjola, M. (2002). Cross-country diffusion of the Internet. Information
Economics and Policy, 14(2), 297–310.
Knack, S. (2002). Social capital and the quality of government: Evidence from the
states. American Journal of Political Science, 46(4), 772–785.
Knack, S., & Keefer, P. (1995). Institutional and economic performance: Cross-country tests
using alternative institutional measures. Economics & Politics, 7(3), 207–227.
Kim, S., Kim, H. J., & Lee, H. (2009). An institutional analysis of an e-government system
for anti-corruption: The case of OPEN. Government Information Quarterly, 26(1), 42–50.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (1999). The quality of
government. Journal of Law, Economics, and Organization, 15(1), 222–279.
Layne, K., & Lee, J. (2001). Developing fully functional e-government: A four stage
model. Government Information Quarterly, 18(2), 122–136.
Lee, S. Y., & Whitford, A. B. (2009). Government effectiveness in comparative
perspective. Journal of Comparative Policy Analysis, 11(2), 249–281.
Linde, J., & Erlingsson, G. Ó. (2013). The eroding effect of corruption on system support in
Sweden. Governance, 26(4), 585–603.
MacArthur, J. B. (2006). Cultural Influences on German versus US Management Accounting
Practices. Management Accounting Quarterly, 7(2), 10–16.
Magalhães, P. C. (2014). Government effectiveness and support for democracy. European
Journal of Political Research, 53(1), 77–97.
21

Marshall, N. (1998). Reforming Australian local government: Efficiency, consolidation—and
the question of governance. International Review of Administrative Sciences, 64(4), 643–
662.
Martin, R., & Feldman, E. (1998). Access to Information in Developing Countries. Berlin,
Germany: Transparency International.
Mauro, P. (1995). Corruption and growth. The Quarterly Journal of Economics, 110(3), 681–
712.
Méon, P. G., & Weill, L. (2005). Does better governance foster efficiency? An aggregate
frontier analysis. Economics of Governance, 6(1), 75–90.
Moon, M. J. (2002). The evolution of e‐government among municipalities: Rhetoric or
reality?. Public Administration Review, 62(4), 424–433.
Moon, M. J., & Norris, D. F. (2005). Does managerial orientation matter? The adoption of
reinventing government and e‐government at the municipal level. Information Systems
Journal, 15(1), 43–60.
Newman, K. L., & Nollen, S. D. (1996). Culture and congruence: The fit between
management practices and national culture. Journal of International Business
Studies, 27(4), 753–779.
Nibler, R., & Harris, K. L. (2003). The effects of culture and cohesiveness on intragroup
conflict and effectiveness. The Journal of Social Psychology, 143(5), 613–631.
Norris, D. F., & Moon, M. J. (2005). Advancing e‐government at the grassroots: tortoise or
hare?. Public Administration Review, 65(1), 64–75.
North, D. (1981). Growth and Structural Change. New York: W. W. Norton.
North, D. (1990). Institutions, Institutional Change, and Economic Performance. Cambridge,
UK: Cambridge University Press.
Osborne, D., & Gaebler, T. (1992). Reinventing Government: How the Entrepreneurial Spirit
is Transforming the Public Sector. Reading, MA: Addison-Wesley Publishing Company,
Inc.
Parks, R. B. (1984). Linking objective and subjective measures of performance. Public
Administration Review, 44(2), 118–127.
Pina, V., Torres, L., & Acerete, B. (2007). Are ICTs promoting government accountability?: A
comparative analysis of e-governance developments in 19 OECD countries. Critical
Perspectives on Accounting, 18(5), 583–602.
22

Porumbescu, G. A. (2013). Assessing the link between online mass media and trust in
government: Evidence from Seoul, South Korea. Policy & Internet, 5(4), 418–443.
Porumbescu, G. A. (2016a). Comparing the effects of e-government and social media use on
trust in government: Evidence from Seoul, South Korea. Public Management Review,
18(9), 1308–1334.
Porumbescu, G. A. (2016b) Linking public sector social media and e-government website use
to trust in government. Government Information Quarterly, 33(2), 291–304.
Porumbescu, G. A. (2016c). Placing the effect? Gleaning insights into the relationship
between citizens’ use of e-government and trust in government. Public Management
Review, 18(10), 1504–1535.
Putnam, R. D. (1993). Making Democracy Work: Civic Traditions in Modern Italy. Princeton,
NJ: Princeton University Press.
Rainey, H. G., & Steinbauer, P. (1999). Galloping elephants: Developing elements of a theory
of e ective government organizations. ffJournal of Public Administration Research and
Theory, 9(1), 1–32.
Rayp, G., & Van De Sijpe, N. (2007). Measuring and explaining government efficiency in
developing countries. Journal of Development Studies, 43(2), 360–381.
Reddick, C. G. (2006). Information resource managers and E-government effectiveness: A
survey of Texas state agencies. Government Information Quarterly, 23(2), 249–266.
Reddick, C. G. (2009). Factors that explain the perceived effectiveness of e-government: A
survey of United States city government information technology directors. International
Journal of Electronic Government Research, 5(2), 1–15.
Relly, J. E., & Sabharwal, M. (2009). Perceptions of transparency of government
policymaking: A cross-national study. Government Information Quarterly, 26(1), 148–
157.
Ringov, D., & Zollo, M. (2007). The impact of national culture on corporate social
performance. Corporate Governance: The International Journal of Business in
Society, 7(4), 476–485.
Rothstein, B. (2011). The Quality of Government: Corruption, Social Trust, and Inequality in
International Perspective. Chicago: University of Chicago Press.
Rothstein, B., & Teorell, J. (2008). What is quality of government? A theory of impartial
government institutions. Governance, 21(2), 165–190.
23

Schuppan, T. (2009). E-Government in developing countries: Experiences from sub-Saharan
Africa. Government Information Quarterly, 26(1), 118–127.
Shim, D. C., & Eom, T. H. (2008). E-government and anti-corruption: Empirical analysis of
international data. International Journal of Public Administration, 31(3), 298–316.
Spector, P. E. (2006). Method variance in organizational research: Truth or urban legend?
Organizational Research Methods, 9(2), 221–232.
Stone, D. L., Stone-Romero, E. F., & Lukaszewski, K. M. (2007). The impact of cultural
values on the acceptance and effectiveness of human resource management policies and
practices. Human Resource Management Review, 17(2), 152–165.
Tanzi, V., & Schuknecht, L. (1997). Reconsidering the role of government: The international
perspective. The American Economic Review, 87(2), 164–168.
Tanzi, V., & Schuknecht, L. (2000). Public Spending in the 20th Century: A Global
Perspective. Cambridge, UK: Cambridge University Press.
Tolbert, C. J., & Mossberger, K. (2006). The effects of e‐government on trust and confidence
in government. Public Administration Review, 66(3), 354–369.
Tolbert, C. J., Mossberger, K., & McNeal, R. (2008). Institutions, policy innovation, and e‐
government in the American states. Public Administration Review, 68(3), 549–563.
Triandis, H. (1988). Collectivism v. individualism: A reconceptualization of a basic concept
in cross-cultural social psychology. In Verma, G. K., & Bagley, C. (eds.) Cross-Cultural
Studies of Personality, Attitudes and Cognition (pp. 60–95). London, UK: Palgrave
Macmillan.
Treisman, D. (2000). The causes of corruption: A cross-national study. Journal of public
economics, 76(3), 399–457.
United Nations (2004). Global E-Government Readiness Report 2004: Towards Access for
Opportunity. New York: United Nations.
United Nations (2014). United Nations E-Government Survey 2014: E-Government for the
Future We Want. New York: United Nations.
Wagner, A. F., Schneider, F., & Halla, M. (2009). The quality of institutions and satisfaction
with democracy in Western Europe: A panel analysis. European Journal of Political
Economy, 25(1), 30–41.
Warkentin, M., Gefen, D., Pavlou, P. A., & Rose, G. M. (2002). Encouraging citizen adoption
of e-government by building trust. Electronic Markets, 12(3), 157–162.
24

Welch, E. W., Hinnant, C. C., & Moon, M. J. (2005). Linking citizen satisfaction with e-
government and trust in government. Journal of Public Administration Research and
Theory, 15(3), 371–391.
West, D. M. (2004). E‐government and the transformation of service delivery and citizen
attitudes. Public Administration Review, 64(1), 15–27.
Wilson, G. (2008). The quality of government. Governance, 21(2), 197–200.
Wong, W., & Welch, E. (2004). Does e‐government promote accountability? A comparative
analysis of website openness and government accountability. Governance, 17(2), 275–
297.
Wu, A. M., & Lin, M. (2012). Determinants of government size: Evidence from China.
Public Choice, 151(1-2), 255–270.
Yildiz, M. (2007). E-government research: Reviewing the literature, limitations, and ways
forward. Government Information Quarterly, 24(3), 646–665.
25