Building state capacity in the digital age
This blog follows up on the event ‘Building State Capacity in the Digital Age,’ a panel from the IIPP Forum 2024. You can watch the recording of the event above. In the 21st century, enhancing how governments deliver public services is crucial for expanding access, reducing friction, and ensuring efficiency. But is this all that digitization can achieve?
The answer is a resounding no — or at least, that’s the promise of Digital Public Infrastructure (DPI). DPI represents a transformative approach to public digitization, offering the potential to unlock innovation, drive inclusive economic growth, and provide developing countries with a chance to leapfrog.
Since its inception, the concept of DPI spread like wildfire in the public digital space. However, is DPI truly as beneficial as it seems? What challenges does this innovative approach present?
This panel, moderated by Beatriz Vasconcellos, Research Fellow at UCL Institute for Innovation and Public Purpose (IIPP), delved into the rise and challenges of Digital Public Infrastructure.
The rise of DPI
Mike Bracken, founder and former executive director of the UK Government Digital Service, was sitting in the front row of the auditorium as David Eaves, Co-Deputy Director and Associate Professor in Digital Government at UCL/IIPP, reminisced about their annual gatherings. Each year, they would bring together the heads of digital transformation teams to discuss their insights and progress.
“A big part of those teams’ approach was service design-oriented. They were focusing on users, figuring out how they could better serve them. But there were two countries that I found really intriguing. The Estonians didn’t really have a digital service team the way other countries did, and the Indians didn’t have anything that looked like a digital service team at all”, David remembered.
Instead of focusing solely on service delivery, or perhaps complementing this approach, both Estonia and India had concentrated on developing the infrastructural layer. They built foundational services that have seen massive adoption and transformed their respective digital landscapes.
In Estonia, X-Road, their data-sharing scheme, supports over 1.3 million citizens and 50,000 businesses, facilitating more than 500 million transactions annually.
In India, Aadhaar has become the world’s largest biometric ID system, with over 1.3 billion enrolled members. This system has played a crucial role in reducing fraud and leakage, saving the Indian government billions of dollars. The scale and efficiency of Aadhaar are remarkable; at its peak, the enrollment process was capable of handling up to 1.5 million applications per day.
But, why are these infrastructural systems so critical?
Understanding What is Digital Public Infrastructure
As we moved into the 21st century, a significant portion of our lives transitioned online. However, to open a bank account, apply for a job, conduct transactions, or apply for social benefits online, without visiting a physical office, certain prerequisites must be met. One needs to be able to prove their identity, have access to a payment infrastructure, and use a reliable data-sharing scheme. In a nutshell, these essential digital services are known as Digital Public Infrastructure (DPI).
DPI includes foundational public services such as digital identification, electronic payment systems, and data exchange frameworks, that can be leveraged by government agencies, individuals, civil society and the private sector to innovate and offer new products and services online. By providing these digital equivalents of physical public goods, DPI enables seamless participation in the digital economy and society, ensuring that the benefits of digitisation are accessible to all.
To learn more about DPI, you can read this blog post by David Eaves.
Is DPI an Indian Story?
Yes and no.
David Eaves, who has become one of the leading voices in understanding and conceptualizing DPI, recently launched the DPI map. During the panel discussion, he highlighted two intriguing facts: firstly, the number of digital ID, data sharing, and government-run payment systems worldwide was far greater than anticipated. Secondly, most of these schemes have been designed and implemented by countries in the Global South. In this sense, the DPI story exceeds India’s experience.
However, Dr Mansi Kedia emphasized India’s role in promoting this approach: “I think DPI is an India story but not because of the technology. Many governments were already doing it. I think it was the way that India used it, applied it, and then talked to the whole world about it that made it an Indian story”. In fact, the term DPI became prominent during India’s Presidency of the G20.
Dr Mansi Kedia, a Senior Fellow at the Indian Council for Research on International Economic Relations, focuses her research on incorporating a Global South perspective in the analysis and comparison of digital government initiatives worldwide. She attributes India’s success with DPI to three key factors:
- The government’s mission-oriented approach, ensuring that all necessary steps were meticulously executed.
- Collaboration with the private sector, effectively “borrowing” technical expertise and capacity for implementation.
- Agility in adapting to the country’s diversity and utilizing lightweight technology solutions that could fit a wide range of use cases.
DPI for the common good
In 2023, India handed over the G20 presidency to Brazil, and the country took up the mantle of using that platform to promote Digital Public Infrastructure (DPI).
This initiative aligns with Brazil’s own history of developing DPI, even if the term was unfamiliar at the time. Henrique Dolabella, Director of the Rural Environmental Registry at the Ministry of Management and Innovation in Public Services in Brazil, remarked that they were “doing DPI without calling it DPI.”
Brazil’s flagship DPI is Pix, the instant-payment interface developed by the Central Bank. Launched in November 2020, Pix reached 100 million users within its first year. By the end of 2022, over 75% of the adult population in Brazil had used Pix.
Now, the country is taking inspiration from other experiences and their own success stories to develop foundational initiatives, such as its digital ID and data exchange layer, as well as sectorial DPIs.
Henrique’s work sits at the intersection of technology and environmental protection. He oversees the Rural Environmental Registry, a successful public policy initiative designed to track protected land and mitigate deforestation, an activity that accounts for 70% of Brazil’s carbon emissions.
Henrique’s vision for this registry is far more ambitious: they aim to transform it beyond mere fiscal oversight into an open DPI platform with multiple applications.
This registry contains valuable information about land characteristics, soil use, and its evolution over time. Currently, some of this data is used to facilitate services such as credit access, but its potential is vast. By empowering landowners with access to and reuse of their own registries, Brazil can stimulate carbon markets, enhance land monitoring, predict optimal land uses, and develop climate change adaptation plans, among other use cases.
What is ‘public’ about DPI?
As the concept of DPI takes shape, new debates arise. Understanding what is truly public about DPI was the central question explored by David Eaves, Beatriz Vasconcellos, and Mariana Mazzucato, Founding Director and Professor at IIPP, in their recently published paper. Prof. Mazzucato remarked, “Just because you use Google for free, it doesn’t mean that it is public. In economics, the concept of ‘public’ is often confused: there are all these different terms like public good, public interest, global public goods, public value… but they’re actually often a bit fuzzy. We need to get more rigorous.”
Challenging the mainstream market-fixing approach, Prof. Mazzucato argued that DPI presents an opportunity to shape the economy towards the common good. However, like any tool, DPI must be designed with a clear public purpose, embedding public values in its design principles from the outset. She stated, “It can’t just be ex-post. It’s not just about being for the public interest and then afterwards seeing how it’s affecting people. You have to design it ex-ante. It’s about collectively creating value and being mindful of the design principles, whether it’s intellectual property rights, algorithm development, or user experience when accessing something that’s supposed to be public”.
As we move forward into the digital age, the development and implementation of Digital Public Infrastructure stand as crucial components for building state capacity and fostering inclusive growth. Brazil and India are powerful examples of how transformational, innovative approaches can emerge from the global South to traction inclusion and leapfrog into development. The DPI journey, however, has just begun.
