Bridging sectors: how government spending enhances the embeddedness of information processes in Kazakhstan’s economy

The integration of digital technologies and artificial intelligence into national economies is increasingly recognized as a driver of economic modernization and cross-sectoral connectivity. In Kazakhstan, government expenditure has played a central role in building digital infrastructure and supporting the digital transformation of key sectors. Objectives: This paper aims to assess the impact of government expenditure on the intersectoral embeddedness of information processes in Kazakhstan’s economy from 2001 to 2023, with a focus on how targeted public investment fosters digital integration across industries. Methods/Approach The analysis employs annual Input-Output Table data and utilizes the dependency coefficient as a measure of information process integration, applying the Autoregressive Distributed Lag (ARDL) model to estimate short- and long-term effects while controlling for macroeconomic variables such as inflation and unemployment. Results: The results show that increased government spending significantly enhances the integration of information processes with other sectors of the economy, confirming the positive impact of public investment in digital infrastructure, digitalization of public services, and support for AI adoption. Conclusions: These findings underscore the importance of sustained, well-targeted government expenditure in accelerating digital transformation. Policy recommendations include prioritizing the expansion of digital infrastructure, promoting interoperability, investing in digital skills, and ensuring that the integration of AI technologies is ethical and inclusive across all sectors of the economy.