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E-government, inclusive growth, and the legitimacy of capitalism: lessons from estonia

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  • Espinosa, Victor I.
  • Pino, Antonia

Abstract

This paper examines how e-government (EG) can help re-legitimize capitalism by embedding the principles of transparency, trust, and security (TTS) into public governance. Using Estonia’s post-Soviet digital transformation as a case study, we argue that TTS-based EG reduces corruption, curbs rent-seeking, fosters inclusive growth, and rebuilds public confidence in market institutions. While Estonia is not a universally replicable model, it offers a compelling proof of concept: when digital reforms are grounded in democratic norms, EG can enhance the perceived fairness, accountability, and legitimacy of capitalism. We adopt a within-case process-tracing approach, combining institutional analysis with international indices and public opinion data. The findings offer both theoretical and policy-relevant insights for democracies seeking to modernize capitalism through principled digital transformation.

Suggested Citation

  • Espinosa, Victor I. & Pino, Antonia, 2025. "E-government, inclusive growth, and the legitimacy of capitalism: lessons from estonia," Journal of Economic Behavior & Organization, Elsevier, vol. 238(C).
    • Handle: RePEc:eee:jeborg:v:238:y:2025:i:c:s0167268125003671
    DOI: 10.1016/j.jebo.2025.107248
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    Keywords

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    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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