E-Government Adoption, Governance Quality, and Fiscal Sustainability in Central and Eastern Europe

Digital technologies have fundamentally changed how public administration operates, moving it from traditional bureaucratic structures toward more efficient and responsive systems. This study analyzes the links between e-government usage (measured as the percentage of individuals who interact with public authorities via online platforms), governance quality, and fiscal performance across ten Central and Eastern European countries from 2010 to 2023. Using a fixed-effects panel data model, we investigate whether higher e-government usage is associated with stronger government effectiveness, improved budget balances, and more sustainable public debt levels, while controlling for key macroeconomic and structural factors. Employing a fixed-effects panel data model, we examine whether greater use of e-government services is associated with stronger government effectiveness, improved budget balances, and more sustainable public debt levels, while accounting for key macroeconomic and structural factors. The findings show a positive and statistically significant association between e-government usage and government effectiveness. The links to fiscal outcomes are more nuanced: e-government usage is associated with better budget balances, mainly through indirect channels such as higher tax compliance and tighter expenditure control. In contrast, its association with public debt levels is weaker and appears to depend more strongly on broader macroeconomic conditions. Overall, the findings suggest that greater e-government usage is associated with improvements in governance quality in the CEE region, although its contribution to long-term fiscal sustainability remains conditional on the quality of existing institutions.