Share:


Digitalization of Romanian public administration: a panel data analysis at regional level

    Alexandra Frățilă Affiliation
    ; Mirela Păunescu Affiliation
    ; Elena-Mirela Nichita Affiliation
    ; Paula Lazăr Affiliation

Abstract

Digital transformation of public administration creates opportunities for transparency, accountability, efficiency, and better tax collection. Benefits are even more critical considering the coronavirus crisis when millions of people worldwide engage in online solutions. Our research paper offers clear insights into the public administrations’ strategic management when it comes to the impact of digitalization upon local tax revenues collection. In this setting, we investigate the effects of the digitalization of the Romanian public sector, focusing on local tax revenues collection covering the period 2015–2021. The data was collected from the national platform for e-payments – ghiseul.ro. To assess the impact of digitalization, we opted for the panel data analysis, complemented by reliability and robustness tests. The local tax revenues are settled as the dependent variable and analysed in relationship with the number of payments made via the above-mentioned platform  (assigned as a proxy for digitalization). Gross domestic product per capita, Unemployment rate, and Average net earnings are control variables. Our outcomes show that digitalization impacts local tax revenues, but it differs across the country, the highest impact being registered in the case of macroregion 3. All independent variables are statistically significant, leading to the assumption that the empirical model is accurate.

Keyword : digitalization, local tax revenue, public administration, Romania, panel data analysis, tax collection, tax compliance, Covid-19

How to Cite
Frățilă, A., Păunescu, M., Nichita, E.-M., & Lazăr, P. (2023). Digitalization of Romanian public administration: a panel data analysis at regional level. Journal of Business Economics and Management, 24(1), 74–92. https://doi.org/10.3846/jbem.2023.18574
Published in Issue
Feb 10, 2023
Abstract Views
889
PDF Downloads
810
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

References

Adrangi, B., & Kerr, L. (2022). Sustainable development indicators and their relationship to GDP: Evidence from emerging Economies. Sustainability, 14(2), 1–13. https://doi.org/10.3390/su14020658

Agresti, A. (2007). An introduction to categorical data analysis (2nd ed.). John Wiley & Sons.

Attour, A., & Chaupain-Guillot, S. (2020). Digital innovations in public administrations: Technological or policy innovation diffusion? Journal of Innovation Economics & Management, 1(31), 195–219. https://doi.org/10.3917/jie.pr1.0061

Baltagi, B. H., Kao, C., & Peng, B. (2016). Testing cross-sectional in large panel data models with serial correlation. Econometrics, 4(4), 44. https://doi.org/10.3390/econometrics4040044

Bassey, E., Mulligan, E., & Ojo, A. (2022). A conceptual framework for digital tax administration – A systematic review. Government Information Quarterly, 39(4), 101754. https://doi.org/10.1016/j.giq.2022.101754

Belanger, F., & Hiller, J. S. (2006). A framework for e‐government: Privacy implications. Business Process Management Journal, 12(1), 48–60. https://doi.org/10.1108/14637150610643751

Bojanic, A. N. (2020). The empirical evidence on the determinants of fiscal decentralization. Finanzas y Politica Economica, 12(1), 271–302. https://doi.org/10.14718/revfinanzpolitecon.v12.n1.2020.2656

Bulai, V. C., Horobeț, A., & Belascu, L. (2019). Improving local governments’ financial sustainability by using open government data: An application of high-granularity estimates of personal income levels in Romania. Sustainability, 11(20), 5632. https://doi.org/10.3390/su11205632

Burlacu, S., Patarlageanu, S. R., Diaconu, A., & Ciobanu, G. (2021). E-government in the era of globalization and the health crisis caused by the Covid-19 pandemic, between standards and innovation. In The 20th International Scientific Conference Globalization and its Socio-Economic Consequences 2020, SHS Web of Conferences, 92, 1–8. https://doi.org/10.1051/shsconf/20219208004

Carter, L., & Bélanger, F. (2005). The utilization of e-government services: Citizen trust, innovation and acceptance factors. Information Systems Journal, 15(1), 5–25. https://doi.org/10.1111/j.1365-2575.2005.00183.x

Decman, M., Stare, J., & Klun, M. (2010). E-government and cost-effectiveness: E-taxation in Slovenia. Transylvanian Review of Administrative Sciences, 6(31), 48-57. https://rtsa.ro/tras/index.php/tras/article/view/179

Devereux, M., & Vella, J. (2017). Implications of digitalization for international corporate tax reform. In Gupta, S., Keen, M., Shah, A., & Verdier, G. (Eds.), Digital revolutions in public finance (pp. 91–112). International Monetary Fund. https://doi.org/10.5089/9781484315224.071

Diga, K., & May, J. (2016). The ICT ecosystem: The application, usefulness, and future of an evolving concept. Information Technology for Development, 22(1), 1–6. https://doi.org/10.1080/02681102.2016.1168218

Eliaz, K., & Spiegler, R. (2022). On incentive-compatible estimators. Games and Economic Behavior, 132, 204–220. https://doi.org/10.1016/j.geb.2022.01.002

European Commission. (2022a). Eurostat statistics on digitalization. https://ec.europa.eu/eurostat/web/digital-economy-and-society/data/database

European Commission. (2022b). Eurostat statistics on income and living conditions. https://ec.europa.eu/eurostat/web/income-and-living-conditions/data/database

European Commission. (2022c). Eurostat statistics on transport. https://ec.europa.eu/eurostat/web/transport/data/database

European Commission. (2021). National tax systems: Structure and recent developments. https://ec.europa.eu/taxation_customs/system/files/202106/taxation_trends_2021_country_chapter_romania.pdf

Fanea-Ivanovici, M., Muşetescu, R.-C., Pană, M.-C., & Voicu, C. (2019). Fighting corruption and enhancing tax compliance through digitization: Achieving sustainable development in Romania. Sustainability, 11(5), 1480. https://doi.org/10.3390/su11051480

Feld, M., Fontoura de Barcellos Giacobbo, T. S., & Schuster, W. E. (2021). Technological progress and finance: The effects of digitalization on Brazilian banking fees. EconomiA, 22(2), 85–99. https://doi.org/10.1016/j.econ.2021.09.001

Fischer, C., Heuberger, M., & Heine, M. (2021). The impact of digitalization in the public sector: A systematic literature review. Zeitschrift für Public Policy, Recht und Management, 14(1), 3–23. https://doi.org/10.3224/dms.v14i1.13

Floropoulos, J., Spathis, C., Halvatzis, D., & Tsipouridou, M. (2010). Measuring the success of the Greek Taxation Information System. International Journal of Information Management, 30(1), 47–56. https://doi.org/10.1016/j.ijinfomgt.2009.03.013

Fratila, A., Gavril, I. A., Nita, S. C., & Hrebenciuc, A. (2021). The importance of maritime transport for economic growth in the European Union: A panel data analysis. Sustainability, 13(14), 7961. https://doi.org/10.3390/su13147961

Ghiseul.ro (2022). Romanian database for e-payments. https://www.ghiseul.ro/ghiseul/public/

Gombár, M., Korauš, A., Vagaská, A., & Tóth, Š. (2022). Analytical view on the sustainable development of tax and customs administrtion in the context of selected groups of the population of the Slovak Republic. Sustainability, 14(3), 1891. https://doi.org/10.3390/su14031891

Hanrahan, D. (2021). Digitalization as a determinant of tax revenues in OECD countries: A static and dynamic panel data analysis. Athens Journal of Business & Economics, 7(4), 321–348. https://doi.org/10.30958/ajbe.7-4-2

Hiller, J., & Bélanger, F. (2001). Privacy strategies for electronic government. E-government series. https://www.businessofgovernment.org/sites/default/files/PrivacyStrategies.pdf

Ho, T. K. (2002). Reinventing local governments and the e-government initiative. Public Administration Review, 62(4), 434–444. https://doi.org/10.1111/0033-3352.00197

Im, T., Cho, W., Porumbescu, G., & Park, J. (2014). Internet, trust in government, and citizen compliance. Journal of Public Administration Research and Theory, 24(3), 741–763. https://doi.org/10.1093/jopart/mus037

Iuga, I. C., & Mihalciuc, A. (2020). Major crisis of the XXIst century and impact on economic growth. Sustainability, 12(22), 9373. https://doi.org/10.3390/su12229373

Jacobs, B. (2017). Digitalisation and taxation. In S. Gupta, M. Keen, A. Shah, & G. Verdier (Eds.), Digital revolutions in public finance (pp. 25–57). International Monetary Fund. https://doi.org/10.5089/9781484315224.071

Jenkins, G., & Forlemu, E. (1993). Enhancing voluntary compliance by reducing compliance costs: A taxpayer service approach. Harvard Institute for International Development. https://www.ciat.org/Biblioteca/Revista/Revista_12/enchanging_voluntary_compliance_jenkins_harvard.pdf

Jianu, I., Gavril, I. A., Iacob, S. E., & Hrebenciuc, A. (2021), Income inequalities and their social determinants: An Analysis over developed vs. developing EU Member States. Economic Computation and Economic Cybernetics Studies and Research, 55(2), 125–142. https://doi.org/10.24818/18423264/55.2.21.08

Jingnan, C., Grimshaw, S., & Myles, G. D. (2017). Testing and implementing digital tax administration. In S. Gupta, M. Keen, A. Shah, & G. Verdier (Eds.), Digital revolutions in public finance (pp. 113–146). International Monetary Fund.

Josifidis, K., Supić, N., & Beker Pucar, E. (2017). Institutional quality and income inequality in the advanced countries. Panoeconomicus, 64(2), 169–188. https://doi.org/10.2298/PAN1702169J

Koçak, E., Ŏnderol, S., & Khan, K. (2021). Structural change, modernization, total factor productivity, and natural resources sustainability: An assessment with quantile and non-quantile estimators. Resources Policy, 74, 102433. https://doi.org/10.1016/j.resourpol.2021.102433

Kuldosheva, G. (2021). Challenges and opportunities of digital transformation in the public sector in transition economies: Examination of the case of Uzbekistan (ADBI Working Paper 1248). https://www.adb.org/publications/challenges-opportunities-digital-transformation-uzbekistan

Lovrić, L. (2005). Uvod u Ekonometriju. Ekonomski Fakultet Sveučilišta u Rijeci.

Lund, S., White, O., & Lamb, J. (2017). The value of digitalizing government payments in developing economies. In S. Gupta, M. Keen, A. Shah, & G. Verdier (Eds.), Digital revolutions in public finance (pp. 305–324). International Monetary Fund. https://doi.org/10.5089/9781484315224.071

Maiga, G., & Asianzu, E. (2013). Adoption of e-tax services in Uganda: A model of citizen-based factors. Electronic Government, An International Journal, 10(3/4), 259–283. https://doi.org/10.1504/EG.2013.058784

McCrum-Gardner, E. (2008). Which is the correct statistical test to use? British Journal of Oral and Maxillofacial Surgery, 46(1), 38–41. https://doi.org/10.1016/j.bjoms.2007.09.002

Ministry of Development, Public Works and Administration. Direcţia Pentru Politici Fiscale si Bugetare Locale. (2022). Situaţia veniturilor şi cheltuielilor. http://www.dpfbl.mdrap.ro/sit_ven_si_chelt_uat.html

Ministry of Finance. (2022). Informații execuție bugetară. https://mfinante.gov.ro/ro/domenii/bugetul-de-stat/informatii-executie-bugetara

Mpofu, F. Y. (2022). Taxation of the digital economy and direct digital service taxes: Opportunities, challenges, and implications for African countries. Economies, 10(9), 219. https://doi.org/10.3390/economies10090219

Mudronja, G., Jugović, A., & Skalamera-Alilović, D. (2020). Seaports and economic growth: Panel data analysis of EU port regions. Journal of Marine Science and Engineering, 8(12), 1017. https://doi.org/10.3390/jmse8121017

National Commission for Strategy and Prognosis. (2022). Prognoze în profil teritorial. https://cnp.ro/prognoze-in-profil-teritorial/

National Institute of Statistics. (2020). Fondul de locuinte. https://insse.ro/cms/sites/default/files/field/publicatii/fondul_de_locuinte_2020.pdf

National Institute of Statistics. (2022). Romanian statistics database. http://statistici.insse.ro:8077/tempo-online/

Ndou, V. (2004). e-Government for developing countries: Opportunities and challenges. The Electronic Journal of Information Systems in Developing Countries, 18(1), 1–24. https://doi.org/10.1002/j.1681-4835.2004.tb00117.x

Nimer, K., Uyar, A., Kuzey, C., & Schneider, F. (2022). E-government, education quality, internet access in schools, and tax evasion. Cogent Economics & Finance, 10(1), 2044587. https://doi.org/10.1080/23322039.2022.2044587

OECD. (2021). Tax administration: Digital resilience in the COVID-19 environment. https://read.oecd-ilibrary.org/view/?ref=1092_1092163-3s4b6i4lda&title=Tax-Administration-Digital-Resilience-in-the-COVID-19-Environment

Olbert, M., & Spengel, C. (2019). Taxation in the digital economy – Recent policy developments and the question of value creation (ZEW Discussion Paper No. 19-010). https://doi.org/10.2139/ssrn.3368092

Pippin, S. E., & Tosun, M. S. (2014). Electronic tax filing in the United States: An analysis of possible success factors. Electronic Journal of E-Government, 12(1), 20–36.

Rogoff, K. (2016). The curse of cash. Princeton University Press. https://doi.org/10.1515/9781400883219

Spatari, M. (2020). The inequity of fiscal system in Romania. Economie și Finanțe. http://library.fes.de/pdf-files/bueros/bukarest/16862.pdf

Thiao, A. (2021). The effect of illicit financial flows on government revenues in the West African Economic and Monetary Union countries. Cogent Social Sciences, 7(1), 1–24. https://doi.org/10.1080/23311886.2021.1972558

Thorsten, T., & Herbert, B. (2007). Jarque-Bera test and its competitors for testing normality: A power comparison. Journal of Applied Statistics, 34(1), 87–105. https://doi.org/10.1080/02664760600994539

Țibulcă, I. L. (2021). The impact of the COVID-19 pandemic on tax revenues in the EU. Economic Research-Ekonomska Istraživanja. https://doi.org/10.1080/1331677X.2021.1954967

Tran-Nam, B., Evans, C., Walpole, M., & Ritchie, K. (2020). Tax compliance costs: Research methodology and empirical evidence from Australia. National Tax Journal, 53(2), 229–252. https://doi.org/10.17310/ntj.2000.2.04

Tugcu, C. T. (2018). Panel data analysis in the Energy-Growth Nexus (EGN). In A. N. Menegaki (Ed.), The economics and econometrics of the Energy-Growth Nexus (pp. 255–271). Academic Press. https://doi.org/10.1016/B978-0-12-812746-9.00008-0

United Nations. (2014). United Nations e-government survey 2014: E-government for the future we want. http://unpan3.un.org/egovkb/Portals/egovkb/Documents/un/2014-Survey/E-Gov_Complete_Survey-2014.pdf

Welch, E. W., Hinnant, C. C., & Moon, J. M. (2005). Linking citizen satisfaction with e-government and trust in government. Journal of Public Administration Research and Theory, 15(3), 371–391. https://doi.org/10.1093/jopart/mui021

Wirtz, B. W., & Daiser, P. (2018). A meta-analysis of empirical e-government research and its future research implications. International Review of Administrative Sciences, 84(1), 144–163. https://doi.org/10.1177/0020852315599047

Wooldridge, J. M. (2010). Econometric analysis of cross section and panel data (2nd ed.). The MIT Press.

World Bank. (2016). World development report 2016: Digital dividends. A World Bank Group Flagship Report. https://www.worldbank.org/en/publication/wdr2016

World Bank Group. (2009). A handbook for tax simplification. https://openknowledge.worldbank.org/bitstream/handle/10986/28206/588150WP0FIAS110BOX353820B01PUBLIC1.pdf;sequence=1

Yang, K., & Rho, S.-Y. (2007). E-government for better performance: Promises, realities, and challenges. International Journal of Public Administration, 30(11), 1197–1217. https://doi.org/10.1080/01900690701225556