Advanced Modelling of the Interplay between Public Governance and Digital Transformation: New Empirical Evidence from Structural Equation Modelling and Gaussian and Mixed-Markov Graphical Models

Abstract

The research conducted in this paper aims to appraise the interlinkages between public governance and digital transformation at the level of the European Union. We employ two advanced approaches to modelling longitudinal data compiled at the level of the EU-27 Member States during the 2010–2021 period, namely, structural equation modelling and Gaussian and Mixed-Markov graphical models. The main results indicate positive impacts on government effectiveness arise from the human capital involved in complex activities that engage the use of digital services, e-government users, and integration of digital technologies, and the effect of demands and supplies of digital public services using open data. This further supports the government’s capabilities in enforcing regulations and policies to control corruption and sustain the achievement of digital skills, at least at a basic level, by the entire society. Moreover, good perceptions and a higher degree of confidence in the rules of law have a positive influence on the need for connectivity of digital services, especially the supply side of fixed and mobile broadband. Lastly, a relevant impact of regulatory quality is identified in the digital connectivity of broadband infrastructure, which is enclosed by the public governance representative indicators under the influence of a stronger integration of digitalisation.