Anatolii Melnychuk

Type of the article: Research Article

Abstract
Artificial intelligence is shaping digital governance, with global organizations emphasizing its opportunities and risks for public administration. The study aims to assess whether advancements in AI, measured by the AI Vibrancy Score (AIVS) and the Government AI Readiness Index (GAIRI), drive improvements in the E-Government Development Index (EGDI). Using panel data methods, the analysis draws on data from 36 countries for 2018–2022 (AIVS–EGDI) and 170 countries for 2020–2024 (GAIRI–EGDI), due to differing data availability and indicator coverage periods, applying fixed effects, random effects, and Mundlak specifications, combined with robust inference techniques. The results demonstrate that within-country improvements in AI readiness are positively and robustly associated with higher levels of e-government development, with the FE estimate for the Government AI Readiness Index equal to 0.17 (p < 0.001). RE models reveal stronger cross-country correlations, with coefficients of 2.55 (p < 0.001) for the AI Vibrancy Score and 0.35 (p < 0.001) for AI readiness. However, Mundlak (correlated RE) specifications indicate that the between-country components are statistically insignificant. Yet, the within-country effects remain significant, suggesting that dynamic national reforms and policy-driven progress outweigh inherited structural advantages. Time effects are pronounced, with positive and significant shifts in 2020 (+7.02) and 2022 (+8.10) relative to the baseline year, reflecting the acceleration of digital public administration during the post-pandemic period. Country-specific effects exhibit substantial heterogeneity, ranging from strongly positive deviations (e.g., Denmark, Estonia, Korea) to persistently negative ones (e.g., India, South Africa), underscoring the uneven national trajectories. Robustness checks using clustered standard errors confirm the stability of all key coefficients.

Acknowledgment
This paper was prepared based on the results of a study funded by the Ministry of Education and Science of Ukraine entitled “Digitalization of the public-private partnership system as a driver of the state’s economic security in the war and post-war periods” (registration number: 0126U000543).

Type of the article: Research article

Abstract
In transition economies, banking sector integrity is a critical prerequisite for economic resilience against exogenous shocks. This study evaluates the direct and indirect transmission channels through which public digital governance and systemic crisis shocks relate to banking stability and financial inclusion across 22 transition economies. Utilizing structural equation modeling (SEM) and path analysis based on annual panel data from 2003 to 2024 – supplemented by latent factor analysis, Dumitrescu-Hurlin causality tests, and post-estimation Wald tests – we analyze structural macro-level associations. Empirical results show that the static factor association between digital governance and banking stability is positive but marginally significant (β = 4.102, p = 0.079). In short-run dynamic first-difference specifications, no statistically significant immediate responsiveness is observed (β = 0.027, p = 0.516). Concurrently, improved banking stability significantly co-moves with financial inclusion (β = 0.042, p = 0.008), driven primarily by non-performing loan suppression (λ = −3.684, p = 0.018) and corruption control (λ = 0.034, p = 0.006). Systemic crisis shocks persistently depress both banking stability (β = −0.130, p = 0.009) and citizen financial engagement (β = −0.027, p < 0.001). Post-estimation Wald tests confirm cross-regional slope homogeneity (χ2(1) = 0.48, p = 0.487 for governance-to-stability; χ2(1) = 0.03, p = 0.855 for stability-to-inclusion). Contrary to conventional assumptions, public digital governance does not act as an immediate countercyclical shock absorber, highlighting the necessity of pairing digital reforms with long-term structural policies.

Acknowledgments
Oleksii Zakharkin’s contribution to this article was prepared as part of a research project funded by the Ministry of Education and Science of Ukraine, titled “GovTech for Ukraine: A Digital, Secure, Transparent, and Equitable State in Times of War and Post-War Reconstruction” (registration number: 0126U000544).