Olga Niemi

Type of the article: Research Article

Abstract
Environmental protection accounts for a small share of public budgets, which makes its determinants a practical policy question. Digital administration is expected to improve public resource allocation, and environmental protection is an information-intensive function where that expectation should be visible. This study measures the association between digital government development and the share of public expenditure allocated to environmental protection, compares it with the other nine budget functions, and describes Latvia, Ukraine, and Armenia as illustrations of divergent expenditure trajectories under broadly comparable digital government development. The analysis covers 592 country-year observations for 68 economies, including 13 post-Soviet economies, over 2004 to 2024, combining the United Nations E-Government Development Index with IMF Government Finance Statistics in a two-way fixed effects design with wild cluster bootstrap inference. Digital government development is not associated with the environmental share (β = –0.002, p = 0.997), and environmental protection records the smallest standardized effect among the ten functions, indistinguishable from zero, compared with 0.451 for social protection. European Union membership is associated with a higher environmental share (β = 0.331, p = 0.004), although the estimate is identified from four changes of membership status. A stronger association inside the post-Soviet subsample does not survive a specification that allows every coefficient to differ by group. The study therefore finds no evidence that higher digital government development alone is systematically associated with a larger environmental share of public budgets.

Acknowledgments
The contribution of Liudmyla Zakharkina to this study was carried out within the framework of the research project “GovTech for Ukraine: A Digital, Secure, Transparent, and Equitable State in Times of War and Post-War Reconstruction” (state registration No. 0126U000544), funded by the Ministry of Education and Science of Ukraine.