Environmental protection expenditure, digital government, and EU membership: Cross-country panel evidence
-
DOIhttp://dx.doi.org/10.21511/ee.17(3).2026.14
-
Article InfoVolume 17 2026, Issue #3, pp. 228–250
- 3 Views
-
0 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
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.
- Keywords
-
JEL Classification (Paper profile tab)H50, H11, O33, Q58
-
References84
-
Tables8
-
Figures3
-
- Figure 1. Standardized effect of the E-Government Development Index across COFOG divisions
- Figure 2. E-government development and environmental protection expenditure in Latvia, Ukraine, and Armenia
- Figure 3. Distribution of within-country correlations between the index and environmental protection expenditure
-
- Table 1. Variables, definitions, and sources
- Table 2. Descriptive statistics, estimation sample
- Table 3. Digital government and environmental protection expenditure, two-way fixed effects
- Table 4. Digital government across the ten COFOG divisions
- Table 5. Three focus economies
- Table 6. Robustness checks, global sample
- Table A1. Economies in the estimation sample
- Table B1. Pairwise correlations, estimation sample
-
- Abbasov, J. (2023). A new simple test to evaluate the efficiency of government spending. Economics and Sociology, 16(3), 97-124.
- Abou-Moghli, A. A., & Shatem, M. (2024). Examining the impact of e-governance on organizational strategy execution in the Jordanian ICT industry. Problems and Perspectives in Management, 22(3), 185-197.
- Ahmed, M. A. M. (2025). The impact of government expenditure policies on the exchange rate. Public Governance, Regulation and Law, 1(1), 65-74.
- Al-Smadi, M. O. (2025). Insurance sector readiness for digital transformation: Empirical evidence from Jordan. Insurance Markets and Companies, 16(1), 33-41.
- Asare, K. N. (2025). Digital transformation in accounting for sustainable development: Mapping the intellectual structure. Financial Markets, Institutions and Risks, 9(4), 1-15.
- Bashynska, I., & Dyskina, A. (2018). The overview-analytical document of the international experience of building smart city. Business: Theory and Practice, 19, 228–241.
- Bashynska, I., Mukhamejanuly, S., Malynovska, Y., Bortnikova, M., Saiensus, M., & Malynovskyy, Y. (2023). Assessing the outcomes of digital transformation smartization projects in industrial enterprises: A model for enabling sustainability. Sustainability, 15(19), 14075.
- Bezverkhyi, K., Parasii-Verhunenko, I., Pylypenko, O., Yurchenko, O., Matiukha, M., & Poddubna, N. (2025). Features of audit of sustainability reporting: Empirical experience of the European Union countries. Financial and Credit Activity Problems of Theory and Practice, 3(62), 79-94.
- Burrell, D. N., Wansi, T., Morin, S. L., Rahim, E., Tessema, D. B., Alemu, B. A., Harris, N., & Conley, L. (2025). Harnessing behavioral economics, green promotions, and financial incentives as catalysts for sustainable practices. Green Transition and Sustainable Development, 1(1), 1-16.
- Cameron, A. C., Gelbach, J. B., & Miller, D. L. (2008). Bootstrap-based improvements for inference with clustered errors. The Review of Economics and Statistics, 90(3), 414-427.
- Chahdi, F., Riache, S., & Louail, B. (2025). The impact of digitalisation on resilience to socio-economic challenges: A case for e-marketing to ensure sustainable development. SocioEconomic Challenges, 9(1), 252-263.
- Cinelli, C., Forney, A., & Pearl, J. (2024). A crash course in good and bad controls. Sociological Methods & Research, 53(3), 1071-1104.
- Council of the European Union. (2024, June 25). EU opens accession negotiations with Ukraine [Press release].
- Council of the European Union. (2026, June 15). EU and Ukraine open first accession negotiations cluster [Press release].
- de Chaisemartin, C., & D’Haultfœuille, X. (2023). Two-way fixed effects and differences-in-differences with heterogeneous treatment effects: A survey. The Econometrics Journal, 26(3), C1-C30.
- Dudzevičiūtė, G. (2023). Dependence of economic growth on government expenditure by function in the Baltic states. Journal of International Studies, 16(1), 9-22.
- Eggers, A. C., Tuñón, G., & Dafoe, A. (2024). Placebo tests for causal inference. American Journal of Political Science, 68(3), 1106-1121.
- European Parliament. (2025, March 26). Joint statement on the adoption by the National Assembly of Armenia of the law on the initiation of the process of accession of Armenia to the EU.
- Eurostat. (2025). Government expenditure on environmental protection. Statistics Explained.
- Filipova, M., Djakona, A., & Haram, V. (2025). Determinants of government expenditures in the Baltic states. Financial Markets, Institutions and Risks, 9(2), 66–89.
- Gharbaoui, O. E., Boukhari, H. E., & Salmi, A. (2024). The transformative power of recommender systems in enhancing citizens’ satisfaction: Evidence from the Moroccan public sector. Innovative Marketing, 20(3), 224-236.
- Havrylenko, O., & Myroshnychenko, I. (2025). Does renewable energy enhance energy security? Evidence from a Granger causality analysis of countries in the context of geopolitical risks and socioeconomic challenges. SocioEconomic Challenges, 9(2), 207-219.
- Hrytsenko, L., Sheliemina, N., & Latysh, D. (2026). Digital government and health system performance: Does digitalization improve the effectiveness of health expenditure? Health Economics and Management Review, 7(1), 21-40.
- Huang, J., Cui, J., & Dong, F. (2024). Impact of e-governments on carbon emission reduction targets: Evidence from global 51 countries. Clean Technologies and Environmental Policy, 26(7), 2357-2377.
- International Monetary Fund. (2026). Government finance statistics: Expenditure by function of government (COFOG) [Data set].
- Ivanenko, V., & Muraviov, K. (2026). Compliance as a driver of sustainable economic development and business growth in the context of European integration. Journal of Vasyl Stefanyk Precarpathian National University, 13(2), 148-162.
- Ivashchenko, A. I., Sybirianska, Y. V., & Polischuk, Y. A. (2017). Information and communication platform as a complex approach for solving information asymmetry problems. CEUR Workshop Proceedings, 1844, 111-126.
- Kajda, K., & Karwot, J. (2025). The role of artificial intelligence in revolutionizing industrial automation for municipal waste management in Industry 4.0. Green Transition and Sustainable Development, 1(1), 37-63.
- Kajda, K., & Karwot, J. (2026). AI-driven waste classification and smart management in Poland’s Industry 4.0 framework: CNN-based solutions for sustainable municipal systems. Green Transition and Sustainable Development, 1(2), 65-87.
- Keser, I., & Mudrić, M. M. (2026). The role of artificial intelligence in digital sustainability and governance systems. Economics Ecology Socium, 10(2), 81-93.
- Kirichok, O., Orlovska, Y., Zhanseitova, G., Oriekhova, A., Babaiev, D., Havrylenko, O., & Vasylieva, T. (2025). Bridging digital innovation and energy justice: The role of artificial intelligence in advancing energy equity. Environmental Economics, 16(4), 166-181.
- Kolupaieva, I., & Tiesheva, L. (2023). Asymmetry and convergence in the development of digital technologies in the EU countries. Equilibrium. Quarterly Journal of Economics and Economic Policy, 18(3), 687-716.
- Kostev, R. (2025). GIS-based assessment model of resilient management and monitoring of water resources. Economics Ecology Socium, 9(3), 33-47.
- Kozhakhmetova, A., Tazhiyeva, Z., Zhidebekkyzy, A., & Bács, Z. (2025). Effects of digital transformation on green investment: Evidence from developing economies. Journal of International Studies, 18(2), 138-158.
- Kuzior, A., Vakulenko, I., Kolosok, S., Saher, L., & Lyeonov, S. (2023). Managing the EU energy crisis and greenhouse gas emissions: Seasonal ARIMA forecast. Problems and Perspectives in Management, 21(2), 383-399.
- Ladonko, L., Mozhaikina, N., Buryk, Z., Ostrovskyi, I., & Saienko, V. (2022). Regional aspects of the economy modernization: The qualitative evidence from EU countries. International Journal for Quality Research, 16(3), 851-862.
- Litovtseva, V., Krawczyk, D., Kuzior, A., Brychko, M., & Vasylieva, T. (2022). Marketing research in the context of trust in the public sector: A case of the digital environment. Innovative Marketing, 18(4), 133-147.
- Lyeonov, S., Artyukhov, A., Bokenchina, L., Sitenko, D., Yehorova, Y., Zhytar, M., & Moroz, A. (2025). The role of feed-in tariffs in encouraging insurance companies to invest in renewables. Insurance Markets and Companies, 16(1), 115-130.
- Lyeonov, S., Mielczarek, L., Krawczyk, D., & Popp, J. (2025). The role of government AI readiness in shaping renewable electricity capacity and output. Human Technology, 21(3), 668-693.
- MacKinnon, J. G., & Webb, M. D. (2018). The wild bootstrap for few (treated) clusters. The Econometrics Journal, 21(2), 114-135.
- MacKinnon, J. G., Nielsen, M. Ø., & Webb, M. D. (2023). Cluster-robust inference: A guide to empirical practice. Journal of Econometrics, 232(2), 272-299.
- Mansour, M., Albawwat, A., Marei, A., Mujahed, M., & Nofal, M. (2026). The impact of board governance effectiveness on carbon disclosure in the banking sector. Banks and Bank Systems, 21(1), 97-109.
- Masyk, M., Buryk, Z., Radchenko, O., Saienko, V., & Dziurakh, Y. (2023). Criteria for governance’ institutional effectiveness and quality in the context of sustainable development tasks. International Journal for Quality Research, 17(2), 501-514.
- Megbowon, E. T., & Zerihun, M. F. (2025). Government health expenditure gap analysis: A study on the commitment to international agreement and the role of economic and institutional factors. Health Economics and Management Review, 6(1), 95-109.
- Ministry of Economy, Environment and Agriculture of Ukraine. (2025, December 4). Rosiiska ahresiia vzhe sprychynyla ekolohichni ruinuvannia v Ukraini bilshe 6 trln hryven [Russian aggression has already caused more than UAH 6 trillion in environmental damage in Ukraine].
- Mohapatra, B. P. (2026). Own revenue growth of rural local governments and socio-economic challenges. SocioEconomic Challenges, 10(1), 105-119.
- Ntuli, F., Ntshangase, B. A., & Msosa, S. K. (2025). Innovative financial management reforms: A catalyst of good governance in the South African public sector. Financial Markets, Institutions and Risks, 9(4), 16-29.
- Obelovska, K., Abziatov, A., Doroshenko, A., Dronyuk, I., Liskevych, O., & Liskevych, R. (2025). Analysis of digital skills and infrastructure in EU countries based on DESI 2024 data. Future Internet, 17(6), 228.
- OECD & UCLG. (2022). 2022 synthesis report: World observatory on subnational government finance and investment. OECD Publishing.
- Pakhnenko, O., Yarovenko, H., Semenog, A., Mordan, Y., & Tarasenko, O. (2025). Uncovering patterns of digital transformation of European economies using self-organizing maps. Problems and Perspectives in Management, 23(3), 581-596.
- Pasko, O., Zhang, L., Bezverkhyi, K., Nikytenko, D., & Khromushyna, L. (2021). Does external assurance on CSR reporting contribute to its higher quality? Empirical evidence from China. Investment Management and Financial Innovations, 18(4), 309-325.
- Pädam, S., & Ehrlich, Ü. (2014). Public environmental expenditures in Estonia during 1995–2011. Estonian Discussions on Economic Policy, 22(1).
- Piekut, M., & Rybaltowicz, J. (2024). Comparative study of government expenditure on social protection in the Visegrád Group and Benelux. Economics and Sociology, 17(1), 280-294.
- Pimenow, S., Pimenowa, O., Sitnicki, M. W., Dluhopolskyi, O., & Zieliński, M. (2026). Energy use, costs and economic resilience of EU agriculture: The role and potential of CAP eco-schemes in reducing energy intensity. Energies, 19(4), 1016.
- Prokopenko, O., Chechel, A., Sotnyk, I., Omelyanenko, V., Kurbatova, T., & Nych, T. (2021). Improving state support schemes for the sustainable development of renewable energy in Ukraine. Polityka Energetyczna, 24(1), 85-100.
- Prokopenko, O., Koval, V., Yereshko, J., Kuzkin, O., Skibina, T., & Travin, V. (2024). Economic and environmental limitations of sustainable energy transition in Europe. Problemy Ekorozwoju, 19(2), 66-80.
- Prokopenko, O., Trypolska, G., Bashynska, I., Telizhenko, O., Strelcow, W., Kovalenko, Y., Lytvynenko, S., & Woźna, A. (2025). Financial mechanisms and risk-based modeling of energy efficiency and renewable energy adoption in households. Energies, 18(21), 5799.
- Rainey, C. (2014). Arguing for a negligible effect. American Journal of Political Science, 58(4), 1083-1091.
- Roodman, D., Nielsen, M. Ø., MacKinnon, J. G., & Webb, M. D. (2019). Fast and wild: Bootstrap inference in Stata using boottest. The Stata Journal, 19(1), 4-60.
- Saher, L., Vakulenko, I., & Oleksich, Z. (2025). What makes growth inclusive? Cluster-based insights for EU member states. Business Ethics and Leadership, 9(3), 275-289.
- Samusevych, Y., Rącka, I., Vasylieva, T., & Tóth, Á. (2024). Environmental tax reform efficiency: Prerequisites and consequences. Journal of International Studies, 17(4), 90-108.
- Shygun, M., & Bezverkhyi, K. (2026). Sustainability reporting as a tool for corporate social responsibility. European Journal of Sustainable Development Research, 10(1), em0337.
- Taliouris, E., & Trihas, N. (2026). Policy and governance for corporate social responsibility and sustainable tourism: An EU policy analysis and its impact in Greece. Public Governance, Regulation and Law, 2(1), 51-65.
- Tong, G., Yang, C., & Zhang, Y. (2026). Government digital governance and fiscal expenditure efficiency: Empirical evidence from the national pilot policy of information benefiting the people in China. Economic Change and Restructuring, 59(3), 73.
- Tossekbayev, K., Dinits, R., & Rekun, Y. (2025). Digitalization in healthcare industry: Is there a nexus with the population’s life expectancy? Health Economics and Management Review, 6(1), 71-94.
- Tsymbal, L., & Demediuk, A. (2025). Economic security of Ukraine under war: A foreign trade perspective. Safety and Security Advances, 1(1), 63-78.
- Ugulava, G. (2026). Two faces of decline in public governance: Accountability erosion and rent-seeking. Public Governance, Regulation and Law, 2(1), 20-32.
- United Nations. (2024a). UN e-government knowledge base [Data set]. United Nations Department of Economic and Social Affairs.
- United Nations. (2024b). United Nations e-government survey 2024: Accelerating digital transformation for sustainable development. United Nations Department of Economic and Social Affairs.
- Vakhovych, I. M., Kaminska, I. M., & Ropotan, I. V. (2015). Conceptual foundations and reasonable necessity of financial convergence of sustainable development of regions in the country. Naukovyi Visnyk Natsionalnoho Hirnychoho Universytetu, 1, 138-144.
- Valaskova, K., Juracka, D., Nagy, M., & Chaudhuri, S. (2025). Digital readiness across the European Union: A multidimensional empirical assessment of structural determinants, intra-regional disparities, and strategic implications in the era of Industry 5.0. Equilibrium. Quarterly Journal of Economics and Economic Policy, 20(3), 1035-1086.
- Vasylieva, T., Krawczyk, D., Rącka, I., & Fenyves, V. (2026). Digital government and quality of life: Unpacking the human-centred mechanisms of e-government development. Human Technology, 22(1), 178-197.
- Wen, J., Zhang, X., & Yang, Y. (2025). Greening government: Exploring the impact of digital government transformation on CO2 emission. Environment, Development and Sustainability.
- Whitmore, A. (2012). A statistical analysis of the construction of the United Nations E-Government Development Index. Government Information Quarterly, 29(1), 68-75.
- World Bank. (2026a). World development indicators [Data set].
- World Bank. (2026b). Worldwide governance indicators [Data set].
- World Bank Group, Government of Ukraine, European Commission, & United Nations. (2025). Ukraine: Fourth rapid damage and needs assessment (RDNA4): February 2022–December 2024. World Bank Group.
- Xu, B., Sun, R., Xi, C., & Wang, Z. (2025). Digital governance and the low-carbon transition: Evidence from double machine learning. Humanities and Social Sciences Communications, 12(1), 907.
- Yardımcı, B., & Aslanertik, B. E. (2025). Corporate governance diversity and environmental performance disclosure in sustainability reporting of industrial companies. Economics Ecology Socium, 9(4), 44-61.
- Yarovenko, H., Bilovodska, V., Bylbas, R., Pankiv, O., Baghirzade, M., Niemi, O., & Djakons, D. (2025). Digital readiness of European countries to combat corruption and cyber threats: Panel analysis. Business Ethics and Leadership, 9(2), 238-265.
- Yefimenko, A., Boronos, V., Serpeninova, Y., & Koldovskyi, A. (2025). Innovative and technological determinants of corruption reduction: How do knowledge and technology contribute to public integrity and transparency? Knowledge Economy and Lifelong Learning, 1(1), 21-34.
- Yefimenko, A., Malaniuk, V., Bagirzadeh, M., Duranowski, W., Djakona, A., Celika, M., & Kalenyuk, I. (2025). Can digitalisation and technological development reduce corruption? Evidence from a structural analysis in Ukraine. Business Ethics and Leadership, 9(2), 266-287.
- Yi, J. (2025). Digital government and carbon emissions: Evidence from China. Frontiers in Environmental Science, 13, 1470724.
- Zakharkina, L., Rubanov, P., Kabdybay, A., Zakharkin, O., & Chernobay, L. (2025). Digitalization – CSR integration in transitional banking: Evidence from Ukraine and Kazakhstan. Banks and Bank Systems, 20(4), 256-275.


