Digital Public Infrastructure: Evidence Compendium

This document provides a compilation of research and evidence on the economics of Digital Public Infrastructure (DPI) implementations globally. It aims to inform senior policy makers, economists, and others interested in understanding the potential impact of DPI on economic growth, social inclusion, and public sector efficiency. The document highlights key findings from various studies and reports, providing a valuable resource for those seeking to leverage DPI for sustainable development.

Key Insights

Can DPI boost economic growth?

Digital payments adoption and biometric identification can significantly impact economic growth.

• A 2024 study in India found that digital payments adoption boosted household incomes and small business activities (Dubey, Tamanna Singh and Purnanandam, Amiyatosh).
• A 2012 study in Malawi reported that biometric identification improved loan repayment by over 40% and reduced fraud (Giné, Xavier, Jessica Goldberg, and Dean Yang).
• Brazil’s instant payments system, Pix, creates economic value by settling transactions immediately and reducing transaction fees (IMF Staff Country Reports 2023).

Can DPI improve women’s empowerment?

Direct digital Government to People (G2P) payments and digital ID linked to cash transfers empower women.

• A 2021 report showed that digital G2P transfers to women’s accounts in India increase income predictability and control (Field, Erica, Rohini Pande, Natalia Rigol, Simone Schaner, and Charity Troyer Moore).
• A 2022 World Bank study in Pakistan found that linking digital ID to cash transfers tripled women’s ability to collect their own social assistance (Clark, et al).

Can DPI reduce leakage and enhance government savings?

Direct digital transfers of subsidies and digital identity can reduce leakage and improve efficiency in welfare programs.

• A forthcoming 2024 study finds that direct digital transfer of cooking fuel subsidies in India led to a reduction in leakage from the program (Barnwal).
• A 2018 study in India found that tying workfare programs to digital identity reduced payment lags and increased demand for the program (Agarwal, Sumit and Prasad, Shradhey Parijat and Sharma, Nishka and Tantri, Prasanna L.).
• Nigeria’s e-ID system for civil servants saved the government US$1.12 billion from 2007 to 2014, eliminating approximately 60,000 fictitious employees. (Gelb, Alan, and Ana Diofasi Metz).

Can DPI reduce time spent in and traveling to government offices?

Digital transformation and mobile money transfers can save time and reduce costs for citizens.

• A 2010 report in Niger found that sending social assistance via mobile money saved recipients more than 4 hours in travel and waiting time (Aker, Jenny C., and Isaac M. Mbiti).
• A 2022 study from Bangladesh demonstrated that digital transformation centers resulted in savings of time, cost, and government visits (UNDP).

How does DPI create inclusion or exclusion?

DPI can both promote inclusion and exacerbate exclusion, depending on implementation.

• A 2019 Bank of International Settlements report found that India’s Aadhaar ID enabled an increase in bank accounts in nine years that would have taken 47 years along a typical development trajectory (The design of digital financial infrastructure: lessons from India).
• However, a 2021 report found that a “national security approach” to mandatory digitization of ID in Uganda exacerbated existing exclusion of women and the elderly.

Key Statistics & Data

• India: Digital payments adoption boosted household incomes and small business activities (2024 study).
• Malawi: Biometric identification improved loan repayment by over 40% and reduced fraud (2012 study).
• Brazil: Pix payment settles in 3 seconds on average (2023 IMF Report).
• Pakistan: Linking digital ID to cash transfers tripled women’s ability to collect their own social assistance (2022 World Bank study).
• Nigeria: e-ID system saved the government US$1.12 billion from 2007 to 2014 (2018 report).
• India: The elimination of fraud and duplicate entries in public benefits rolls has saved India 3.4 trillion rupees (approximately US$41 billion) (2024 Government of India claim).
• Rwanda: Electronic Population Register associated with an increase in identity coverage to 98% of residents (2021 World Bank Report).

Methodology

This compendium does not describe any specific methodologies, instead compiling various studies that do. Methodologies mentioned in the source documents include:

• Randomized controlled trials to measure the impact of digital payments and biometric identification.
• Econometric analysis to estimate the impact of digital transformation on various outcomes.
• Qualitative research to understand the social and political implications of DPI.
• Time and Motion studies to measure the efficiency gains from digital processes.
• Literature review of existing research on DPI.

Implications and Conclusions

The document emphasizes the potential of DPI to drive economic growth, empower women, enhance government efficiency, and promote financial inclusion. However, it also acknowledges the risks of exclusion and the need for careful implementation to ensure that DPI benefits all members of society. Further research is needed to understand the long-term impacts of DPI and to develop best practices for its design and deployment.