This paper studies the effect of digitalization on the perception of corruption and trust in tax officials in Africa. Using individual-level data from Afrobarometer surveys and several indices of digitalization, we find that an increase in digital adoption is associated with a reduction in the perception of corruption and an increase in trust in tax officials. Exploiting the exogeneous deployment of submarine cables at the local level, the paper provides evidence of a negative impact of the use of Internet on the perception of corruption. Yet, the paper shows that the dampening effect of digitalization on corruption is hindered in countries where the government has a pattern of intentionally shutting down the Internet, while countries that successfully promote information and communication technology (ICT) enjoy a more amplified effect.
level, suggesting that greater digital adoption is correlated with lower perception of corruption in tax officials.
Table 1. Digitalization and corruption
Digital Adoption Index (DAI)
Online Service Index
Methodology : DAI is a composite index that measures the depth and breadth of adoption of digital technologies in 171 countries, spanning every region and income group. It is based on three sectoral sub-indices covering businesses, people, and governments, with each sub-index assigned an equal weight:
DAI (Economy) = DAI (Businesses) + DAI (People) + DAI (Governments)
• DAI (Business): The Business cluster is the simple average of four normalized indicators: the percentage of businesses with websites, number of secure servers, download speed, and 3
This paper examines the role of Fintech in financial inclusion. Using Global Findex data and emerging fintech indicators, we find that Fintech has a higher positive correlation with digital financial inclusion than traditional measures of financial inclusion. In the second stage of our empirical investigation, we examine the key factors that are correlated with the Fletcher School’s three digital divide – gender divide, class (rich-poor) divide and rural divide. The results indicate that greater use of fintech is significantly associated with a narrowing of the class divide and rural divide but there was no impact on the gender divide. These findings imply that Fintech alone may not be sufficient to close the gender gap in access to financial services. Fintech development may need to be complemented with targeted policy initiatives aimed at addressing the gender gap directly, and at changing attitudes and social norms across demographics.
Higher digital connectivity is expected to bring opportunities to leapfrog development in sub-Saharan Africa (SSA). Experience within the region demonstrates that if there is an adequate digital infrastructure and a supportive business environment, new forms of business spring up and create jobs for the educated as well as the less educated. The paper first confirms the global digital divide through the unsupervised machine learning clustering K-means algorithm. Next, it derives a composite digital connectivity index, in the spirit of De Muro-Mazziotta-Pareto, for about 190 economies. Descriptive analysis shows that majority of SSA countries lag in digital connectivity, specifically in infrastructure, internet usage, and knowledge. Finally, using fractional logit regressions we document that better business enabling and regulatory environment, financial access, and urbanization are associated with higher digital connectivity.
largest variation. The second component is still a linear transformation, orthogonal to the first one, explaining the largest portion of residual variation.
9 An alternative index with the same acronym is the Digital Adoption Index of World Bank (2016) . This index is based on three sectoral sub-indices covering businesses, people, and governments, with each sub-index assigned an equal weight: DAI (Economy) = DAI (Businesses) + DAI (People) + DAI (Governments). Each sub-index is the simple average of several normalized indicators measuring the adoption rate for