Social safety nets (SSNs) are focal policies that support poor and vulnerable households, most prominently through cash transfers. However, strong discrepancies persist across countries in terms of spending, coverage, and targeting of SSNs, with larger gaps often found in low-income countries. Digital technologies can prove vital in supporting a rapid expansion of SSNs around the world. Governments need to do three things for this: identify, verify, and pay. This note explains how countries can make considerable improvements across these three dimensions despite differences in capacity levels. It examines six case studies of countries―Brazil, Democratic Republic of Congo, India, Pakistan, Togo, and Türkiye―that used and adapted digital technologies in different ways due, in large part, to variations in digital SSN infrastructures in place before the onset of COVID-19. These case studies illustrate how (1) innovative digital technologies can help overcome lack of government capacity to implement SSNs, even in countries with a lack of digital infrastructure or capacity, and (2) countries with stronger digital infrastructure or investments in SSNs before COVID-19 were able to complement existing policies to reach more people and to provide stronger responses than countries without preexisting SSN frameworks.
This note discusses, through selected country case studies, how digital health records and telemedicine can improve delivery quality, access to underserved populations, and resource utilization in healthcare. In addition, it shows how digital disease surveillance tools can identify outbreaks and track the spread of diseases, while novel digital platforms can facilitate patent licensing and international pooled procurements for better drug access in developing countries. Ensuring safe and well-regulated collection and use of healthcare data, as well as facilitating standardization and interoperability of digital infrastructure in different sectors is critical for the success of these interventions.
Digitalization has the potential to bring great economic benefits, but it is also creating new challenges. This note focuses on trade in digitized products, its fiscal revenue implications, and the appropriate role for domestic and border tax instruments in this context. As digitized trade increases, in part replacing physical trade, developing countries that rely on tariff revenue to support fiscal capacity will face the difficult question of how best to tax these new trade flows and maintain fiscal balances. This note shows that, independently of the future trajectory of trade in digitized products, broad-based nondiscriminatory value-added taxes are preferrable to tariffs both from an economic efficiency and from a revenue standpoint. These taxes are also easier to implement and administer. In this context, the World Trade Organization (WTO) moratorium on customs duties on electronic transmission can help to effectively channel developing countries’ tax reform efforts in a more efficient direction. This transition would require further investment by the global community in modernizing the tax and customs infrastructure of developing countries to adequately meet revenue needs in the digital era.
The digitalization of public services, known as GovTech, can disrupt traditional mechanisms to promote economic development (for example, financial inclusion, education, and health care), improve the delivery of public services, and expedite development objectives. For GovTech to be successful in enhancing the public sector's efficiency, transparency, and inclusiveness, its design and implementation require that private interests be aligned with the overarching goal of a “citizen-oriented” digitalization. Because the interests of the state and private providers are often antagonistic, the social dividends from GovTech remain contingent on implementing the appropriate market structure through adequate property rights and regulatory oversight.