What Shapes Global Diffusion of e-Government

What Shapes Global Diffusion of e-Government: Comparing the Influence of National Governance Institutions*

Bijan Azad, American University of Beirut, Lebanon Samer Faraj, McGill University, Canada Jie Mein Goh, University of Maryland, USA Tony Feghali, American University of Beirut, Lebanon Abstract Prior research has established the existence of a differential between industrialized and other countries for e-Government diffusion. It attempts to explain this divide by identifying economic and technical variables. At the same time, the role of national governance institutions in e-Government diffusion has been relatively under-theorized and under-studied. The authors posit that, the existing national governance institutions shape the diffusion and assimilation of e-Government in any country via associated institutions in three key sectors: government, private sector and non-governmental organizations. This paper develops and tests a preliminary model of e-Government diffusion using the governance institutional climate as represented via democratic practices, transparency of private sector corporate governance, corruption perception, and the free press. The results indicate that the level of development of national governance institutions can explain the level of e-Government diffusion over and above economic and technical variables. The authors’ research contributes to the literature by providing initial evidence that the existing national governance institutions influence and shape e-Gov diffusion and assimilation beyond the adoption stage.

Keywords: Cross-Country; E-Government; Global Diffusion; Governance; Institutions

*Forthcoming in Journal of Global Information Management

INTRODUCTION Electronic government1 (e-Gov) researchers have found that in some countries the focal systems are being assimilated at a much slower rate than their initial adoption would have implied (Mayer-Schönberger & Lazer, 2007). These countries have yet to embed the underlying systems in their government operations. As a result, these nations fail to realize the promised benefits of e-Gov, i.e., more effective and efficient delivery of services and information to citizens and firms. Indeed, there appears to be an e-Gov differential developing among nations akin to the so called digital divide. This has led some researchers to draw theoretical and empirical parallels between the two (Helbig, Gil-García, & Ferro, 2009). Initially researchers had attributed this e-Gov divide to differences in IT and network infrastructure as well as a variety of national characteristics (e.g., Norris, 2001). However, more recently some authors have persuasively argued that there is more to this e-Gov divide than technology infrastructure maturity and national culture (e.g., Heeks & Bailur, 2007). A growing stream of research points to the potentially significant role of institutional norms and practices in most countries in shaping e-Gov assimilation (e.g., Fountain, 2001). Indeed there is theoretical precedence for this perspective. Hernando de Soto (2000), in his book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, eloquently argues that a supportive national climate of governance institutions has been an essential but invisible feature of the growth of capitalism in the Western world. His point is that the developing world has often struggled unsuccessfully with transitioning to mature capitalism precisely because there is inadequate attention to the formation and functioning of the focal national governance institutions in these countries (e.g., Stinchcombe, 1997). Focusing on the IT sector within national economies, King and colleagues (King, Gurbaxani, Kraemer, McFarlan, Raman, & Yap, 1994) in their pioneering research have highlighted the critical role that national governance institutions play in the

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diffusion of IT innovations. These national institutions of governance are often embedded within individual public or private organizations and also operate at the societal levels (March & Olsen, 1989). They are referred to as the governance ethos or simply institutions of governance in a country (North, 1990). The institutions of governance are defined broadly as “rules of the game” (World Bank, 2002), that both enable and constrain the actions of social actors as they engage in high stake efforts to carry out e-Gov programs. As a result, some researchers have asserted that diffusion and assimilation of e-Gov, as a public sector IT undertaking, is influenced by the national governance institutions in a given country (e.g., Gronlund & Horan, 2004). Therefore, to produce a deeper understanding of e-Gov divide it is essential to study the potential influence of these institutions on the diffusion of e-Gov at the national level across countries. This paper aims to do so and is inspired by both de Soto’s and King et al.’s works: specifically we want to explore the role of the national governance institutions in e-Gov assimilation across countries globally beyond the influence of technology infrastructure maturity and national economic factors. We propose an exploratory framework which casts diffusion as the level of development of e-Gov. We then link the status of e-Gov development to variables which we propose can represent national governance institutions within any country. This framework is inspired by the work of institutional economists (e.g., North, 1990; Campos & Nugent, 1999; de Soto, 2000), and scholars of IT and institutions (e.g., King et al., 1994; Wilson, 2004). We use data from published sources to explore relationship between the national governance institutional climate and the level of e-Gov development via six (6) preliminary hypotheses. The data sources include: UN Global e-Readiness Report for e-Gov development; the POLITY-IV database on democratic development; Transparency International data on Corruption Perception Index; the World Bank data on Corporate


Governance; Reporters without Borders data on press freedom; the World Bank World Development database for Gross Domestic Product; and World Economic Forum data on Internet penetration. The contributions of this research are threefold. First, it proposes that the national diffusion of e-Gov is shaped by the climate of national governance institutions. Second, it suggests a mechanism for this shaping process via a parsimonious model that represents the national governance institutions. Third, it provides a comparative analysis of diffusion of eGov across 60 countries for which complete data were available. THEORETICAL FOUNDATIONS e-Government Divide: Nascent Theorizing on Diffusion Differences Across Countries As experience with the adoption and implementation e-Gov has accumulated, researchers have provided insight into what appears to work in practice as well as what does not work (e.g., Dwivedi, Weerakkody, & Williams, 2009). The focal unit of analysis of the latter research is often a government agency or a few agencies at a time—i.e., one or more organizations engaging in e-Gov. These studies have provided us with much needed insight and valuable knowledge of making e-Gov systems workable and routinzing their use (e.g., Chen, Chen, Huang, & Ching, 2006; Azad & Faraj, 2009). However, their results are of limited generalizability since their applicability to other organizations and locales often cannot be extended beyond the original country context. As a result, there has been a rising interest in analyzing the diffusion of e-Gov at the country and national level. Two streams of research have emerged which examine the diffusion of e-Gov at the country level. One stream has focused on analyzing the level of diffusion of Internet and e-Gov at the national level in individual countries. The work of Layne and Lee (2001) has served as an initial theme for some of this stream of research among scholars. These studies of e-Gov have often utilized a general innovation diffusion


(Rogers, 1995) frame of reference to analyze and assess the stage of e-Gov diffusion within a single country and its correlates (e.g., Ke & Wei, 2004). A second stream of research has focused on cross-country analysis of e-Gov diffusion and its relationship to a large number of underlying factors. The objective of this stream of research has been to uncover basic “drivers” of e-Gov adoption (e.g., West, 2005; Moon, Welch, & Wong, 2005; Singh, Das, & Joseph, 2007; Katchanovski & La Porte, 2009). The results are promising and they point to insights on adoption factors including broadband availability and economic development, among others. These research streams acknowledge the divide, i.e., though countries have embraced digital government some are failing to take advantage of it beyond the simple adoption stage (West, 2007). However, most researchers puzzle over the behavior and rarely theorize beyond pointing to the presence of bewildering array of factors that are purported to be behind the divide. Shaping e-Government: Importance of National Governance Institutions Since its inception, e-Gov has been employed to improve both the internal operations of government and also service delivery to citizens and businesses. The adoption of these electronically-enabled improvements is ultimately tied to notions of effective governance (Ciborra, 2005). Governance is defined as the transparency and accountability "traditions and institutions by which authority in a country is exercised" (Kaufmann, Kraay, & ZoidoLobatón, 1999). That is, better governance is associated with enhanced transparency and accountability in selecting, monitoring, and replacing governments. The improved governance is also related to the national capacity to successfully formulate and enforce sound market policies, as well as the respect of the state, citizens and businesses for these institutional mechanisms which govern social, political and economic exchange (Keohane & Nye, 2000). More specifically, the focal institutions of governance are “the humanly devised constraints that structure human interaction. They are made up of formal constraints (e.g.,


rules, laws, constitutions), informal constraints (e.g., norms of behavior, conventions, selfimposed codes of conduct), and their enforcement characteristics. Together they define the incentive structure of societies” (North, 1994, p. 360). This notion of governance institutions has risen to the top of the policy and research agenda in the 1990s and 2000s within the international development community (Kaufman et al., 1999; Campos & Nugent, 1999; Ahrens & Meurers, 2002). In particular, the recent challenges of implementing sustainable reforms in developing and transition countries have proved insurmountable and are largely attributed to weak or non-existent “rules of the game” systems—i.e., quintessential institutions of national governance (Rodrik, 2003). The manifest rationales and justifications for undertaking e-Gov are often tied to improvements in the governance environments, especially accountability and transparency (Dunleavy, Margetts, Bastow, & Tinkler, 2006). However, we recognize that, the diffusion of e-Gov is also expected to be shaped in the first place, at least in part, by the existing national governance institutional climate (Kamarck & Nye, 2002). To be sure, the extant research has linked the adoption of e-Gov systems to a variety of information and communication technologies (ICT) factors including Internet use, web site characteristics, types of services, and penetration (e.g., West, 2005). However, considerations to do with influence of the national governance institutions may be more fundamental. That is, they provide the appropriate incentives and rules (Wilson, 2004) within which the focal e-Gov programs and projects are likely to be chosen, designed and implemented. This link between pre-existing institutions of governance and e-Gov diffusion may appear obvious, however, it has rarely been empirically analyzed in a theory-driven manner. Building up this theoretical scaffolding will be the starting point for the framework suggested next.


Mechanism of Influence on e-Government: Role of National Governance Institutions Indeed, if national governance institutions do shape e-Gov adoption as is posited above, then what can the expected mechanism of this influence be? Wilson (2004) has proposed a framework for analyzing the influence of governance institutions at the national level on ICT and Internet policy making. This framework includes the following elements: the government, the private sector, and the non-governmental organizations (NGOs). These three sectors are posited to collectively have a significant hand in formation and execution of national Internet/ICT decisions—albeit the degree of influence is subject to specific constellations of institutional forces in these sectors within a specific country context. According to Wilson, it is to a large degree, the governance norms and practices of these sectors that tend to shape key actor participation and in turn influences the processes and outcomes of ICT and Internet diffusion at the national level. Wilson trains his analytical lens on the national governance institutions which are of great interest to this paper. His goal is to analyze the commensurate institution-based microinteractions. Thus, he adopts a qualitative approach to empirically analyze the latter. In that context, his focus is on the key individual as well as organizational actors who appear to have made a difference in specific decisions to shape the ICT and Internet policy making and implementation. He chooses three countries (i.e., Brazil, China and Ghana) to illustrate key aspects of his framework and how specific actions of focal individuals and organizations were critical to key outcomes. For example, he shows how specific changes in the telecommunication regulations of Brazil to facilitate and lower the cost of Internet diffusion were spearheaded by a group of individuals whose social network and material interests happened to coincide. For us, his framework can serve as a point of departure for the following five reasons. First, the similarities between ICT/Internet and e-Gov both technologically and institutionally are far greater than the potential differences. Thus, it makes theoretical sense to presume that


Wilson’s skeletal framework (the sectors approach) is a good base to start with in analyzing e-Gov diffusion using a governance institutions lens. Second, he convincingly argues for a theoretical framework which attaches enormous significance to the national governance institutional realm—a phenomena that may have been largely under-theorized by the e-Gov diffusion researchers so far. That is, according to Wilson, fundamentally it is these institutions that shape the decisions and outcomes of the ICT and Internet diffusion in the focal countries. Third, his framework is parsimonious, consisting of the abovementioned sectors, and thus very manageable. This simplicity is a major plus in the on-going search for potentially bewildering array of factors that influence diffusion of e-Gov (e.g., Moon et al., 2005; Boyer-Wright & Kotterman, 2008). Fourth, he makes a convincing empirical case via a rich analysis of the data on three countries that indeed, the institutions of national governance make a difference to ICT and Internet diffusion. Finally, his choice of qualitative method is both a boon and an opening for others to extend his research. The case study method used by Wilson is a boon because it provides rich details and an in-depth perspective on the institutional influences. However, precisely because of its qualitative limitations, it offers an opportunity to expand it to a large number of countries, albeit with significant adaptation of the theoretical framework to fit the latter type of analysis. This is the task of the next section. e-Government Diffusion: A Preliminary Model Incorporating the Role of Institutions The objective of this section is to propose a preliminary framework that helps us explore the potential role of national governance institutions in shaping the diffusion of eGov systems across countries. In particular, we are interested in the influence of the institutions above and beyond the traditionally advanced explanations for the e-Gov divide. With this objective in mind, we start with the economic development and technology infrastructure maturity categories which we refer to as the Control Model. We then add the elements from the above sectors (government, private and NGO) highlighting what the


mechanisms of institutional shaping of e-Gov systems diffusion are expected to be. This model proposes indicators of the underlying institutions to do with each of these sectors in a manner that can be more or less representative of the national governance institutional climate. We summarize the model via a set of six (6) hypotheses that reflect the shaping of the e-Gov diffusion within a country by variables that represent the focal national governance institutions. The Control Model—National Economic Development and Technology Infrastructure Maturity: Gross Domestic Product and Internet Penetration. Our starting point is the traditional economic growth argument. That is, we want to explore the role of traditional variables, namely, the influence of the levels economic development and technology infrastructure maturity in shaping e-Gov diffusion. In other words, in a more economically developed society by definition there is a greater tendency to employ systems to deliver eGov services. Similarly, the greater the ICT infrastructure maturity, the greater the penetration of e-Gov is expected to be. Indeed, the work of Norris (2001) has substantiated that, higher levels of economic development are correlated with more sophisticated ICT and Internet environments worldwide. The propositions by Singh et al. (2007) and West (2007) go a step further. They posit that, as countries develop, ICT becomes more embedded within the organizational structures especially in the decision making processes. Furthermore, these structures are expected to be positively associated in the shaping of ICT and Internet decision making. Consistent with prior research we represent the level of economic development as Gross Domestic Product and Technology Infrastructure Maturity as Internet Penetration (Norris, 2001). Thus, we summarize the above traditional reasoning in the form of following two hypotheses: H1: The higher the level of the Gross Domestic Product the greater the level of e-Gov diffusion


H2: The higher the level of the Internet Penetration the greater the level of e-Gov diffusion Government Governance Institutions: Democratic Practices. A premise of most e-Gov practice and research has been that e-Gov is about greater efficiency and accountability in the public sector (Fountain, 2007). Especially enhancing accountability by making government information and services more responsive to the needs of citizens and businesses has dominated the e-Gov project agendas (Dunleavy et al., 2006). Indeed, Dunleavy et al. (2006) in their assessment of e-Gov initiatives underscore the significance of accountability: “Underpinning everything that governments do is a dynamic of political accountability, that is both an obligation to explain major decisions convincingly before they are undertaken and a duty to answer in public for actual performance” (italics added, p. 85). In practice, accountability is exercised and experienced as a matter of degree. More specifically, this can be expected to be largely a reflection of the institutional climate of democratic governance. That is, we expect governments that exhibit greater degree of democratic orientation to be more favorably disposed to advancing a higher level of accountability and also a more advanced e-Gov development agenda, all else being equal. In our adaptation of the public sector national governance institutions, we posit that government accountability can be represented as the degree to which democratic practices are prevalent within a national environment. We further suggest that these practices influence the diffusion of e-Gov positively. Subsequently, we summarize our reasoning as the following hypothesis: H3: The more prevalent the national Democratic Practices the greater the level of eGov diffusion. Private Sector Governance Institutions: Transparency of Corporate Governance and Corruption Perception. Based on the theoretical interests of this paper, we link the private sector national governance institutions to e-Gov development as follows: (a) the transparency


of private sector corporate governance; and (b) the transparency of exchange between public and private sectors. First, the traditional governance literature often provides two separate interpretations of institutions: a private one via Williamson’s (1999) sense of corporate governance as rules regulating private orderings; and another one via public institutions of governance (Wilson, 1989) which are frequently limited to ethos of professional and independent public sector management. However, consistent with Ahrens and Meurers (2002), our formulation of national governance institutions integrates these private and public notions holistically within a unified governance institutional environment—whereby they tend to reinforce each other and have a symbiotic relationship (e.g., Evans & Rauch, 1999). Stated differently, the norms and practices of private corporate governance and public sector governance, namely, their institutions can be thought of as mutually interdependent social structures. That is, as market governance institutions develop and mature they tend to be emulated in the public sector and vice verse. As such, more mature market governance regimes are often associated with a more enlightened public sector governance structure affording more transparency to government operations. As a whole, we expect that the deployment of tools and methods to enhance transparency of public sector to be shaped by greater maturity in the private sector corporate governance structures. Thus, we further hypothesize that, e-Gov is more likely to be adopted and diffused, when there is a perception of greater transparency in private sector corporate governance institutions. Second, we focus on the transparency of private-public sector interactions, or more precisely its opposite, corrupt practices. That is, we are interested in the openness of the dealings between public and private sectors. This general approach postulates that the existing transparency ethos within the public sector facilitates the move toward electronic government. More specifically, within the context of national governance institutional climate, we adopt the perspective that transparency refers to the manner and openness of


strategic interactions “between policymakers, private businesses, and intermediate organizations” as a whole (Ahrens, 2006, p. 8). Thus, we posit that, the transparency of dealings between public and private sectors, i.e., (inverse of) corruption perception, can represent a dimension of the private sector governance institutions within the focal national environment. Combining these two elements, we suggest that the greater the transparency of corporate governance and the lower the corruption perception, the more the positive influence on the development and assimilation of e-Gov systems. Subsequently, we summarize our reasoning as the following two hypotheses: H4: The higher the perception of Transparency of Corporate Governance the greater level of e-Gov diffusion. H5: The lower the Corruption Perception the greater level of e-Gov diffusion. NGO Sector Governance Institutions: Free Press. Generally speaking, a more democratic polity goes hand in hand with a freer press as a key governance institution (Islam, 2006). That is, traditionally we expect to observe freer flow of information in more open societies. For example, Martin and Feldman (1998) have argued that that a free press is essential to the dissemination of information. Also, there is a growing body of evidence that relates the national governance institution of a free press as an underpinning of the “watchdog” role onto the public sector workings and a check against the abuse of governmental authority (e.g., Besley, Burgess, & Prat, 2002; Djankov, McLiesh, Nenova, & Shleifer, 2003). That is, governments have strong incentives for maintaining secrecy regarding their operations, transactions, and decision-making. As a result, some societies have attempted to constrain this tendency in behavior by limiting the government’s ability to curb those who might bring about greater openness. That is, there are institutions and practices which protect


either free speech or a free press or both via freedom of access to public information (Stiglitz, 2008). Thus, the role of the media in enhancing transparency and openness of public records can be regarded as a fundamental “rules-of-the-game” and is often considered a key national governance institution. However, for such institutions to work effectively the focal artifactual means of access to government information play a large part in guaranteeing access to it—be they hand-copying, fax, photocopy, digital reproduction, etc. Indeed, one of the touted ideals of e-Gov has been to enhance accessibility and availability of this governmental information via online digital means. Based on this formulation, we hypothesize that, the presence and maturity of a free press is associated with greater levels of development of e-Gov. Subsequently, we summarize our reasoning as the following hypothesis: H6: The greater the degree of Press Freedom the greater the level of e-Gov diffusion Having described the hypothesized relationships between national governance institutional climate and e-Gov development and assimilation, they are summarized in Figure 1 graphically. --------------------------------Figure 1 goes about here --------------------------------METHODOLOGY Data Sources We start with our dependent variable, i.e., e-Gov Development. We drew on the United Nations (UN) Global E-Government Report 2005 (United Nations, 2005a, 2005b) to derive this dependent variable. This data source has been used extensively in earlier e-Gov studies (e.g., Siau & Long, 2006; Srivastava & Teo, 2008). The UN Global E-Government Readiness Survey 2005 provides an assessment of how the governments that are members of UN, use the ICTs to provide access to government functions. This assessment constructs the


patterns of diffusion of e-Gov and also includes items that the government may not taken advantage of. The data set contains quantitative measures rather than perceptual measures. These are counts of features and services as provided through the government websites. This is a positive characteristic of the underlying data since it relies less on the perception of the eGov websites design. Proceeding to our independent variables we relied on the following sources. First, we used the measure "democracy of a government" to capture Democratic Practices which is derived from the POLITY IV project dataset (Marshall & Jaggers, 2007). The main purpose of the POLITY IV project has been to establish quantitative measures that characterize democratic features among different governments in the world for political scientists and governance researchers. The “democracy of a government” codes the general authority traits that characterize a polity. It is widely used in studying regime authority related factors (e.g., Treier & Jackman, 2008). Second, we utilized the World Bank’s Ethics Index (2004) of Transparency of Corporate Governance and the Corruption Perceptions index from Transparency International2. The World Bank has been compiling an index of Transparency of Corporate Governance in its governance database. The Transparency International also constructs and maintains a composite index which measures the degree to which corruption is perceived to exist in a country in the public-private interactions and transactions. This index is drawn from corruption-related information and surveys and then reviewed by an advisory committee drawn from experts on corruption, econometrics and statistics. Both indices have been used by economists in a variety of national governance assessments (e.g., Ahrens & Meurers, 2002; Campos & Nugent, 1999) and by e-Gov researchers (e.g., Srivastava & Teo, 2008). Third, we utilized data from Reporters Without Borders (2006) to obtain measures for media Press Freedom. Reporters Without Borders is an association, which examines the


level of Press Freedom, to protect the rights of reporters or journalists around the world. This data is used widely within governance research for a variety purposes including foreign direct investment oversight and anti-corruption campaigns (e.g., Li, 2005; Islam, 2008). Fourth, for the level of Economic Development we obtained data from the World Bank World Development database indicators on Gross Domestic Product (GDP) per capita purchasing parity. The data from this database are widely used in economic development research (Campos & Nugent, 1999). For Technology Infrastructure Maturity we used Internet Penetration data from INSEAD’s Global Information Technology Report (World Economic Forum, 2006). This measure is among most widely used data to capture the information technology infrastructure maturity within a country (e.g., West, 2007). Operational Definition of Variables Here we present the operational definition of select variables (e-Gov Development, Democratic Practices, and Internet Penetration) that require further explanation—the rest of variables have a one-to-one correspondence with the construct being measured in the secondary data set. e-Gov Development. This variable was used to measure the digital government development in our exploratory model. It is a measure of e-Gov sophistication which signifies the level of e-Gov penetration in year 2005 based on a five stage model of egovernment readiness according to the development and sophistication of the digital government functions. Similar operationalization has been employed in prior research on eGov (e.g., Siau & Long, 2006). The measure is similar (though not identical) to the Layne and Lee (2001) model of e-Gov stages. The UN evaluation of e-Gov websites was conducted during July-August 2005. In particular, it contains five stages which are described as follows: 

Emerging—The government provides a website containing a basic web page linking to other ministries or departments.




Enhanced—The government provides sources of current and archived information on public agencies. Users can perform basic search of pages and e-Gov website with a help feature. However, it only permits unidirectional interaction.



Interactive—The government provides a website which allows downloadable forms, some online services and contains multimedia information. Contact information is provided for government representatives and made available through different online means. There are frequent updates on sites.



Transactional—The government website allows bi-directional interaction. Public services are payable through some form of electronic transaction involving the use of credit bank or debit card. Links to financial institutions are also made available on the website.



Networked—A networked e-Gov website allows the integration of government to government (G2G), government to citizen (G2C), and citizen to government (C2G) interactions. In addition to two-way interactions, it allows citizens to participate in policy making and give feedback through online means.



Democratic Practices. The Democratic Practices variable is based on the measures from POLITY IV database (Marshall & Waggers, 2007). Specifically we employed the POLITY2 index. This index is meant to signify political regime types from a scale of -10 (fully autocratic) to +10 (fully democratic). The index combines data on five factors that capture the institutional differences between democracies and autocracies: (1) the competitiveness of the process for selecting country’s chief executive; (2) the openness of this process; (3) the extent to which institutional constraints limit a chief executive’s decision-making authority; (4) the competitiveness of political


participation within a country; and (5) the degree to which binding rules govern political participation within it. 

Internet Penetration. As a proxy for the level of technology infrastructure maturity in the country we adopted a readily available data for a large number of countries, i.e., Internet Penetration. This is measured using the number of Internet users per 1000 people (World Economic Forum, 2006).

Method of Analysis The analysis was largely driven by data availability from separate data sources. As a result, there were some missing values for some countries. We decided the best way to reduce the impact of this and not introduce inconsistencies was to remove the cases (countries) with missing values for any one variable. As a result, we ended up with 60 complete country observations in the entire data set. All the independent variables were lagged by at least 1 year. The descriptive statistics for the key variables are shown in Table 1. --------------------------------Table 1 goes about here --------------------------------Pairwise correlations as shown in Table 1 indicates that Gross Domestic Product and Internet Penetration were highly correlated (r = 0.74) with the Level of e-Gov Development. Further analysis indicates that the variance inflation factors were 7.6 and 6.2 for Gross Domestic Product and Internet Penetration respectively. This suggests that multi-collinearity was not a major issue and will not affect the interpretation of coefficients (Maddala, 1992). In order to test the Control and the Proposed Models, we employed hierarchical regression method using STATA 9.0 software which helped us perform the hypotheses testing. In order to ascertain the robustness of the results, the assumptions of regression were


examined. Towards this end, variable distributions were inspected to find out if they did or did not conform to normality requirements. As a result, if they did not, they were logtransformed. Our analysis proceeds in two steps. We first test the economic factors model consisting of the Gross Domestic Product and Internet Penetration levels. In the second step, and in accordance with hierarchical regression tenets, the national institutions of governance variables are introduced to assess their impact over and above those of the control model. The hierarchical regression approach thus allows a comparative evaluation of two models each including a set of theoretically related variables. If the second model achieves a significantly higher R2, then it is surmised that the inclusion of latter variables have a unique and significant impact over and above the variables in the first model. FINDINGS Results We tested hypotheses H1 through H6 using the entire data set in two phases (two models). Details of the results are presented in Table 2. Below, we present an overview of the results both for the Control Model and the Proposed Model. Control Model (H1 and H2 alone). The results of Control Model support traditional reasoning and confirm prior studies by generating an R2 of 0.7—the second column of Table 2. That is, Gross Domestic Product is related to Level of e-Gov Development and thus H1 of the control model was supported (β=0.050, p