Articles from Policy & Internet, Economics, Policy, Politics & Government

How Can Digitalisation Close the VAT Gap? Insights for Policymakers

by Hana Zídková 16/12/2024

By embracing digital transformation, policymakers can create more efficient, transparent, and fair tax systems that benefit both governments and taxpayers.

by Hana Zídková 16/12/2024

Close-up of a calculator and pen on a bar graph, representing finance and accounting.

The digitalisation of tax administration is a hot topic in the EU, with significant implications for VAT collection. Our recent study explores how the level of e-government, measured by the E-Government Development Index (EGDI), impacts VAT evasion, specifically the VAT gap, across EU Member States from 2003 to 2020. The findings reveal that higher levels of digitalisation in tax administration significantly reduce the VAT gap, highlighting the importance of digital transformation in public services. Why is this research important to policymakers? Here are three key elements that resonate with their needs: Enhanced Efficiency and Transparency: Digitalisation improves the efficiency of tax collection by reducing information asymmetry between taxpayers and tax authorities. This exchange leads to better compliance and less tax evasion. Policymakers can leverage these insights to advocate for more robust digital infrastructure in tax administration, ensuring that tax systems are transparent and efficient. Tailored Policy Measures: The study shows that the impact of digitalisation varies between original and new EU Member States. For instance, while digitalisation and corruption perception significantly affect the VAT gap in the original Member States, new Member States are more influenced by household consumption and standard VAT rates. This differentiation suggests that policymakers should tailor their digitalisation strategies to the specific needs and contexts of their countries Combatting Tax Evasion: The research underscores the role of digital tools in combatting VAT fraud, including carousel fraud. By implementing measures such as electronic invoicing and real-time transaction reporting, policymakers can significantly reduce opportunities for tax evasion. These tools not only enhance revenue collection but also build public trust in the tax system. The findings suggest that investing in digitalisation is not just a technological upgrade but a strategic move to enhance tax compliance and reduce evasion. Policymakers should focus on: Promoting digital literacy among taxpayers to ensure they can effectively use e-government services. Implementing comprehensive digital reporting systems to track transactions and detect fraud Customising digitalisation efforts…

Articles from Policy & Internet, Economics, Governance & Security

Blockchain for better e-governance? Understanding the latest developments in the industry

by Dr Maxat Kassen 06/05/2024

If the potential of blockchain-driven management is fully realised, what areas in the public, economic, social, political, technological, and business sectors would benefit most?

by Dr Maxat Kassen 06/05/2024

The rising popularity of crypto-currencies globally has dramatically increased attention to blockchain technology’s capabilities in advancing peer-to-peer transactions and interactions. Namely, blockchain can promote more agile, cost-effective, and intrinsically data-driven project management practices and decision-making in e-governance. These capabilities are translatable not only to the financial and technological sectors but can also promote more efficient public and corporate sector systems. However, there remains a lack of understanding among practitioners regarding how exactly this digital technology could be fully realised removed from the context of crypto-finances. Furthermore, questions remain in terms of what public and corporate values related to government, business actors and decision-makers could harness in various sectors of the economy as part of the implementation process (e.g. public, corporate, social, political, technological or regulatory ones). An article I recently published in Policy & Internet, titled “Prospects of Blockchain Governance”, addresses recent developments of blockchain-driven governance in various sectors of the economy. It answers the following questions: How exactly does blockchain technology work? How could one illustrate schematically the fundamental principles of its work in a practical way that is easily comprehensible for practitioners and project managers in both corporate and public sectors of the economy? What are the critical features of blockchain-driven project management? Why are they essential for public and corporate decision-makers? What benefits could the blockchain concept bring to different sectors of the economy? If the potential of blockchain-driven management is fully realised, what areas in the public, economic, social, political, technological, and business sectors would benefit most? Relying on the analysis of rich empirical data provided by experts in the industry across the globe (i.e. those directly engaged in promoting various related decentralised project management tools for a wide range of public and corporate digital ecosystems), the paper provides insider perspectives on the latest blockchain-driven public and project management advancements. Furthermore, it describes the essence of decentralised data governance, how it is intended to be realised by…

Economics

A distributed resilience among darknet markets?

by Martin Dittus 09/11/2017

The actions by law enforcement were deliberately structured to seed distrust in illicit trading platforms. Did this effort succeed?

by Martin Dittus 09/11/2017

You may have seen the news earlier this year that two large darknet marketplaces, Alphabay and Hansa, have been taken down by international law enforcement. Particularly interesting about these takedowns is that they were deliberately structured to seed distrust among market participants: after Alphabay closed many traders migrated to Hansa, not aware that it had already covertly been taken over by the police. As trading continued on this smaller platform, the Dutch police and their peers kept track of account logins, private messages, and incoming orders. Two weeks later they also closed Hansa, and revealed their successful data collection efforts to the public. Many arrests followed. The message to illicit traders: you can try your best to stay anonymous, but eventually we will catch you. By coincidence, our small research team of Joss Wright, Mark Graham, and I had set out earlier in the year to investigate the economic geography of darknet markets. We had started our data collection a few weeks earlier, and the events took us by surprise: it doesn’t happen every day that a primary information source gets shut down by the police. While we had anticipated that some markets would close during our investigations, it all happened rather quickly. On the other hand, this also gave us a rare opportunity to observe what happens after such a takedown. The actions by law enforcement were deliberately structured to seed distrust in illicit trading platforms. Did this effort succeed? Let’s have a look at the data. The chart above shows weekly trading volumes on darknet markets for the period from May to July 2017. The black line shows the overall trading volume across all markets we observed at the time. Initially, Alphabay (in blue) represented a significant share of this overall trade, while Hansa (in yellow) was comparably small. When Alphabay was closed in week 27, overall sales dropped: many traders lost their primary market. The following week,…

Economics, Governance & Security, Mapping, Social Data Science

Mapping Fentanyl Trades on the Darknet

by Mark Graham 16/10/2017

The US accounts for almost 40% of global darknet trade, with Canada and Australia at 15% and 12%, respectively.

by Mark Graham 16/10/2017

My colleagues Joss Wright, Martin Dittus and I have been scraping the world’s largest darknet marketplaces over the last few months, as part of our darknet mapping project. The data we collected allow us to explore a wide range of trading activities, including the trade in the synthetic opioid Fentanyl, one of the drugs blamed for the rapid rise in overdose deaths and widespread opioid addiction in the US. The map shows the global distribution of the Fentanyl trade on the darknet. The US accounts for almost 40% of global darknet trade, with Canada and Australia at 15% and 12%, respectively. The UK and Germany are the largest sellers in Europe with 9% and 5% of sales. While China is often mentioned as an important source of the drug, it accounts for only 4% of darknet sales. However, this does not necessarily mean that China is not the ultimate site of production. Many of the sellers in places like the US, Canada, and Western Europe are likely intermediaries rather than producers themselves. In the next few months, we’ll be sharing more visualisations of the economic geographies of products on the darknet. In the meantime you can find out more about our work by Exploring the Darknet in Five Easy Questions. Follow the project here: https://www.oii.ox.ac.uk/research/projects/economic-geog-darknet/ Twitter: @OiiDarknet

Economics, Interviews

Introducing Martin Dittus, Data Scientist and Darknet Researcher

by David Sutcliffe 13/09/2017

Martin Dittus is a Data Scientist at the Oxford Internet Institute. The stringent ethics process governing his research means he currently can’t even contact anyone on the marketplace.

by David Sutcliffe 13/09/2017

We’re sitting upstairs, hunched over a computer, and Martin is showing me the darknet. I guess I have as good an idea as most people what the darknet is, i.e. not much. We’re looking at the page of someone claiming to be in the UK who’s selling “locally produced” cannabis, and Martin is wondering if there’s any way of telling if it’s blood cannabis. How would you go about determining this? Much of what is sold on these markets is illegal, and can lead to prosecution, as with any market for illegal products. But we’re not buying anything, just looking. The stringent ethics process governing his research means he currently can’t even contact anyone on the marketplace. [Read more: Exploring the Darknet in Five Easy Questions] Martin Dittus is a Data Scientist at the Oxford Internet Institute, and I’ve come to his office to find out about the OII’s investigation (undertaken with Mark Graham and Joss Wright) of the economic geographies of illegal economic activities in anonymous Internet marketplaces, or more simply: “mapping the darknet.” Basically: what’s being sold, by whom, from where, to where, and what’s the overall value? Between 2011 and 2013, the Silk Road marketplace attracted hundreds of millions of dollars worth of bitcoin-based transactions before being closed down by the FBI, but relatively little is known about the geography of this global trade. The darknet throws up lots of interesting research topics: around traffic in illegal wildlife products, the effect of healthcare policies on demand for illegal prescription drugs, whether law enforcement has (or can have) much of an impact, questions around the geographies of trade (e.g. sites of production and consumption), and the economics of these marketplaces—as well as the ethics of researching all this. OII researchers tend to come from very different disciplinary backgrounds, and I’m always curious about what brings people here. A computer scientist by training, Martin first worked as a software developer…

Economics

Exploring the Darknet in Five Easy Questions

by David Sutcliffe 12/09/2017

We caught up with Martin Dittus to find out some basics about darknet markets, and why they’re interesting to study.

by David Sutcliffe 12/09/2017

Darknet marketplaces are typically set up to engage in the trading of illicit products and services, and are considered criminal in most jurisdictions. Image: Dennis Yip (Flickr).

Many people are probably aware of something called “the darknet” (also sometimes called the “dark web”) or might have a vague notion of what it might be. However, many probably don’t know much about the global flows of drugs, weapons, and other illicit items traded on darknet marketplaces like AlphaBay and Hansa, the two large marketplaces that were recently shut down by the FBI, DEA and Dutch National Police. We caught up with Martin Dittus, a data scientist working with Mark Graham and Joss Wright on the OII’s darknet mapping project, to find out some basics about darknet markets, and why they’re interesting to study. Firstly: what actually is the darknet? Martin: The darknet is simply a part of the Internet you access using anonymising technology, so you can visit websites without being easily observed. This allows you to provide (or access) services online that can’t be tracked easily by your ISP or law enforcement. There are actually many ways in which you can visit the darknet, and it’s not technically hard. The most popular anonymising technology is probably Tor. The Tor browser functions just like Chrome, Internet Explorer or Firefox: it’s a piece of software you install on your machine to then open websites. It might be a bit of a challenge to know which websites you can then visit (you won’t find them on Google), but there are darknet search engines, and community platforms that talk about it. The term ‘darknet’ is perhaps a little bit misleading, in that a lot of these activities are not as hidden as you might think: it’s inconvenient to access, and it’s anonymising, but it’s not completely hidden from the public eye. Once you’re using Tor, you can see any information displayed on darknet websites, just like you would on the regular internet. It is also important to state that this anonymisation technology is entirely legal. I would personally even argue that such…

Economics, Governance & Security, Interviews

Digital platforms are governing systems—so it’s time we examined them in more detail

by David Sutcliffe 29/08/2017

It’s important that we take a multi-perspective view of the role of digital platforms in contemporary society.

by David Sutcliffe 29/08/2017

Digital platforms strongly determine the structure of local interactions with users; essentially representing a totalitarian form of control. Image: Bruno Cordioli (Flickr CC BY 2.0).

Digital platforms are not just software-based media, they are governing systems that control, interact, and accumulate. As surfaces on which social action takes place, digital platforms mediate—and to a considerable extent, dictate—economic relationships and social action. By automating market exchanges they solidify relationships into material infrastructure, lend a degree of immutability and traceability to engagements, and render what previously would have been informal exchanges into much more formalised rules. In his Policy & Internet article “Platform Logic: An Interdisciplinary Approach to the Platform-based Economy”, Jonas Andersson Schwarz argues that digital platforms enact a twofold logic of micro-level technocentric control and macro-level geopolitical domination, while supporting a range of generative outcomes between the two levels. Technology isn’t ‘neutral’, and what designers want may clash with what users want: so it’s important that we take a multi-perspective view of the role of digital platforms in contemporary society. For example, if we only consider the technical, we’ll notice modularity, compatibility, compliance, flexibility, mutual subsistence, and cross-subsidisation. By contrast, if we consider ownership and organisational control, we’ll observe issues of consolidation, privatisation, enclosure, financialisation and protectionism. When focusing on local interactions (e.g. with users), the digital nature of platforms is seen to strongly determine structure; essentially representing an absolute or totalitarian form of control. When we focus on geopolitical power arrangements in the “platform society”, patterns can be observed that are worryingly suggestive of market dominance, colonisation, and consolidation. Concerns have been expressed that these (overwhelmingly US-biased) platform giants are not only enacting hegemony, but are on a road to “usurpation through tech—a worry that these companies could grow so large and become so deeply entrenched in world economies that they could effectively make their own laws.” We caught up with Jonas to discuss his findings: Ed.: You say that there are lots of different ways of considering “platforms”: what (briefly) are some of these different approaches, and why should they be linked up…

Economics

Considering the Taylor Review: Ways Forward for the Gig Economy

by Vili Lehdonvirta 21/07/2017

The review assesses changes in labour markets and employment practices, and proposes policy solutions.

by Vili Lehdonvirta 21/07/2017

The Taylor Review of Modern Working Practices in the UK was published last week. The review assesses changes in labour markets and employment practices, and proposes policy solutions. One of the big themes in the report is the rise of platform-mediated gig work. I have been doing research on platform-mediated work for a few years now, and am currently leading a major European Research Council funded research project on the topic. This article is my hot take on some of the topics covered in the report. Overall the report takes a relatively upbeat view of the gig economy, but engages with its problematic points as well. A third way in employment classification In the U.S. policy debate around the gig economy, many have called for a ‘third category’ between protected employment and unprotected self-employment. The interesting thing is that in the UK such a category already exists. An employment tribunal decision last year determined that Uber drivers were not employees or contractors, but ‘workers’, enjoying some of the benefits of employment but not all. The review recommends making use this ‘worker’ category and renaming it ‘dependent contractor’. The review calls for greater emphasis on control over one’s work as a factor in determining whether someone is a ‘dependent contractor’ or genuinely self-employed. The question of control has featured prominently in recent research on gig economy platforms (see, for example: Rosenblat & Stark 2016, Graham et al. 2017). Uber promises freedom, but in practice uses a variety of nudges and constraints to manage workers quite closely. Platforms for digitally delivered work like graphic design don’t necessarily try to control the workers in the same way at all. So focusing on control can help distinguish between the employment status implications of different platforms, which can be quite different. Of course, the fact that someone is genuinely self-employed doesn’t necessarily mean that they are well off. Self-employed people are often relatively poor and…

Economics, Interviews, Politics & Government

Should citizens be allowed to vote on public budgets?

by David Sutcliffe 18/04/2017

Considered to be a successful example of empowered democratic governance, participatory budgeting has spread among many cities in Brazil.

by David Sutcliffe 18/04/2017

Image: a youth occupation of Belo Horizonte to present and discuss different forms of occupation of urban space, by upsilon (Flickr CC BY-SA).

There is a general understanding that public decision-making could generate greater legitimacy for political decisions, greater trust in government action and a stronger sense of representation. One way of listening to citizens’ demands and improving their trust in politics is the creation of online communication channels whereby issues, problems, demands, and suggestions can be addressed. One example, participatory budgeting, is the process by which ordinary citizens are given the opportunity to make decisions regarding a municipal budget, by suggesting, discussing, and nominating projects that can be carried out within it. Considered to be a successful example of empowered democratic governance, participatory budgeting has spread among many cities in Brazil, and after being recommended by the World Bank and UN-Habitat, also implemented in various cities worldwide. The Policy & Internet article “Do Citizens Trust Electronic Participatory Budgeting? Public Expression in Online Forums as an Evaluation Method in Belo Horizonte” by Samuel A. R. Barros and Rafael C. Sampaio examines the feelings, emotions, narratives, and perceptions of political effectiveness and political representation shared in these forums. They discuss how online messages and feelings expressed through these channels can be used to assess public policies, as well as examining some of the consequences of ignoring them. Recognised as one of the most successful e-democracy experiences in Brazil, Belo Horizonte’s electronic participatory budgeting platform was created in 2006 to allow citizens to deliberate and vote in online forums provided by the city hall. The initiative involved around 174,000 participants in 2006 and 124,000 in 2008. However, only 25,000 participants took part in the 2011 edition, indicating significant loss of confidence in the process. It is a useful case to assess the reasons for success and failure of e-participation initiatives. There is some consensus in the literature on participants’ need to feel that their contributions will be taken into consideration by those who promote initiatives and, ideally, that these contributions will have effects and practical…

Economics

Can universal basic income counter the ill-effects of the gig economy?

by admin 14/04/2017

Basic income is an interesting solution for the gig economy, because it addresses its problems from a new angle.

by admin 14/04/2017

Platforms like eBay, Uber, Airbnb, and Freelancer are thriving, growing the digital economy and disrupting existing business. The question is how to ensure that the transformations they entail have a positive impact on society. Here, universal basic income may have a role to play. Few social policy ideas are as hot today as universal basic income. Social scientists, technologists, and politicians from both ends of the political spectrum see it as a potential solution to the unemployment that automation and artificial intelligence are expected to create. It has also been floated as a potential solution to the rise of the gig economy, where work is centred around on-demand tasks and short-term projects as opposed to regular full-time employment. This is the kind of employment that platforms like Uber and Freelancer are based on. Automation and the gig economy are actually closely linked. Isolating and codifying a job task in such a way that it can be outsourced to a gig worker can be the first step towards automating that task. Once a task has been automated, gig workers are used to train and supervise the algorithm. Meanwhile, expert online contractors are hired to fine-tune the technology. More often than not, a finished artificial intelligence system is actually an ensemble of machines and human workers acting in concert. Basic income is an interesting solution for the gig economy, because it addresses its problems from a new angle. One of the most problematic aspects of the gig economy has to do with its negative job characteristics. Though gig work can provide autonomy and good earnings for some, it also involves uncertainty and insecurity, and for many can entail working antisocial hours for little pay. A sort of default policy response therefore tends to be to regulate gig work back into the mould of standard employment, consisting of things like guaranteed working hours and notice periods. Basic income takes a different angle. It…