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, Governance & Security, Policy, Politics & Government

Mediated Trust: From the open Internet to artificial intelligence

by Terry Flew 16/12/2024

Trust is a critical driver for AI adoption. If people do not trust AI, they will be reluctant to use it, writes Professor Terry Flew.

by Terry Flew 16/12/2024

Abstract illustration of AI with silhouette head full of eyes, symbolizing observation and technology.

There has been a resurgence of interest in recent years in setting policies for digital platforms and the challenges of platform power. It has been estimated that there are over 120 public inquiries taking place across different nation‐states, as well as by supranational entities such as the United Nations and the European Union. Similarly, the current surge in enquiries, reviews and policy statements concerning artificial intelligence (AI), such as the Biden Administration’s Executive Order on Safe Secure and Trustworthy Artificial Intelligence in the U.S., the U.K.’s AI Safety Summit and the EU AI Act, also speak to this desire to put regulatory frameworks in place to steer the future development of digital technologies. The push for greater nation‐state regulation of digital platforms has occurred in the context of the platformisation of the internet, and the concentration of control over key functions of the digital economy by a relatively small number of global technology corporations. This concentration of power and control is clearly apparent with artificial intelligence, where what the U.K. House of Commons Science, Innovation and Technology Committee referred to as the access to data challenge, with ‘the most powerful AI needs very large datasets, which are held by few organisations’, is paramount (House of Commons Science, Innovation and Technology Committee, 2023, p. 18). As a result, the extent to which the political of platform governance appears as a direct contest between corporate and governmental power is clearer than was the case in the early years of the open Internet. In my Policy & Internet paper, “Mediated Trust, the Internet and Artificial Intelligence: Ideas, interests, institutions and futures”, I argue that trust is a central part of communication, and communication is central to trust. Moreover, the nature of that connection has intensified in an age of universal and pervasive digital media networks. The push towards nation‐state regulation of digital platforms has come from the intersection of two trust vectors: the…

Articles from Policy & Internet, Governance & Security, Policy, Politics & Government

The Power of Digital Participation – How Online Tools Affect and Are Affected by Policy Conflicts

by Ilana Schröder 16/12/2024

Can e-participation improve policy processes, or do existing conflicts hinder its potential?

by Ilana Schröder 16/12/2024

Vibrant abstract pattern of illuminated red LED lights forming a dynamic design.

Involving local communities in political decisions is essential for transparent governance. This involvement is especially important in controversial issues, such as the siting of infrastructure, where a balance must be struck between the collective benefits of projects and the personal costs for nearby residents. However, despite efforts to engage communities, participation processes often lead to protests, loss of trust, and project blockades. This is where e-participation tools can play a significant role. As digital transformation reshapes governance, an increasing number of online platforms are being integrated into traditional participation processes. These platforms aim to make participation more inclusive and transparent by allowing individuals to engage regardless of their location or the time and by fostering a space for clear knowledge exchange. Nonetheless, how effective are communities in accessing these tools, particularly when conflicts are already intense? Can e-participation improve policy processes, or do existing conflicts hinder its potential? Our recent article published in Policy & Internet, titled “Digital Citizen Participation in Policy Conflict and Concord: Evaluation of a Web-Based Planning Tool for Railroad Infrastructure” by Ilana Schröder and Nils C. Bandelow, explores these questions. The research examines the performance of e-participation in both low- and high-conflict settings by focusing on a web-based tool that allows citizens to propose alternative railroad routes. Study participants were asked to use the online tool in a hypothetical scenario characterized as either conflictual or consensual. They then assessed the tool’s ability to promote inclusion, transparency, conflict resolution, and efficiency in the decision-making process. Here are the key findings: E-Participation Can Enhance Transparency and Mutual Understanding: Participants in both low- and high-conflict scenarios indicated that digital participation tools help enhance transparency in decision-making processes. When used effectively, these tools clarify planning criteria, include local knowledge, and improve mutual understanding among stakeholders. Therefore, e-participation tools can help reduce conflict escalation and facilitate creative solutions to complex issues. Digital Tools Aren’t a One-Size-Fits-All Solution: While digital platforms have…

Articles from Policy & Internet, Democracy, Governance & Security, Policy, Politics & Government

A plot on democracy: has the role of e-petitioning changed with the mainstreaming of conspiracy theories?

by Ben Lyall 16/12/2024

The emergence of conspiracy theories within petitions is paradoxical: why target these beliefs at the government using an official government channel?

by Ben Lyall 16/12/2024

Silhouette of a hand placing a vote into a ballot box, symbolizing democracy.

In an era of increased digitisation, e-petitions have become a popular form of political engagement. However, as the parameters of truth, democracy, false news, and conspiracy are challenged, so too is the original role of parliamentary petitioning. In our article, published in Policy & Internet, my co-author and I argue that the amplification of conspiracy theories shifts the goalposts for e-petitioning in terms of function. Specifically, unlike traditional petitions, they are not primarily aimed at producing policy changes. Instead, they function as social objects that achieve various community outcomes while adhering to petition rules. Signatures on these petitions, although lacking automatic results, signal popularity. Thus, the content of petitions can serve as a platform for airing shared grievances on topics such as immigration, economics, and health—and can even experiment with new forms of communication, such as emojis. As it is known, petitions alone rarely lead to policy changes, though they often reflect public sentiment and can significantly impact protest campaigns or social movements. E-petitions exist in various formats, with private platforms like Change.org being among the most well-known. In Australia, there are different types of e-petitioning, and it’s important to distinguish between them. The first type is private e-petitions, which serve as gathering spaces for individuals united by a common cause. The second type is parliamentary petitions, which can be initiated at either the state or federal level. Parliamentary petitioning is a process entrenched in parliamentary conventions. The petitions committee enforces rules that enable Australian residents and citizens to express concerns to Parliament and has some authority to compel action from government representatives. While rare, there are notable examples of e-petitions that have led to meaningful change. For instance, the Senate inquiry into media diversity, initiated by former Prime Minister Kevin Rudd in 2020, started with e-petitioning. Similarly, changes to teacher education requirements, which received numerous petitions in 2021, are currently being implemented. Our recent article for Policy & Internet…

Articles from Policy & Internet, Democracy, Methods, Politics & Government

Do online consultations make citizens more satisfied with local democracy?

by Professor Tobias Escher 15/04/2024

We find that giving citizens an opportunity to have a say in political decisions influences their opinions about local politics—but not all of them are satisfied.

by Professor Tobias Escher 15/04/2024

In political discussions, the legitimacy crisis of democracy is a common theme. Even though citizens value the concept of democracy, they are often unhappy with how it is implemented. This issue also extends to the local level, where political decisions directly affect citizens. It is worth noting that whenever a local conflict arises, citizens (and policymakers themselves) often call for more participation as a means to increase the legitimacy of such decisions. As a result, municipalities frequently conduct public consultations and increasingly use the Internet to enable online participation. But what role can these online consultations play in improving legitimacy? In a recent study published by Policy & Internet, Bastian Rottinghaus and I investigated how participation in local consultation processes affects attitudes toward local politics. To achieve this, we examined participation procedures in which three German municipalities consulted their citizens on local cycling infrastructure. In each case, citizens submitted, commented on, and evaluated proposals through an online platform. After the end of these consultations, we surveyed nearly 600 citizens who had participated in these procedures. Here are some of our key findings: • The participation processes influenced the attitudes of those who participated in these consultations. • For many participants, the positive effect that was hoped for did indeed occur: they were more positive about local institutions (mayor, administration) and local politics as a whole. The decisive factor for the assessment was whether one expected local politics to take the citizens’ proposals seriously and act upon them. In other words, the result of the process was more important to attitudes than the process itself. • It is worth noting that this also applies to those with negative views of local politics. However, previous experience with local politics also played a role: those who already had a higher level of satisfaction and trust in the municipality became more positive by participating. • At the same time, participation may reduce satisfaction, especially…

Politics & Government

Australia’s News Media Bargaining Code: What next?

by Associate Professor Diana Bossio 22/01/2024

A year after the introduction of the Code, we found the legislation was not always successful in meeting its publicly stated purposes; supporting public interest journalism.

by Associate Professor Diana Bossio 22/01/2024

The Australian recently government found itself the unlikely harbinger of a global trajectory toward more interventionist models of platform regulation with its enactment of the Australian News Media and Digital Platforms Mandatory Bargaining Code (NMBC) in 2021. The NMBC aims to support public interest journalism by ostensibly compelling digital platforms to bargain with news media organisations for remuneration for news content posted online. The Australian Federal Treasury completed the first review of the NMBC in 2022 and hailed the legislation a success. In a lot of ways, it was. There were 34 deals made amounting to more than AU$200 million across the media sector, which represents about 61 per cent of the market being covered by at least one deal. But is the Code fair or sustainable? More importantly, is the legislation replicable? I was part of a research team that examined policy documents and interviewed news media executives about their experience of negotiating with the platforms, with some findings published recently in Policy & Internet. Our research resonates with global responses to the ‘regulatory turn’ in platform governance, showing both the issues with the more interventionist models of regulation, and the lengths platforms will go to avoid them. A year after the introduction of the Code, we found the legislation was not always successful in meeting its publicly stated purposes; supporting public interest journalism. We showed that several issues remain unaddressed in the Australian legislation, including: lack of designation forcing platforms to continue to comply with the legislation, registration criteria for news outlets prioritizing legacy media organisations over equally worthy independent news providers, and the most importantly, the unintended extension of platform power into defining which media organisations constitute public interest journalism and should therefore benefit from the legislation. Commercial confidence provisions in the legislation means news organizations and platforms are not required to report how much money they received, how they invested it, nor whether that investment aligned with the NMBC’s aim of supporting…

Politics & Government, Tools

Follow to be followed: Analyzing The centrality of Ministries of Foreign Affairs in Twitter Networks

by Dr Ilan Manor 12/01/2024 Leave a Comment

Through Twitter, diplomats can comment on world events in near-real time, narrate their state’s actions and justify state policies.

by Dr Ilan Manor 12/01/2024 Leave a Comment

Although they are often described as antiquated and change resistant institutions, Ministries of Foreign Affairs (MFAs) have proven to be innovative, utilizing new digital technologies towards the obtainment of traditional diplomatic goals. Since 2008, MFAs have launched digital Embassies in virtual worlds, migrated to social networking sites such as Facebook and Twitter (now X), created digital diplomacy departments tasked with training diplomats, employed big data and sentiment analysis to inform the policy formulation process and launched dedicated smartphone applications. In a recent study, published in Policy & Internet, Elad Segev and I sought to analyze Twitter networks of MFAs. Previous studies suggest that although MFAs operate numerous social media profiles, they are most active on Twitter. Through Twitter, diplomats can comment on world events in near-real time, narrate their state’s actions and justify state policies. Moreover, Twitter enables diplomats to interact with elite audiences including journalists, policy makers and other diplomatic institutions. Indeed, studies suggest that diplomatic institutions follow one another on Twitter and that diplomats view their peers’ Twitter profile as an important source of information. For instance, MFAs may follow peers to identify policy shifts, diplomatic priorities and state’s positions on events shaping the world. Few studies to date have mapped MFA networks on Twitter or tried to examine which factors contribute to the popularity, or centrality of MFAs in a Twitter network of their peers. It is possible that Twitter networks of MFAs mirror offline networks of diplomacy. In such an instance, one might expect that world powers would attract the most peers on Twitter. Yet it is also possible that Twitter networks differ from offline networks and that MFAs from peripheral states may attract more peers than world powers. In our study, we strove to both map MFA networks on Twitter and identify factors that contribute to the network centrality of an MFA among a network of its peers. To do so, we analyzed the Twitter network…

Politics & Government

Internet Companies in China: Where Private Interests and Government Intervention Clash

by Dr Anson Au 09/01/2024

China is perhaps one of the most digitalized societies worldwide. Part of this sweep has been abetted by the rise of large Internet companies that offer key services for everyday social and economic life in the general population.

by Dr Anson Au 09/01/2024

Digitalization has swept through the global economy worldwide. China is perhaps one of the most digitalized societies worldwide. Part of this sweep has been abetted by the rise of large Internet companies that offer key services for everyday social and economic life in the general population. Such services touch upon social networking sites to enable digital connectivity over geographical distances and time, payment infrastructure to facilitate digital transactions and money transfers, and new platforms to expand video game options and video communication (such as short videos). The prominence of these services has been lucrative for Internet companies. But their success has also made them a ripe target for regulation. My latest work examined the latest policies that have emerged out of China in response to the growth of Internet companies. Internet companies in China have leveraged their rich balance sheets to acquire or purchase minority stakes in smaller companies deemed conducive to growth. The most salient of these purchases include Tencent’s acquisition of a minority stake in California-based Snapchat and Alibaba’s stake in Chinese streaming platform MangoTV. The two cases capture the growing lengths to which Internet companies would search for new investment targets and engines of growth. Companies were not only looking to acquire competitors, they were also looking to acquire firms beyond the Internet sector and even national borders. This volley of acquisition activity was one of the major legislative battlegrounds for China’s policy crackdown. New policies urged stringent reporting guidelines that covered Internet firm activities across national borders, curbed internal anti-competitive practices, and institutionalized new channels of oversight through a collaboration of government ministries. If balance sheets were the only thing companies needed to acquire without limit, we would see private interests totalize social and economic life, resulting in greater inequality and the recession of government powers (and public interests). These concerns aboutthe growing influence of Internet companies are a story that is not restricted to China.…

Politics & Government

The Definition Conundrum: What is Online Political Advertising and How do we Regulate it?

by Dr Junyan Zhu 07/12/2023

With political advertising increasingly taking place online, the question of regulation is becoming inescapable. In their latest paper, published in Policy&Internet, Junyan Zhu explores the definition of online political advertising and identities key questions regulators must confront when devising effective frameworks.

by Dr Junyan Zhu 07/12/2023

The rapid surge of online political advertising in recent years has introduced a new dimension to election campaigns. Concerns have arisen regarding the potential consequences of this practice on democracy, including data privacy, voter manipulation, misinformation, and accountability issues. But what exactly is an online political advert? This kind of question is hard to answer, and indeed, reports show that 37 per cent of respondents in the 2021 Eurobarometer Survey couldn’t easily determine whether online content was a political advertisement or not. As of now, only a few platform companies, including Facebook and Google, have defined in their own terms what constitutes this form of content. To address the conceptual challenges faced by policymakers, in our latest paper, we conducted interviews with 19 experts from regulatory bodies, professional advertising associations, and civil society organisations engaged in discussions surrounding online political advertising in both the United Kingdom and the European Union. We delved into the policymakers’ perspectives, seeking to distil their understanding of what constitutes an “advert”, “online” platforms, and “political” content. Instead of crafting new definitions, we pinpointed these alternative factors and illustrated them through a sequence of decision trees. Specifically, our work led us to pose three questions that regulators need to confront: What does it mean for content to be considered an “advert”? When we inquired about the criteria for identifying an advert, a consistent key point that emerged was payment. The central idea revolves around whether payment is involved in content distribution or creation, and it also depends on the timing of the payment. Some interviewees also acknowledged the increasingly blurred boundaries between paid and unpaid content. There are organic ways of spreading material that don’t involve payment, such as an unpaid tweet. These differences matter as they suggest alternative criteria for determining what should or should not count as an advert. What does it mean for an advert to be “online”? This turned out to be the most challenging question…

Politics & Government

Five reasons ‘technological solutions’ are a distraction from the Irish border problem

by Helen Margetts 21/02/2019

Discussing the focus on ‘technological solutions’ in the context of the Irish border debate.

by Helen Margetts 21/02/2019

Technology is increasingly touted as an alternative to the Irish backstop, especially in light of the government’s difficulty to find a Brexit strategy that can command a majority in the House of Commons. As academics, we have been following the debate around the role of technology in monitoring the border with interest, but also scepticism and frustration. Technology can foster government innovation in countless ways and digital technologies, in particular, have the potential to transform the way in which the government makes policy and designs public services. Yet, in the context of the Irish border debate, the focus on ‘technological solutions’ is becoming a red herring and distracts from the political choices ahead. Technology cannot solve the Irish border problem and it is time to face the facts. 1: Technology cannot ensure a ‘frictionless border’ Any legal or regulatory restrictions on the movement of goods or people between the UK and the Republic of Ireland post-Brexit will make border-related friction inevitable. Setting the restrictions is a matter of political agreements. Technology can help enforce the legal or regulatory restrictions, but it cannot prevent the introduction of friction compared to the status quo. For example, technology may speed up documentation, processing, and inspections, but it cannot eliminate the need for these procedures, whose existence will mean new burdens on those undergoing them. 2: There will be a need for new infrastructure at or near the border Technology may make it possible for some checks to be carried out away from the border. For example, machine learning algorithms can assist in identifying suspicious vehicles and police forces can stop and inspect them away from the border. Regardless of where the relevant inspections are carried out, however, there will be a need for new infrastructure at or near the border, such as camera systems that record the identity of the vehicles crossing the frontier. The amount of new infrastructure needed will depend on…