Zeitlin (2014) find that the introduction of electronic machines to record sales transactions of firms improved tax compliance and revenue mobilization in Ethiopia and Rwanda, respectively. Yilmaz and Coolidge (2013) demonstrate that e-filing significantly reduced tax compliance costs for firms in South Africa, but not in Ukraine or Nepal. However, these studies are country specific or compare a few cases at best. Our paper is the first to systematically examine the effects of e-filing cross-nationally and shows that government investments in e-filing systems could substantially increase tax revenue and improve the business climate by encouraging and facilitating tax compliance.<sup>4</sup> Empirical studies of the impact of e-procurement are country-specific or limited to small samples of relatively homogenous cases. For example, Nepelski (2006), using data from several European countries, finds that e-procurement increases the amount of market transactions and improves supply chain management. Lewis-Faupel et al. (2014) find that e-procurement in India and Indonesia improved the quality of public infrastructure projects through the increase in competition among bidders. In this paper, we analyze the effects of e-procurement implementation on public procurement competitiveness for a large sample of low- and middle-income countries.

This paper is also related to the literature on the impact of ICT on corruption. Muralidharan et al. (2014) and Barnwal (2014) show that biometric registration, authentication, and payment systems significantly reduced corruption and inefficiencies in government workfare and fuel subsidy programs in India by automating tasks and improving monitoring. Banerjee et al. (2014), using the evidence from a large field experiment, conclude that e-government reduces fiscal leakages, but does not necessarily improve outcomes of public programs. This paper, by contrast, finds only weak evidence of a reduction in petty corruption attributable to e-government adoption.

The reminder of the paper is structured as follows. The next section describes the data sources and variables. Section 3 outlines the empirical strategy. Section 4 discusses the results and their implications and presents the robustness checks. And Section 5 concludes.

# **2. Data**

This paper relies on a number of data sets collected by the World Bank. Our primary variables of interest, e-filing and e-procurement adoption dates and system functionality, are taken from the _Global e- Government Systems Database (GeGSD)_ , which was prepared for the _World Development Report 2016: Digital Dividends._ Data were compiled by World Bank experts by visiting government websites and consulting World Bank project documents, national legislation and implementation reports, and validated by country economists and government officials.<sup>5</sup> These data cover 198 countries, comprising

> 4 Quantifying the effects of e-filing on tax revenue, however, is beyond the scope of this paper.

> 5 The _Global e-Government Systems Database_ was prepared by a World Bank team comprising Cem Dener, Sophiko Skhirtladze, and Irene H. Zhan for the _World Development Report 2016: Digital Dividends_ . It is updated - - annually in August. Data and summary statistics can be accessed at http://data.worldbank.org/data <u>catalog/pfm systems-eservices-dataset. A related dataset focused on digital identification can be found at http://data.worldbank.org/data-catalog/id4d-dataset.</u>

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