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Estonia’s e-government: a global model

In the early months of COVID, California’s unemployment insurance agency, the Employment Development Department (EDD), was completely overwhelmed. 

It faced 1.3 million unprocessed claims, and it couldn’t keep up.

The task force brought in to fix the quagmire found a reality that’s far too common for many governments around the world: the agency’s technology was old; the policies around unemployment—slowly accruing over 25 years into a byzantine web—were only decipherable by experts; the agency was understaffed; and there was a culture of risk avoidance. At the center of it all, there was a disconnect between the people who worked on the policies and the people who implemented them.

The solution that ultimately fixed the problem was a tech-enabled ID-verification system. It unraveled years of jerry-rigged systems and policies, replaced manual procedures, and streamlined the process by which people accessed unemployment benefits.

This crisis would likely not happen in Estonia, where a digital ID system makes processes like applying for unemployment benefits simple. Estonia has become a worldwide model for how federal, state, and municipal agencies can bring government services into the 21st century.

For this newsletter, we spoke to Toomas Hendrik Ilves, the former president of Estonia, who oversaw the rollout of the country’s digital ID system, about the roadmap and challenges facing governments seeking to simplify and modernize the relationship between a country’s services and its people.

// Estonia's e-ID system

Since the first digital ID cards were issued 24 years ago, Estonia has redefined the way its citizens interact with their government through an “e-state” anchored around a digital national identity.

• 98% of Estonian citizens have an e-ID, a digital ID card accessible through the web or a smartphone. It allows them to pay bills, vote online, sign contracts, shop, and access health information.
• Estonia is a cashless society with over 99% of financial transactions occurring digitally.
• Through the e-ID, 99% of public services are available online 24 hours a day.

In 2014, Estonia launched its e-Residency program, which allows global citizens to access Estonia’s digital services and participate in its digital economy regardless of their physical location or citizenship.

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Estonia estimates its digitized public services save over 1400 years of working time and 2% of GDP.

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// Decentralized data: the source of security

A digital system is more vulnerable to data breaches, so Estonia’s e-ID system is secured through blockchain technology, or a distributed public ledger. After a series of cyber-attacks in 2007, the country began developing its own distributed-ledger blockchain technology in 2008 called KSI—even before the Bitcoin whitepaper coined the term (at the time, Estonia called it “hash-linked time-stamping”).

• KSI enforces the integrity of Estonian government data and systems, enabling data privacy and security. Because data is distributed and cryptographically secured, it reduces the catastrophic effects of a cyberattack.
• Although individual data isn’t stored on the blockchain, it allows the government and its citizens to prove the accuracy of data and information.
• Instead of residing on centralized servers, citizen-specific and country-wide data is distributed across multiple computers and secured through blockchain technology that detects any discrepancies or corruptions in the data.

// Reinventing government service

“For most governments, we’re stuck in the 1990s when it comes to their public services,” Ilves said. “They just don’t work very well.” But when 99% of public services are available 24 hours a day, bureaucracy can become a parallel process instead of a slow-moving sequential one.

• Sequential process bureaucracy: For most countries around the world, bureaucracy becomes burdensome because it is a sequential, step-by-step process of paperwork moving through a system. Once it gets approved by one department, it has to go to the next, and so on.
• Parallel process bureaucracy: In Estonia, the digitization of government services allows for parallel processes. Once a child is born, Ilves explained, multiple parallel processes begin simultaneously. The hospital sends the newborn child’s name to the population registry and the registry issues an e-ID number. That ID number automatically initiates multiple steps: It instantly generates health insurance for the child and electronic medical records; it creates a tax account for the child to be eligible for tax deductions, and it provides a record of population growth so government services and funding can be adjusted based on changes in demographics.

The country estimates its digitized public services save over 1400 years of working time and 2% of GDP.

// The playbook for governments to go digital

Today, Estonia represents a new approach to connecting government services to citizens, and Ilves has been advising other nations on how to roll-out their own digital ID systems. Ilves recommends a four-step approach:

1. Secured Digital Identity: Start with a strong, secured digital identity rooted in a population registry and a distributed ledger. The ID is the core, atomic unit that anchors all other digital government services and allows for agencies to interoperate in parallel processes.
2. Solve People Problems: Solve problems and provide services that citizens like and use often, like filing taxes or accessing prescriptions (for countries with government-managed healthcare). In the US, “the most horrendous interaction between the citizens and the state,” he said. But it doesn’t have to be this way. By making interactions with the government that were once onerous simple and easy, the popularity of digital services will grow.
3. Make it Mandatory. If it’s not mandatory, then the uptake rate will only be 15%-25% of the population, Ilves said. If 85% of the population isn’t onboard, government agencies won’t have the incentive to make the investments in developing digital-first solutions.
4. Mobile First: Start with mobile from day one. If citizens can accomplish everything on their phone, Ilves believes you can increase adoption and improve security. Ukraine, for example, used Estonian architecture to create its digital state, digital ID, and build a mobile platform called Diia that connects Ukrainians to their government services.

Countries from Sweden to Singapore and India to Nigeria are rolling out digital identity systems, and as Ilves continues to prove that it’s possible, more will follow.

// The future of government tech

Whether it’s a crisis like what the EDD faced during COVID with unemployment benefits or it’s a government seeking to provide everyday services that are secure from cyberattacks and data breaches, Estonia represents not only a model for how coordinated, government-wide innovation can drive streamlined processes and reduced bureaucracy, but a new relationship between the state and its people that is secure, private, and human-centric. 

Project Liberty news

// Audrey Tang, Taiwan’s former Minister of Digital Affairs, to become Senior Fellow at Project Liberty Institute.

Audrey Tang, one of the world’s most respected civic technologists and Taiwan’s first-ever digital minister, will serve as a Senior Fellow at the Project Liberty Institute. Tang, who has received global recognition for her work as Taiwan’s inaugural Minister of Digital Affairs, will focus on the organization’s efforts to develop more ethical governance frameworks for digital platforms and new forms of digital civic infrastructure. “Audrey Tang was the master architect behind Taiwan's digital transformation and is an expert on how we can preserve democracy amid the spread of misinformation and distrust,” said Frank McCourt, founder of Project Liberty. Learn more here.

// WIRED article on Project Liberty's bid to acquire TikTok

An article in WIRED profiled Project Liberty founder, Frank McCourt, on his plan to transform the internet by buying TikTok and giving power to users to control their digital experience.

// New Project Liberty Insights Report

Project Liberty Institute released a new Insights Report with the finding that the majority of Americans are worried about made-up news in the 2024 Presidential election. An overwhelming majority (89%) of Americans describe false or made-up news as a problem in the election, with 57% saying it is “a big problem.” Read more here.

// Global Launch of Responsible Technology report

June 19th at 11am ET

Project Liberty Institute and Aspen Digital are hosting a global virtual launch of the "Responsible Technology" report. The report synthesizes insights from over 150 leaders across governments, businesses, civil society, academia, and international organizations spanning five continents. Register here.

Other notable headlines

// 🤖 An article in The Atlantic discussed how OpenAI is now facing one controversy after another, likening the company to Facebook in its new phase.

// 🛑 According to an article in MIT Technology Review, companies are running out of AI training data making the value of your posts skyrocket, and you can opt out of Meta's data mining.

//📱 In an interview with Noema, Jonathan Haidt described how social media has harmed children and is now destabilizing democracy, referring to this phenomenon as “The Anxious Generation.”

// 📘 An article in Vox examined why lying on the internet continues to succeed, profiling a new book on the "Invisible Rulers" manipulating online attention.

// 🌆 A Markup investigation revealed that Los Angeles has become the first U.S. city to outlaw digital discrimination after findings showed poor neighborhoods were overcharged for slow internet service.

// 🐦 An article in Rest of World detailed the rise and fall of Koo, India's once-thriving Twitter alternative, which went from rapid international growth to near closure in four years.

// 🚗 Ars Technica reported on the shutdown of a major seller of driver behavioral data, highlighting the fallout from public outcry over the sale of "hard braking event" data.

// 🚨 The New York Times reported that the Surgeon General has called for warning labels on social media platforms to alert users to potential mental health risks.

Partner news & opportunities

// Remembering Christophe Deloire: Champion of Press Freedom

We are deeply saddened by the passing of Christophe Deloire, a cherished community member and tireless advocate for press freedom. As secretary general of Reporters Without Borders, Christophe rescued journalists, promoted media pluralism, and tirelessly fought for a free press worldwide. His legacy of courage and dedication will continue to inspire us; we extend our heartfelt condolences to his family and friends.

// MIT Center for Constructive Communication is Hiring

MIT Center for Constructive Communication is looking for a Program Administrator to focus on the design, build, and implementation of the Real Talk@MIT program across campus and stakeholder categories (e.g., students/staff/ faculty, labs/centers/institutes, affiliate organizations, etc.) in collaboration with the Real Talk program lead. Apply if interested!

// Application for Betaworks Camp Extended

New Deadline: June 24

In response to a large number of late applications and requests for extensions, Betaworks Camp decided to reopen their application for Betaworks Camp and extend the deadline to June 24. You now have until then to apply to Betaworks Camp, which is set to begin August 5.

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