North America is still stuck in the dark ages when it comes to filing taxes or even voting. Not so in Estonia, writes Rachel Cunliffe for CapX, where making government services available online is helping to bring down the cost of doing business.
By Rachel Cunliffe, July 2, 2015
One of my most vivid memories as a child was returning from school to find my mother kneeling on the living room floor, surrounded 360 degrees by stacks of paper. She would glance up as I came in, and try to extract herself from the paper flood, navigating her document towers to make her way to the door without stepping on anything. This happened in late October every year. My mother, a self-employed psychologist with her own business, was filing her taxes. This ordeal would last several days, during which time our household (and my mother’s general demeanour) would be chaotic, to say the least. Somehow she never quite had the right codes, the necessary reference numbers, the complete set of receipts and invoices.
If she had been in Estonia, the entire process would have taken 30 seconds.
Describing Estonia’s digital government makes it sound like a futuristic fantasy world. The list of bureaucratic tasks Estonians can complete online is seemingly endless: as well as completing tax returns, they can set up businesses, sign contracts, obtain prescriptions, manage pensions, interact with utilities companies, apply for visas and permits, and vote. The Prime Minister, Taavi Rõivas, can even approve government bills using his iPhone.
Before I get into how this all works and why it matters, let me say one thing about voting online. A few weeks ago, I was at a forum discussing government attitudes to Millennials (those born between the early 1980s and the early 2000s), and one point raised multiple times was that young people cannot expect their government to represent them if they do not vote. I pointed out that, in this country, voting practices are biased towards older people who do not regularly move house (and so only have to register once), and who can take time off work to physically visit a polling station. For young people, many of whom work unpredictable part-time hours in multiple locations, and who change addresses often as rents rise and job opportunities move, voting is much more logistically challenging than any of the handwringers lamenting the disengagement of this generation ever acknowledge. I suggested that, if it were possible to vote online, participation rates would skyrocket. I was laughed at from all sides of the table, and informed that the security risks of online voting are far too serious for that ever to be a possibility in this country.
Almost a third of votes in Estonia’s election in March were cast online. While there has been some controversy over the security of the e-voting system, Estonia has thought carefully about how to address these issues, and the fact that so many citizens choose the online option when they are free to go the polling station shows the confidence they have in the democratic process.
Online voting isn’t the only feature of the e-government that Estonians enjoy. Each citizen is assigned a unique ID number at birth, which they use for all official interactions, whether with government departments, or with private companies which are integrated into the e-government system. They also have mandatory ID cards – something which would cause contention here, but which allows Estonian citizens to be recognised across government departments, without needing to sign up individually. Estonians each have a ‘digital signature’, a unique cryptographic key which enables them to sign official contracts online. In January 2014, “between ID cards and mobile phones, more than a million Estonians have authenticated 230 million times and given 140 million legally binding signatures”.
It is the integration between different systems that makes filling in tax returns so easy. Information concerning contracts, work permits, income, banking, pensions, charity donations, education and healthcare (to name but a few examples) is all linked to a citzen’s ID number, meaning that, when they come to file their tax return, that information has already been included. All they need to do is check it is correct, and submit it – a process which takes 5 clicks.
This digital integration is not just useful from a user-perspective. Advocates of small government should be paying close attention to Estonia. In an interview last month, the Prime Minister pointed out that “with the register of social securities, we are now building a new information system which allows us to do the same things with far fewer people, around 20 per cent less civil servants.” According to Thomas Tamblyn in the Huffington Post, “The introduction of the digital identity alone saves the country two per cent of its annual GDP, and that’s before you take into account the streamlining of each individual government service.” And in terms of how much everything costs, Taavi Kotka, the undersecretary for information technology at Estonia’s economy, has said that “All maintenance cost, salaries, investments together are around 50-60 million euros ($56-67 million), honestly.” In comparison, the Obamacare website cost over $2 billion.
But for people in countries like Britain and the US, who are increasingly wary of government access to private information as new snooping scandals keep emerging, the extent of Estonia’s digital government must seem terrifying. So why are citizens in Estonia, a country ravaged by Soviet control, so comfortable with it?
The answer should be obvious to anyone who has ever logged into facebook, bought something off Amazon, booked an Uber, searched on Google, or used any internet service company. In the 21st century, we are happy to give away access to our photos, travel movements, consumer habits, and innermost thoughts to anyone who might be able to make our lives just a little more convenient.
The Estonian government is making the same bargain with citizens as facebook does with its users: sign up, and we will make the way you connect to everything around you so much easier. And unlike facebook users, Estonian citizens own their data. Sten Tamkivi at the Atlantic wrote last year about how this works in practice: “in the case of fully digital health records and prescriptions, people can granularly assign access rights to the general practitioners and specialized doctors of their choosing. And in scenarios where they can’t legally block the state from seeing their information, as with Estonian e-policemen using real-time terminals, they at least get a record of who accessed their data and when. If an honest citizen learns that an official has been snooping on them without a valid reason, the person can file an inquiry and get the official fired.”
When it comes to both internet consumerism and governments in most other countries, access to personal data is nowhere near as safe, nor is there much in the way substantial accountability. What punishment will the NSA face for the latest snooping scandal? What will happen to private data if Theresa May in the UK gets her way with the Snooper’s Charter, and who will hold her accountable? To look at Estonia and worry about 1984-esque scenarios is to miss the wider point that governments and corporations are already watching us. The question is what should we get in return?
If the answer to that question is an end to bureaucracy, more efficient and cost-effective governance, higher voting participation rates, and a way to end the Kafka-esque frustration endured when applying for approval of anything from driving licences to starting a business, that’s an attractive proposal. Phone bills, arguing with officials in the wrong department, wasted paper, endless waiting periods, and the feeling of being helplessly lost in an impenetrable system could become a thing of the past. If I’m happy to trade my personal data so my friends can see my latest holiday photos online, I’d be happy to do the same so my mother didn’t have to waste three days filing her tax returns.
Rachel Cunliffe is Deputy Editor of CapX.
MLI would not exist without the support of its donors. Please consider making a small contribution today.