Welcome to E-Estonia, the tiny nation that’s leading Europe in digital innovation

 in The Conversation: “Big Brother does “just want to help” – in Estonia, at least. In this small nation of 1.3 million people, citizens have overcome fears of an Orwellian dystopia with ubiquitous surveillance to become a highly digital society.

The government took nearly all its services online in 2003 with the e-Estonia State Portal. The country’s innovative digital governance was not the result of a carefully crafted master plan, it was a pragmatic and cost-efficient response to budget limitations.

It helped that citizens trusted their politicians after Estonia regained independence in 1991. And, in turn, politicians trusted the country’s engineers, who had no commitment to legacy hardware or software systems, to build something new.

This proved to be a winning formula that can now benefit all the European countries.

The once-only principle

With its digital governance, Estonia introduced the “once-only” principle, mandating that the state is not allowed to ask citizens for the same information twice.

In other words, if you give your address or a family member’s name to the census bureau, the health insurance provider will not later ask you for it again. No department of any government agency can make citizens repeat information already stored in their database or that of some other agency….The once-only principle has been such a big success that, based on Estonia’s common-sense innovation, the EU enacted a digital Once Only Principle and Initiative early this year. It ensures that “citizens and businesses supply certain standard information only once, because public administration offices take action to internally share this data, so that no additional burden falls on citizens and businesses.”…

‘Twice-mandatory’ principle

Governments should always be brainstorming, asking themselves, for example, if one government agency needs this information, who else might benefit from it? And beyond need, what insights could we glean from this data?

Financier Vernon Hill introduced an interesting “One to Say YES, Two to Say NO” rule when founding Metro Bank UK: “It takes only one person to make a yes decision, but it requires two people to say no. If you’re going to turn away business, you need a second check for that.”

Imagine how simple and powerful a policy it would be if governments learnt this lesson. What if every bit of information collected from citizens or businesses had to be used for two purposes (at least!) or by two agencies in order to merit requesting it?

The Estonian Tax and Customs Board is, perhaps unexpectedly given the reputation of tax offices, an example of the potential for such a paradigm shift. In 2014, it launched a new strategy to address tax fraud, requiring every business transaction of over €1,000 to be declared monthly by the entities involved.

To minimise the administrative burden of this, the government introduced an application-programming interface that allows information to be automatically exchanged between the company’s accounting software and the state’s tax system.

Though there was some negative push back in the media at the beginning by companies and former president Toomas Hendrik Ilves even vetoed the initial version of the act, the system was a spectacular success. Estonia surpassed its original estimate of €30 million in reduced tax fraud by more than twice.

Latvia, Spain, Belgium, Romania, Hungary and several others have taken a similar path for controlling and detecting tax fraud. But analysing this data beyond fraud is where the real potential is hidden….(More).”