50 International The EconomistSeptember 5th 2020
2 Where services did exist online, their
inadequacies became apparent. Digital un-
employment-insurance systems collapsed
under a wave of new claimants. At the end
of March the website of the inps, the Italian
social-security office, received 300,000 ap-
plications for welfare in a single day. It
crashed. Some of those who could access it
were shown other people’s data. The au-
thorities blamed not just the volume of ap-
plicants but also hackers trying to put in
fraudulent claims. Criminals were a pro-
blem in America, too. In the worst-affected
state, Washington, $550m-650m, or one
dollar in every eight, was paid out to fraud-
sters who took advantage of an outdated
system of identity verification (about
$300m was recovered).Purposely pointless paperwork
In America such problems were inevitable,
says Michele Evermore of the National Em-
ployment Law Project, a think-tank, be-
cause the country has invested very little in
modernising its unemployment-insur-
ance systems. Spending on administration
has fallen since 2001, even before account-
ing for inflation. Some states, including
Florida, deliberately designed their sys-
tems to be difficult to use to discourage
workers from applying. In August Ron De-
Santis, Florida’s Republican governor, ad-
mitted that the state’s system was designed
with lots of “pointless roadblocks”.
Yet elsewhere the pandemic has re-
vealed how effective digitising govern-
ment services can be. Governments have
for the most part been able to transfer mon-
ey into the accounts of hundreds of mil-
lions of people without queues at govern-
ment offices or banks. In Britain the
previously unloved Universal Credit sys-
tem, which distributes welfare benefits,
proved its worth when almost 1m people
signed up to it in two weeks without having
to go to a job centre. Britain has no national
identity card or citizenship register—a pro-
blem in keeping track of people. But a digi-
tal workaround, whereby people were able
to prove their identity by scanning the elec-
tromagnetic chip in their passports with a
mobile phone, seems to have been effec-
tive. Though people had to wait five weeks
for payments—a political decision—they
mostly got them.
Governments that have embraced the
idea of digitising their services—and in-
vested in them—have performed admira-
bly. In Estonia, a country where digital gov-
ernment is so advanced that it is possible to
vote online, all citizens have a digital id
linked to their bank account and the tax
system. That meant that working out
which Estonians were furloughed and get-
ting benefits to them was fairly straightfor-
ward. Taiwan, another digital pioneer,
adapted its health-insurance system to im-
plement an economic stimulus intendedto help face-to-face businesses, says Au-
drey Tang, Taiwan’s digital minister. After
paying at a restaurant, for example, citi-
zens can use their insurance card at an atm
to reclaim cash from the government.
Covid-19 will probably accelerate a shift
online. During the pandemic the governors
of New York and California legalised digital
marriages. When New Jersey’s leaders real-
ised the extent of the shutdown, they in-
vested in putting more services online,
says Beth Noveck, the state’s chief innova-
tion officer. Her office created a single gov-
ernment website through which residents
can find information on the coronavirus
and book tests for it, among other things.
Other states have followed suit. Her office
is also trying to find ways to streamline the
awkward process of verifying people’s
identities online in America, which like
Britain has no national idcards. In France
social-security paperwork, which previ-
ously had to be sent by post, can now be
submitted electronically.
Some think that a bonanza of digital in-
vestment may be coming. “Everyone now
can see that the digitisation that will take
place will be enormous and billions and
billions will be spent,” says Daniel Korski,
who runs Public, a venture-capital firm
that invests in the digitisation of public
services. He points to various government
itcontracts that are nearing renewal. Brit-
ain’s nhsis among the services most likely
to change. Harpreet Sood, a practising gp
who is also in charge of technology for the
nhs, says that before the pandemic 7% of
his consultations were done remotely.
During lockdown the figure jumped to
90%. Not everything can be diagnosed over
the phone, he says, but a lot can.
Not everything works well digitally. At
the height of the pandemic almost all fam-
ily-court hearings in Britain stopped ex-
cept for the most urgent cases, such as the
removal of children from abusive parents.
Those were put online, with judges expect-ed to make decisions based on evidence de-
livered over sometimes patchy internet
connections. But the backlog has forced
some people to deal with the problems out-
side the courtroom. Couples going through
contested divorces have not been able to
get judgments on their financial disputes,
so arbitration has thrived, says Samantha
Woodham, a British barrister who runs the
Divorce Surgery, which provides legal ad-
vice to spouses breaking up.
The pandemic has not just drawn atten-
tion to more efficient ways of operating; it
has also required governments to do new
things. Track-and-trace systems work only
if governments know who their citizens
are and can contact them reliably. Estonia’s
officials can do so easily; Britain’s and
America’s cannot. In China in order to
board public transport or enter their own
apartment buildings people have to show
qrcodes on their phones to verify that they
have not been to a virus hotspot recently.
In Britain and America the lack of id
cards means that different government re-
cords are isolated in different depart-
ments. Health-care records do not identify
where somebody works and vice versa. Lo-
cal administrations do not always have ac-
cess to central-government records. With
no simple way of connecting names and
addresses, Britain’s government has had to
rely on data from credit checks to verify
people’s identities before posting them co-
vid-19 tests. When its track-and-trace sys-
tem was being built, contact tracers were
not able to connect swiftly clusters of cases
linked to workplaces because local govern-
ment did not have the data. As a result
some local outbreaks were not spotted
quickly enough to stamp out the spread.
Tony Blair, a former prime minister, is
among those who have called for Britain to
invest in a citizenship register like the one
in Estonia. Such projects take time and
money but could prove a worthwhile in-
vestment. Sharing information can help
with more than stopping the virus. Better
data-sharing would allow governments to
improve even mundane services such as
rubbish collection or managing street
parking. Better digital identities would not
just help track patients—they would also
reduce the risk of digital fraud, one of the
few industries to have thrived under lock-
down. If Americans had digital identities
like Estonians, organising November’s
presidential election would be easier.
Such changes will not be cheap. And the
implications for privacy must be taken se-
riously. Implemented badly, new digital
systems could create new opportunities for
fraud, instead of making it more difficult. A
state that gathers more and more granular
information ought to be able to make better
policy—but it will also find it easier to
snoop on citizens. Not all governments can
be trusted with such powers. 7