Conceptualizing the impact of corruption in national institutions and national stakeholder service systems on e-government maturity

Highlights

• Corruption in a country hinders its e-government development and growth.

• Corruption in institutions and stakeholder systems can hamper e-government maturity.

• Theoretical explanations on how corruption affects e-government maturity is offered.

• A holistic conceptual framework linking corruption with e-government is proposed.

Abstract

Research linking corruption and e-government maturity has mainly focused on the impact of e-government on corruption, and a vast majority of studies among them indicate that e-government can effectively lower the level of corruption in a country. As opposed to this well-developed stream of research, we explore and contribute to another potential but under-developed stream of research: the impact of corruption on e-government maturity. Drawing on the institutional perspective to construe corruption, we argue that corruption in three basic national institutions (political, legal, and media) and two national stakeholder service systems (business and citizen systems) in a country can hinder its e-government maturity. Specifically, we propose a holistic framework that conceptualizes the negative influence of corruption in national institutions and national stakeholder service systems on e-government maturity by drawing on five key theoretical perspectives—agency theory, control theory, theory of X-inefficiency, rent-seeking theory, and trust in institutions—grounded in corruption and information systems project management literature. The proposed conceptual framework is expected to (1) guide future empirical research on “corruption–e-government” phenomenon by providing rich theoretical explanations; and (2) offer a comprehensive strategy for practitioners and policymakers dealing with e-government projects and initiatives.

Introduction

The notion of corruption, defined as the misuse of entrusted power for personal or private gains (United Nations Development Programme, 2008), has received increasing attention among e-government researchers in recent years. While linking corruption and e-government, at least two streams of research are evident: (1) studies looking into the impact of e-government on corruption; and (2) studies acknowledging the influence of corruption on e-government. Though the first stream of research contains mixed arguments having one group of studies considering e-government as an effective instrument to alleviate corruption in a country (Cho & Choi, 2004; Srivastava, Teo, & Devaraj, 2016; Wong & Welch, 2004) and another group questioning its validity in reality (Kim, Kim, & Lee, 2009; Wescott, 2001), this stream has been widely discussed in the literature and is reasonably well developed. On contrary, the second stream is found to be less developed owing to the lack of theoretical reasoning and guidance, and contains only a handful of anecdotes and descriptive studies (except a recent study by Aladwani (2016)). To fill this void, the current study strives to contribute to this stream of research by conceptualizing the mechanisms through which corruption in a country affects its desired level of e-government maturity, defined as the extent to which a government in a country has established an online presence (Krishnan, Teo, & Lim, 2013; Singh, Das, & Joseph, 2007).

Corruption is regarded as one of the largest societal concerns that puts citizens in a continuous misery (Kock & Gaskins, 2014; Senior, 2004). A report by Transparency International (2016) highlights that over two-thirds of the 176 nations surveyed scored less than 50, on a scale of 0 (highly corrupt) to 100 (very clean), indicating a serious corruption problem. Corruption in a country can cause internal market inefficiencies by creating an environment of uncertainty (Dawes, 2010), and can reduce investment incentives and curb the flow of foreign direct investment (FDI), thereby inhibiting its economic growth and prosperity (Habib & Zurawicki, 2002; Mauro, 1995; Seligson, 2002). In a similar vein, drawing on Aladwani (2016) arguments, corruption can be thought to affect e-government projects and initiatives in a country by manipulating its Information Technology (IT) market, complicating regulations, and inducing inefficiency in public workforce. However, theoretical support leading to such predictions is largely absent in the literature. In other words, while some studies mention that corruption in a country may have a pivotal role in influencing e-government growth and maturity (Heeks, 1999; Kim, 2014; Singh et al., 2007), it is evident that the mechanisms explaining this phenomenon are not theoretically driven. This essentially creates an incentive for this study to relate corruption with e-government in a way that is different from the conventional undertakings.

As our objective is to account for variation in the level of corruption across countries, in line with Srivastava et al. (2016), we believe that an institutional perspective would serve the purpose of developing a more comprehensive understanding. Accordingly, we draw on the well-established conception that considers corruption in three basic national institutions, namely, political, legal, and media institutions, and two national stakeholder service systems, namely, business and citizen service systems. Further, as corruption is a prevalent issue across countries and affects many government activities such as public welfare (Lambsdorff, 2002), there is a possibility that it can also impact e-government maturity in a country. For instance, a study by Aladwani (2016) argues that corruption could be a source of e-government failure in developing countries. Yoon and Chae (2009), based on the experts’ opinion in the Delphi survey, mention about the possibility of impact of corruption on the effectiveness of national e-strategy. Acknowledging the potential adverse impact of corruption on e-government, the key research question (RQ) that this study aims to address is as follows:

RQ: How does corruption in national institutions and national stakeholder service systems of a country affect its e-government maturity?

In an effort to answer the above question, we propose a conceptual framework offering rich theoretical explanations on “corruption–e-government” phenomenon. Specifically, the proposed framework conceptualizes the negative influence of corruption in national institutions and national stakeholder service systems on e-government maturity by drawing on five key theoretical perspectives: (1) agency theory; (2) control theory; (3) theory of X-inefficiency; (4) rent-seeking theory; and (5) trust in institutions. It is worthy to note that these theories complement each other in explaining the linkages between corruption and e-government maturity. That is, we first draw on the agency theory (also known as the principal-agent-client model), which is substantially established in the literature on corruption and information systems (IS) (Srivastava et al., 2016). Second, as the agency problem is often identified with the lack of control by the principal (Lambsdorff, 2001), and as control mechanisms are required for IS projects (Tiwana & Keil, 2010) such as e-government initiatives and its growth and maturity, we draw on the control theory perspective for relevant explanations. Next, as these two theories work under the assumption of benevolent principal, they may not be applicable for contested principal with non-benevolent goals (Lambsdorff, 2001; 2002); accordingly, we draw on two other theories namely, the theory of X-inefficiency and the rent-seeking theory. Taken together, these four theories capture the perspectives of government and public officials while explaining the influence of corruption on e-government maturity. And lastly, to include the perspective of citizens that is highly relevant to e-government and its success (Teo, Srivastava, & Jiang, 2008), we draw on the fifth theoretical perspective, trust in institutions, which again is well developed in the literature on corruption and e-government. In sum, the proposed conceptual framework is holistic in nature incorporating different theoretical perspectives, and such a theoretical understanding is important as it would make researchers, practitioners, and policymakers vigilant of the aspects of corruption that is yet not controlled and that could hinder the progress of e-government.

It is worthy to note that Aladwani (2016) also proposed a conceptual framework depicting certain mechanisms through which corruption in a country can influence its e-government projects and initiatives. Specifically, his study described how the external corruption environment (cultural, economic, political, and judicial) could affect the internal environment (moral compass and governance standards) of the e-government project, leading to its failure. Adding to the understanding provided by Aladwani (2016), our proposed conceptual framework emphasizes various manifestations of corruption in major institutions of a country, and how they can affect e-government maturity. We believe that construing corruption by drawing on the institutional perspective builds a more systematic understanding of the “corruption—e-government” phenomenon, and we consider that such a theoretical development is necessary to enrich our insights, forming the basis for further scientific investigations in future. Having said these, it is noteworthy that such holistic approaches involving multiple theories are not uncommon in IS literature. For instance, a study by Ojha, Palvia, and Gupta (2008) proposed a conceptual model of e-government anti-corruption impact by drawing on three key theoretical perspectives namely, economics of crime, agency theory, and transaction cost economics. Another study by Phang, Kankanhalli, and Ang (2008) employed a multi-theoretic approach involving five theoretical perspectives—structuration theory, organizational learning, culture, politics, and institutional theory—to investigate the phenomenon of organizational learning in e-government projects.

The rest of the paper is structured as follows. Section 2 reviews relevant literature on e-government maturity and corruption, and establishes the basic linkages between them using the aforementioned five theoretical perspectives. Section 3 offers rich theoretical explanations on how corruption in three basic national institutions (political, legal, and media) and two national stakeholder service systems (business and citizen systems) negatively affects e-government maturity. For each of them, we derive propositions and depict them in the conceptual framework (see, Fig. 2). In Section 4, we discuss the theoretical and practical implications of our holistic conceptual framework, and highlight the future research directions. The final section provides concluding remarks with a restatement of the value of our work.