From Bytes to Benefits: Evidence on Digital Transformation and Public Service Provision Efficiency in China

Although government digital transformation has become a central strategy for improving public service delivery, less is known about whether its benefits are distributed evenly across places with different digital conditions. Using China’s “Internet + Government Services” national pilot policy as a quasi-natural experiment and a panel of 285 prefecture-level cities from 2010 to 2022, this paper examines both the average and distributive effects of digital government on public service provision. The results show that government digital transformation significantly improves public service provision efficiency on average, but these gains are highly uneven across cities. The effect is significantly stronger in cities with better pre-existing digital foundations and markedly weaker in cities facing more severe digital constraints. Further quantile-based evidence indicates a clear Matthew effect: digitally leading cities gain the most, whereas digitally lagging cities benefit far less. Mechanism analysis shows that digital transformation improves public service provision through stronger interdepartmental coordination, lower service provision costs, and information exchange between government and citizens. These findings suggest that digital government can enhance public service provision while also reinforcing disparities in public service gains under unequal initial conditions.