Digital Capacity, Rule Of Law, And Regulatory Quality As Determinants Of Government Effectiveness: A Pooled OLS Interaction Model For EU Member States

Abstract

Government effectiveness, as a measurable institutional outcome, has been extensively studied, assessed and discussed in the academic literature. Building on the theories of moderation and institutional complementarity, this study argues that digital capacity, the rule of law, and regulatory quality are significant determinants of government effectiveness. The analysis draws on data for four internationally recognised composite indices used to assess the state of public administration. This study proposes a pooled OLS interaction model to examine whether the effects on government effectiveness depend on the levels of digital capacity, the rule of law and regulatory quality, and on the interactions among them. The aim of this article is: 1. To outline the theoretical basis for the application of an institutional interaction model to the study of governance effectiveness; 2. To construct and apply such a model using observed cross-national data for EU countries and Bulgaria. In this regard, the authors set themselves the following tasks: 1. To review a methodological framework for analyzing administrative structures; 2. To examine the influence of digital maturity, the quality of regulations, the rule of law and their multiplier effect on the effectiveness of public administration management in EU countries; 3. To draw conclusions about the institutional interaction of the three factors on the effectiveness of public administration in Bulgaria. The findings reveal significant positive effects of digital capacity, the rule of law and regulatory quality on government effectiveness. The analysis of internationally comparable composite indices with longitudinal coverage enables both cross-national and temporal comparisons, yielding policy-relevant insights for strategies aimed at enhancing public administration effectiveness. Comparable panel data for the DES, RoL and RQ coefficients for all 27 EU Member States for the period 2022–2024 were used as independent variables determining the levels of the dependent variable Government Effectiveness (GE).