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The first building block of e-government is telling citizens apart. This sounds blatantly obvious, but alternating between referring to a person by his social security number, taxpayer number, and other identifiers doesn’t cut it. Estonia uses a simple, unique ID methodology across all systems, from paper passports to bank records to government offices and hospitals.
For these identified citizens to transact with each other, Estonia passed the Digital Signatures Act in 2000. The state standardized a national Public Key Infrastructure (PKI), which binds citizen identities to their cryptographic keys.To prevent this system from becoming obsolete in the future, the law did not lock in the technical nuances of digital signatures. In fact, implementation has been changing over time. Initially, Estonia put a microchip in the traditional ID cards issued to every citizen for identification and domestic travel inside the European Union. The chip carries two certificates: one for legal signatures and the other for authentication when using a website or service that recognizes the government's identification system (online banking, for example). Every person over 15 is required to have an ID card, and there are now over 1.2 million active cards. That’s close to 100-percent penetration of the population.
As mobile adoption in Estonia rapidly approached the current 144 percent (the third-highest in Europe), digital signatures adapted too. Instead of carrying a smartcard reader with their computer, Estonians can now get a Mobile ID-enabled SIM card from their telecommunications operator. Without installing any additional hardware or software, they can access secure systems and affix their signatures by simply typing PIN codes on their mobile phone.
As of this writing, between ID cards and mobile phones, more than a million Estonians have authenticated 230 million times and given 140 million legally binding signatures. Besides the now-daily usage of this technology for commercial contracts and bank transactions, the most high-profile use case has been elections. Since becoming the first country in the world to allow online voting nationwide in 2005, Estonia has used the system for both parliamentary and European Parliament elections. During parliamentary elections in 2011, online voting accounted for 24 percent of all votes. (Citizens voted from 105 countries in total; I submitted my vote from California.)
To accelerate innovation, the state tendered building and securing the digital signature-certificate systems to private parties, namely a consortium led by local banks and telecoms. And that's not where the public-private partnerships end: Public and private players can access the same data-exchange system (dubbed X-Road), enabling truly integrated e-services.
A prime example is the income-tax declarations Estonians “fill” out. Quote marks are appropriate here, because when an average Estonian opens the submission form once a year, it usually looks more like a review wizard: “next -> next -> next -> submit.” This is because data has been moving throughout the year. When employers report employment taxes every month, their data entries are linked to people’s tax records too. Charitable donations reported by non-profits are recorded as deductions for the giver in the same fashion. Tax deductions on mortgages are registered from data interchange with commercial banks. And so forth. Not only is the income-tax rate in the country a flat 21 percent, but Estonians get tax overpayments put back on their bank accounts (digitally transferred, of course) within two days of submitting their forms.
Estonia has by many macroeconomic and political standards become a “boring European state,” stable and predictable, if still racing to close the gap with Old Europe from its time behind the Iron Curtain. Still, Estonia is a start-up country—not just by life stage, but by mindset. And this is what United States, along with many other countries struggling to get the Internet, could learn from Estonia: the mindset. The willingness to get the key infrastructure right and continuously re-invent it.