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Home , Finland, Kersti Kaljulaid, Tarja Halonen

Digitalisation Beyond : A Case Study of and ’s Collaboration on Cross- Information and Communication Technology Development

By: Rebecca Curry ID number: 1744828 Adviser’s name: Dr. Rod Dacombe Department of study: Political Economy Programme of study: MA Public Policy Word count: 15,480

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Table of Contents

I. Introduction I.1. Research question and hypothesis…………………………………………………….7 I.2. Justification……………………………………………………………………………8 I.3. Structure……………………………………………………………………………….9 I.4. Terms………………………………………………………………………………….9

II. Methodology II.1. Data collection……………………………………………………………………....11 II.2. Analysis…………………………………………………………………………….12 II.3. Limitations………………………………………………………………………….13

III. Literature Review III.1. Overview of multinational e-government Collaboration………………………….15 III.2. E-government information sharing, integration and interoperability……………...17 III.3. Central debates……………………………………………………………………..18

IV. Theoretical Framework IV.1. Underpinnings of the framework………………………………………………….20 IV.1.1 Border theory…………………………………………………………….20 IV.1.2 Collaborative governance theory…………………………………………22 IV.1.3 Inter-organizational cooperation theory………………………………….24 IV.1.4 Integration and interoperability theory…………………………………...25 IV.1.5. Value network theory……………………………………………………26 IV.2. ‘Multinational e-government collaboration, information-sharing, and interoperability’ framework……………………………………………………...27

V. Case Study V.1. Case: Estonia and Finland’s cross-border collaboration on ICT development……..30 V.1.1 Cooperation……………………………………………………...30 V.1.2 Nordic Institute of Interoperability Solutions……………………………..33 V.2. Application of Framework………………………………………………………….35 V.2.1. Collaboration……………………………………………………………...35 V.2.2. Value Network……………………………………………………………44 V.2.3. Cross-border factors……………………………………….……………...48 V.2.4. Integration and Interoperability…………………………………………..49

VI. Conclusion VI.1. Contribution to the literature………………………………………………………55 VI.2. Key Findings……………………………………………………………………….55 VI.3. Implications……………………………………………………………………….57

VII. References……………………………………………………………………………….59

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VIII. Appendix………………………………………………………………………………...72

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List of Tables and Figures

Figure 1: ‘Theory of borderland studies’ framework (Brunet-Jailly, 2005: 645)…………21

Figure 2: ‘A model of collaborative governance’ (Ansell and Gash, 2008: 550)…………23

Figure 3: ‘Multinational e-government collaboration, information sharing, and interoperability’ framework (Navarrete et al, 2010: 7) ………………………...27

Figure 4: ‘Cooperation between Population Register Centre (Fi) and Information System Authority (EE)’ (NIIS, 2018a: 10)………………………………………………32

Figure 5: 2018 NIIS organisation chart (NIIS, 2018i) ……………………………………36

Figure 6: Ecosystem Value Map of the Nordic Institute for Interoperability Solutions (NIIS, 2018j)…………………………………………………………………….45

Figure 7: Factors that explain the emergence of multinational collaboration on ICT development and e-government between Estonia and Finland…………………56

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Abstract

The purpose of this dissertation is to examine the factors that led to the emergence of collaboration on ICT and e-government development between Estonia and Finland. I employ the ‘Multinational E-government Collaboration, Information Sharing and Interoperability’ framework to examine this new phenomenon of collaboration between countries to develop cross-border e-government solutions. I conclude that collaboration between Estonia and Finland was influenced by both technical and non-technical factors to include cross-border, value network, collaboration, and integration and interoperability.

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I. Introduction

The role of borders and governments requires closer inspection during a time of increased populist sentiments throughout areas of and the rest of the . The influx of asylum seekers and refugees to Europe in 2015 (, 2018a) during the , and the impending Brexit deadline, have sparked new debates over the ’s (EU) vision to operate as a single, borderless market. As migrants cross the Mediterranean in search of safety and better lives in Europe, the Austrian Chancellor has threatened to reinstate border checkpoints along their border with (Brandt and Reinert, 2018). At the same time, the ’s (UK) decisive referendum on membership with the EU in 2016 was largely focused on the level of control that the UK has over its borders and government, as exemplified by the leave campaign’s slogan of ‘Take Back Control’ (Vote Leave, 2018: 1). The debate has also spread to countries including (Guyot, 2018), Italy (Binnie, 2018), and (Escritt and Poltz, 2018).

While a range of countries in , Southern, and debate the level of control over their respective national borders, Europe’s has increasingly participated in cross-border cooperation projects since 1990 (Scott, 2002) and worked with the EU on transnational cooperation that foster further (Interreg, 2018). A prominent Cross-Border Cooperation programme of the EU is the Interreg Baltic Sea Region Programme. The programme consists of twelve countries that border the Baltic Sea and operates on a transnational scale to ‘support…integrated territorial development and cooperation for a more innovative, better accessible and sustainable Baltic Sea region’ (Interreg Baltic Sea Region, 2018). Programmes such as the Interreg Baltic Sea Region have evolved out of the EU’s desire for increased integration across the continent.

The EU describes itself as a union of ‘sovereign and independent member states…[that] have decided to pool some of their “sovereignty” in areas where it makes sense to work together’ (, 2018a: 7). Since the creation of the European Economic Community - the predecessor to the EU – with the Treaty of in 1957, a main focal point of EU policies 7 has been eliminating barriers to progress within Europe (, 1957). The 1986 ratification of the further cemented the EU’s desire for integration with the establishment of a single market for free movement of ‘goods, services, money and people’ (European Union, 2018a: 1) void of ‘internal frontiers’ (European Union, 1987: 7). Pursuant with the EU’s vision for an integrated Europe, a current priority for the EU is to converge towards a ‘Digital Single Market’ in which ‘data’ becomes the fifth pillar of free movement (European Commission, 2018b). The EU has been actively pursuing a Digital Single Market since 2015 (European Commission, 2015a). EU officials recognise that technology plays a growing role in people’s lives and envision a union in which European countries can easily digitally connect across borders and synthesize their data infrastructures (European Commission, 2016a). They argue that a Digital Single Market will result in economic growth, improved conditions for businesses, and an upgrade in digital access for citizens (Ibid).

While the EU is still in the process of making integration and data sharing through the Digital Single Market a reality (European Commission, 2018c), the integration of the data economy is already independently emerging within the Baltic Sea region. The EU member countries of Estonia and Finland have embarked on collaboration to exchange data and develop Information and Communications Technology (ICT) for e-government across borders (Population Register Centre, 2018a). Estonia and Finland developed the Nordic Institute for Interoperability Solutions (NIIS) in 2017 to manage the cross-border development of ICT and interoperability solutions (Nordic Institute for Interoperability Solutions [NIIS], 2018a). NIIS is a self-proclaimed ‘network and cooperation platform’ (NIIS, 2018b: 1) with an aim to create ‘digital society solutions and cross border cooperation’ (NIIS, 2018b: 1). This non-for- profit association asserts that it has a ‘unique’ operating model in comparison to other institutes around the world (Ibid).

I.1. Research Question and Hypothesis

Within this context, this paper explores the following research question: What factors explain the emergence of collaboration between Estonia and Finland for the joint development of ICT and electronic government solutions? 8

This author’s hypothesis posits that Estonia and Finland’s collaboration on ICT development has emerged from an environment of both favourable technical and non-technical factors, to include cross-border, value network, collaboration, and integration and interoperability.

I.2. Justification

This paper will offer insight into the emergence of collaboration between Estonia and Finland to develop ICT and share data across borders. The Chief Information Officer (CIO) of Estonia, Siim Sikkut, remarked in 2016 that Estonia is attempting to create a blueprint for Europe of how electronic government can surpass state borders (Sander, 2016). Estonia and Finland’s new collaboration has been understudied and under-discussed by academics and policymakers, yet can provide vital insight into the realities and implications of a Digital Single Market and moving beyond state borders for collaboration on digitalisation for state governments. Estonia and Finland are each considered very high in their level of electronic government, also known as ‘e-government’ ( Department of Economic and Social Affairs [UNDESA], 2018). In the United ’s 2018 e-government survey, both Estonia and Finland ranked in the top twenty countries worldwide for the development of e-government (Ibid). Additionally, the Organisation for Economic Cooperation and Development (OECD) wrote two reports on Estonia and Finland’s potential for collaboration on ICT development and digital services (Nauwelaers, Maguire and Marsan, 2013; Organisation for Economic Cooperation and Development [OECD], 2015). However, there is a lack of literature analysing the collaboration on ICT development that has now emerged. Although it is too early to evaluate the overall success of Estonia and Finland’s partnership, a case study on their joint ICT development has the potential to offer the EU and policymakers insight into the process of digital collaboration between two of the most digitally advanced governments in the world. Long term, the example of Estonia and Finland could materialize Sikkut’s vision: a model for the EU to establish a Digital Single Market across Europe.

Government’s reliance on digital to improve governance and policymaking is increasingly growing around the world (Sandoval-Almazan and Gil-Garcia, 2012). In recent 9 years, the literature on e-government has largely focused on its development within national borders (Casap and , 2017; Kabanov and Chugunov, 2017; Yang, Zheng and Pardo, 2012), rather than between different countries. Collaboration between nation-states on ICT development and e-government is a relatively new phenomenon with potentially vast implications for the future of inter-state relations. Indeed, this level of collaboration is desirable for a range of public and private actors due to the rewards it can potentially provide in solving challenging international problems (Su et al, 2005). Estonia’s CIO claims that Estonia and Finland’s collaboration on ICT development is significant in that it is one of the only examples in Europe of two countries connecting their e-government information systems across national borders (Sander, 2016). Their example offers scholars and government officials insight into new types of ICT collaboration that are occurring on an international level between neighbouring countries.

I.3. Structure

This paper will reflect on Estonia and Finland’s collaboration on ICT development through NIIS. Following a description of the research methodology for this paper, a literature review will give an overview of the literature on multinational ICT and e-government collaboration. Next, a theoretical framework section will explain the theories that contribute to an understanding of collaboration on e-government and ICT development between countries. Building on these theories, an existing theoretical framework for e-government collaboration called the ‘Multinational e-Government collaboration, information sharing and interoperability’ (Navarrete et al, 2010) framework is introduced. This framework will be applied to analyse Estonia and Finland’s collaboration on ICT development. Finally, the paper will conclude with the key findings that emerged from the case study and potential implications for future multinational collaborations on ICT.

I.4. Key terms

Before proceeding with the methodology, this section will clarify three terms that are central to this paper: collaboration, cooperation, and information and communications 10 technology. The terms ‘collaboration’ and ‘cooperation’ are commonly referenced within the field of public policy, yet often lack clarity (O’Flynn, 2009). In this paper, the term ‘collaboration’ will be used to refer to a formal relationship between actors that involves:

new structures, a common mission, shared planning, formal communication across multiple levels, pooling and jointly acquiring resources, shared rewards, and more risk (O’Flynn, 2009: 114).

‘Cooperation’ is a less formalized process, which is used to describe:

an informal relationship where there is no common mission/vision, where information is shared on an as needed basis, authority remains vested in the separate organisations, there is little risk, and resources and rewards remain separate’ (O’Flynn, 2009: 114).

The terms cooperation and collaboration are used by Estonia and Finland to talk about their partnership on ICT development, often interchangeably. However, this paper is focused on the creation of the two country’s formal collaboration on ICT development through NIIS, rather than their more informal initial cooperation. This paper is written with the understanding that true collaboration between Estonia and Finland began when they formed NIIS.

Finally, information and communications technology, referred to as ICT, is central to the creation of e-government (Koutrakou, 2010). There are numerous definitions found within ICT literature, but the most succinct and useful definition for the purposes of this paper is: ‘all technical means used to handle information and communication’ (Eurostat, 2016: 1), including the internet. ICT enables e-government to occur (Koutrakou, 2010).

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II. Methodology

II.1. Data collection

Research for this paper consisted of evidence obtained through a mixed-methods approach of document review and elite interviews. The author also travelled to , Estonia for the annual E-governance conference on 20-22 May 2018 to gather documents and identify potential interview participants. Documents reviewed for research included, but are not limited to: government reports, policy papers, interviews with elected officials, newspaper articles, governance documents for NIIS, books, and reports from international organisations. These documents were analysed for the factors that can explain Estonia and Finland’s collaboration and classified according to 22 pre-set codes, listed in appendix I. These codes will be explained further in this paper. Estonia and Finland’s high levels of government transparency simplified the process of accessing government documents for research. Key governance documents were available online through the Estonian and websites, as as the NIIS website. All of the documents were available in English and did not require translation.

In addition to documents, analysis in this paper draws on five semi-structured interviews with influential actors involved in Estonia and Finland’s development of collaboration. The researcher conducted phone interviews with Estonian and Finnish officials from 15 through 31 August 2018. Participants included current and former government officials from Estonia and Finland, as well as the private sector, who have been instrumental in the collaboration process on ICT development. Participants were first contacted through email and were sent a formal information document with details on the dissertation. Prior to conducting interviews, participants gave written consent by filling out a King’s London consent form. Interviews lasted between 30 minutes and one hour.

Four interviews were audio recorded and transcribed, while information from one interview was recorded in notes by the researcher. The responses were coded based off of a list of 21 pre-set codes. The codes were acquired from the model employed in this paper, the 12

‘Multinational e-government collaboration, information sharing and interoperability’ framework (Navarrete et al, 2010). One additional code emerged during the coding process. A copy of the codebook is listed in appendix I of this paper, and a sample list of the interview questions is listed in appendix II. All of the participants who were interviewed wish to remain anonymous. Content from interviews will be cited in this paper as interview1, interview2, etc. A full list of the interview participants is cited in the appendix III of this paper. However, due to the delicate of collaboration, they will only be referred to as their country of .

II.2. Data Analysis

This paper is a qualitative, single case study of Estonia and Finland’s collaboration on ICT development through NIIS. A single case study is employed in order to explain the instrumental factors of ICT collaboration between Estonia and Finland, develop a comprehensive understanding of the process (Babb et al, 2012; Shiveley, 2012), and understand the ‘causal mechanisms’ (George and Bennet, 2005: 21). The case of Estonia and Finland’s collaboration on ICT development through NIIS can be classified as an ‘extreme or unique case’ (Bryman, 2012: 70), as it has been heralded by the Estonian government as the ‘first cross-border for “whole-of-government” data exchange that would be permanent’ (Sander, 2016: 1). It was selected as a result of the unique example it can provide on digital collaboration between two countries.

This paper does not seek to evaluate NIIS or its development, but instead seeks to comprehend how collaboration was able to take place between Estonia and Finland. In analysing Estonia and Finland’s collaboration on ICT development, this paper uses deductive reasoning and employs the ‘Multinational E-Government Collaboration, Information Sharing, and Interoperability’ (Naverrete et al, 2010: 1) framework to test this paper’s hypothesis. Navarrete, Gil-Garcia, Mellouli, Pardo and Scholl’s model is premised on five different theories/frameworks: ‘theory of borderland studies’ (Brunet-Jailly, 2005: 645), ‘collaborative governance’ theory (Ansell and Gash, 2008), ‘inter-organizational’ theory (Faerman, McCafffrey and Slyke, 2001) ‘integration and interoperability’ theory (Scholl and Klischewski, 2007), and ‘value network’ theory (Allee, 2008). The model integrates these different theories/frameworks 13 into a single comprehensive model to explain e-government collaboration between nations (Navarrete et al, 2010). The framework will be employed to identify the factors that explain Estonia and Finland’s collaboration on ICT development. This paper does not seek to quantify the level of impact of each factor or identify the most influential factor. These are areas that warrant further research and lie outside the scope of this study.

II.3. Limitations

This author recognises that there are several drawbacks to the research design of this paper. This paper employed a mixed-methods approach to research, including both document review and semi-structured interviews. On the one hand, the technique of interviewing was chosen because it is beneficial to ‘establish…how subjective factors influence political decision- making, the motivations of those involved, and role of agency in events of interest’ (Rathburn, 2008: 686). Furthermore, interviewing is one of the most useful methods for scenarios, such as Estonia and Finland, where decisions were made by a select number of powerful and political individuals (Rathburn, 2008). However, interviewing has its limitations in that researchers must weigh how much of the information received is factual versus an opinion, and participants have the ability to lie (Ibid). In order to mitigate this, I took a semi-structured approach to interviews where I could tailor my questions more specifically to each participant and conducted thorough preparation. This paper also recognises that there is likely some bias in the results. It can also be argued that the research method of telephone interviews, rather than in-person interviews, stifled this researcher from the body language of interview participants, and forming a rapport with interview participants (Keats, 2000). I attempted to mitigate this by engaging in friendly banter with the participants at the beginning of each phone call and recording the interviews in order to pay closer attention to their speaking tones and hesitations when answering questions.

This dissertation employs a single case study to analyse Estonia and Finland’s collaboration on ICT development and e-government. Case studies are beneficial in establishing whether or not certain variables or factors mattered in producing a specific outcome, however they are limited in that they cannot determine ‘how much it mattered’ (George and Bennet, 2005: 25). This paper does not attempt to measure how much each factor mattered in creating e- 14 government collaboration in Estonia and Finland. It has also been argued that single case studies are fallible in that they are prone to selection bias (George and Bennet, 2005). In order to mitigate this, I researched other examples of multinational e-government collaboration in Europe to verify that Estonia and Finland were unique. Finally, the use of a pre-set framework to analyse e-government ICT collaboration can also be considered a limitation of this paper due to the fact that models have been viewed as over-simplifications of complex world events (John, 2012). However, I attempted to mitigate this by using an integrated model that takes into account the range of explanations for e-government collaboration.

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III. Literature Review

III.1. Overview of Multinational E-Government Collaboration

A number of scholars argue that the rise of the internet and technology have not only altered business and social interactions around the world, but the conduct of governments as well (Devadoss, Pan and Huang, 2002; Ho, 2002). They contend that government are leveraging technology to improve the delivery of government services (Zheng et al, 2009), decrease public spending, and reduce fraud (Harris, 2000). Scholars have provided a range of definitions for electronic-government, referred to as e-government. Scholl and Klischewski define it as the ‘the seamless integration of computer-supported government services (2007: 889). Meanwhile, Koutrakou views it as ‘a set of mechanisms and processes, based on the Internet and other information and communications technologies (ICTs), to enable the reform and modernisation of public administration and improve connectivity between governing bodies and the governed’ (2010: 285). This paper will adopt Koutrakous’ definition of e-government.

The resources and coordination needed for a government to implement e-government within their own borders are extensive (Devadoss, Pan, Huang: 2002). There are numerous studies on new intra-country e-government initiatives, including in (Kabanov and Chugunov, 2017), South (Manda, 2017), (Casap and Pettersson, 2017) and Taiwan (Yang, Zheng and Pardo, 2012). The challenges of implementing e-government are compounded when two or more nations attempt to collaborate (Navarrete et al, 2010). Literature has referred to collaboration that occurs based on ICT and other types of technology as ‘electronic collaboration’ (Romano, Pick and Roztocki, 2010: 117; Kock and Nosek, 2005). The terms ‘cross-border collaboration’ (Romano, Pick and Roztocki, 2010: 117), ‘cross-border intergovernmental relations/agreement sharing’ (Navarrete et al, 2009: 3) ‘multinational e- government collaboration’ (Navarette et al, 2010: 1) and ‘cross-boundary information-sharing and integration’ (Yang, Zheng and Pardo, 2012: S51) have each been used to describe a scenario in which electronic collaboration takes place between two or more nations.

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Overall, scholars have not reached a consensus on a precise term to describe the phenomenon. This paper will refer to the phenomenon as, ‘multinational e-government collaboration’. While multinational e-government collaboration is hindered by a variety of challenges including security concerns, poor relationships, and different levels of technology, it is beneficial in that it offers solutions to shared problems between nations (Su et al, 2005). Complex policy challenges ranging from control of a border to drug trafficking would benefit from improved information sharing and communication between governments (Ibid).

This emerging field of study is limited in research literature, as well as instances of successful collaboration between countries on electronic governance (Kalvet, Toots and Krimmer, 2018). However, since the launch of the EU’s Digital Single Market plan in 2015, new literature has begun to emerge in this field on the concept of the once-only principle (OOP) (Akkaya and Krcmar, 2018; Kalvet, Toots and Krimmer, 2018). OOP is a new EU principle that ‘states that any standard information that one public administration has already collected should be shared with other public administrations, within or outside the country’ (Kalvet, Toots and Krimmer, 2018: 1). In practise, this means that countries should be exchanging citizen’s information with one another so that individuals do not have to submit the same type of information to different countries (Ibid). As Europe becomes more interconnected and the number of people who work, retire or travel abroad increases, governments are looking for ways to conduct multinational e-government collaboration and simplify information sharing and administrative tasks (Akkaya and Krcmar, 2018). Currently, 19 EU countries are testing a ‘technical architecture that is about to interconnect national databases and data exchange layers’ (Kalvet, Toots and Krimmer, 2018). Additionally, they are working to study the potential barriers that they have identified to e-government collaboration between nations (Ibid). The literature on OOP anticipates barriers to collaboration in the areas of legislation, technology and interoperability, organization, and politics (Kavel, Toots and Krimmer, 2018). The results of the testing of OOP will provide data and insight for future research on multinational e-government collaboration (Ibid).

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III.2. Electronic-Government Integration, Interoperability and Information Sharing

While theories on multinational e-government are sparse, the concept is closely linked to a more robust field of literature on electronic-government integration, interoperability and information sharing. ‘Integration’, ‘information sharing’ and ‘interoperability’ are three interlinked terms that have been referenced throughout e-government literature to describe the ways different organizations or levels of government can connect to develop e-government (Scholl et al, 2012: 313). A review of e-government literature shows the high value that academics attach to these three terms for their role in the success of e-government implementation (dos Santos and Reinhard, 2012; Scholl et al, 2012; Scholl and Klischewski, 2007; Navarrete et al, 2010; Pardo, Nam and Burke, 2012; Su et al, 2005; Zheng et al, 2009). However, academics and e-government literature also reveal that the definitions of these three terms are convoluted (Harris, 2000; Scholl et al, 2012; Zheng et al, 2009). Several academics have found integration, interoperability and information to be so convoluted and intertwined that they created an overarching term to describe them: ‘INT-IS-IOP’ (Scholl et al, 2012).

Within e-government literature, information sharing occurs through the use of various forms of ICTs (Sandoval-Almazan and Gil-Garcia, 2012). It involves either the one-directional distribution of data or an exchange of data between different government units or organizations (Ibid). Information sharing is a way for government agencies to collect valuable information that they need to operate and solve problems (Yang, Zheng and Pardo, 2012). Integration can be defined as ‘forming a larger unit of government entities, temporary or permanent, for the purpose of merging processes and/or information sharing’ (Scholl and Klischewski, 2007: 897). Integration is often referred to in the literature as ‘process integration’ (Scholl et al, 2012: 313; Navarrete et al, 2010: 1), and can be challenging when agencies use different systems (Janssen and Cresswell, 2005). In general in e-government literature, information sharing and integration are connected within the definition of interoperability. Pardo, Nam and Burke define interoperability as ‘the capability to connect governments across boundaries to share information and integration service delivery’ (2012: 9). Whereas, Gottschalk and Solli-Saether (2009) and dos Santos and Reinhard (2012) refer to it as a process, framed by set rules, to connect information systems from different offices or jurisdictions. 18

III.3. Central debates

Two central debates have emerged in both multinational e-government collaboration literature and information-sharing, integration and interoperability literature. The first is whether e-government develops as a result of technical factors, or a mixture of technical and non- technical factors. Technical-focused studies view practical, technology-based factors as the impetus or barriers to e-government (Scholl et al, 2012). Non-technical literature began to emerge by academics that theorized that the success of e-governance is also determined by non- scientific factors (Ibid). Recent studies have argued that both technical and non-technical factors are necessary for e-government to occur (Ibid). The second debate is over the types of non- technical factors that impact collaboration.

The e-government integration, interoperability and information sharing literature provide theories and frameworks that are either technical or a mixture of technical and non-technical (Scholl et al, 2012). The different technical explanations for e-government interoperability have included: the design of the system’s architecture (Garlan, Allen and Ockerbloomer, 1995; Benson et al, 2002), data standards (Benson et al, 2002), and security models (Ali, Wahbi and Osman, 2016). The new, mixed-approach theories and frameworks have instead argued that a wide range of non-technical factors should also be considered (Scholl et al, 2012; Lam, 2005; dos Santos and Reinhard, 2012; Scholl and Klischewski, 2007; Scholl, 2005). These factors include, but are not limited to: policy and political factors (Pardo, Nam and Burke, 2012), leadership factors (Ho, 2002), economic factors (Janssen and Cresswell, 2005), organisational factors (Yang, Zheng and Pardo, 2012), management factors (Andersen, 2006), and geographical factors (Yang, Zheng and Pardo, 2012), Theories that include a mixture of technical and non- technical factors are of the most interest to this paper, as I propose that Estonia and Finland’s e- government collaboration has developed from both technical and non-technical factors. Scholl (2005) has argued that, perhaps, the non-technical factors to e-government can be bigger barriers to e-government integration than the technical factors.

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Within multinational e-government collaboration literature, the frameworks that have emerged to explain the phenomena contend that it occurs as a result of a mixture of technical and non-technical factors (Navarrete et al, 2010; Romano, Pick and Roztocki, 2010). However, there is no consensus on the specific factors or their level of influence. Two frameworks that have been created to analyse and explain the factors that lead countries to engage in e-government collaboration are the ‘motivational inter-organizational collaboration model’ (Romano, Pick and Roztocki, 2010: 127) and ‘Multinational e-government collaboration, information sharing, and interoperability’ model (Navarrete et al, 2010: 1). Both of these frameworks are compilations of frameworks from different areas of study including: inter-organizational studies (Lee et al, 2006), border studies (Brunet-Jailly, 2005), and collaboration studies (Ansell and Gash, 2008).

Romano, Pick and Roztocki’s 2010 ‘inter-organizational collaboration’ (127) model is premised on the notion that collaboration depends on a participant’s ‘motivation’ (127) and ‘cooperation quality’ (127). Motivation refers to participant’s willingness to work together, while cooperation quality concerns the multiple factors that effect collaboration including timelines and ease of cooperation (Ibid). Navarrete, Gil-Garcia, Mellouli, Pardo and Scholl’s 2010 framework, ‘Multinational e-government collaboration, information sharing, and interoperability’ (1), integrated multiple frameworks to create a model for multinational collaboration. The model contends that multinational e-government can be analysed along four strands of factors: cross-border factors, value network factors, interoperability and integration factors, and collaboration factors (Navarrete et al, 2010). This framework provides a more flexible structure to analyse e-government collaboration between two countries and will be utilised in this paper. The specific theories and frameworks upon which this model is built will be discussed in the theoretical framework of this paper.

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IV. Theoretical Framework

IV.1. Theoretical underpinnings

The ‘Multinational E-Government Collaboration, Information Sharing and Interoperability’ (Navarrete, 2010: 1) framework, hereafter known as the MECII framework, creates a lens through which to understand the process of collaboration on digitalisation. This section will explore the theoretical underpinnings of the framework before the model is introduced. Later in this paper, framework will be applied to the case of Estonia and Finland’s collaboration on ICT development.

IV.1.1. Border Theory

Brunet-Jailly (2005) created an overarching ‘theory of borderland studies’ (645) for scholars to understand the complexity of borders and territorial borderlands regions and their specific brand of politics, cultural atmosphere and geography (Brunet-Jailly, 2005; Navarrete et al, 2010). Brunet-Jailly’s 2005 theory contends that borders and borderlands can be analysed through four lenses: ‘local cross-border culture’ (645), ‘the policy activities of multiple levels of governance’ (645), ‘local cross-border political clout’ (645), and ‘market forces and trade flows’ (645). The central hypothesis of Brunet-Jailly’s theory is that borderlands become areas of integration for territories when border communities become more similar or connected in each of these four areas (2005). Figure 1 is a visual of the framework.

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Figure 1: Brunet-Jailly, 2005: 645

First, the lens of ‘local cross-border culture’ (Brunet-Jailly, 2005: 645) observes the degree to which border areas share the same culture. While neighbouring regions around a border often belong to different nations, they can still share a sense of and culture (Geddes, 2005). The culture of an can be described by a melding of factors that includes the language, religious-preferences, ethnicity, societal background and shared history of the a people in that area (Ibid). Border regions with a similar culture could influence the amount of interaction or sense of good will between actors on either side of the border (Ibid). Second, the dimension of ‘policy activities of multiple levels of government’ (Brunet-Jailly, 2006: 645) observes the strength of connection and policy coordination between different levels of governments and organizations on either side of the border. The concept of multilevel governance is central to this issue (Ibid). Within the multilevel governance model, a state’s policymaking decisions are divided between multiple actors at different levels of government who engage in both domestic and international politics (Hooghe and Marks, 2001). It is an alternative to the concept of ‘state- centric’ governance whereby policymaking revolves around the central government (Hooghe and Marks, 2001: 2-3). 22

Third, the ‘local cross-border political clout’ (Brunet-Jailly, 2005: 645) of a borderland refers to its ‘local political activism and organisational capacity’ (Brunet-Jailly, 2005: 639). It can be observed by the links that have formed between two communities, such as the creation of new cross-border institutions (Brunet-Jailly, 2005). The concept of a ‘bi-national ’ (Brunet- Jailey, 2005: 639) is integral to this lens. The term ‘binational city’ refers to the shared identity that can form in a border region between two different that lie in two different countries (Ehlers, 2001: 21). On the whole, this dimension helps scholars understand whether a territorial border is the dividing line between two distinct communities or a political barrier that is dividing a collective community (Brunet-Jailly, 2005). Finally, the dimension of ‘market forces and trade flows’ (Brunet-Jailly, 2005: 645) observes the people, goods and assets that are exchanged across a border. Brunnet-Jailly argues that these flows have an impact on the cohesion of a border region and how organizations and actors interact within them (2005). She supports Castell’s argument that is causing the world to become a more interconnected, information-based society (2000). In this environment, it is possible that institutions and organizations will transition from being designed as a ‘space of place’ (2010: 34) to a ‘space of flows’ (2010: 34).

IV.1.2. Collaborative governance theory

Governance can be described as ‘regimes of , rules, judicial decisions, and administrative practices that constrain, prescribe, and enable the provision of publicly supported goods and services’ (Lynn, Heinrich and , 2001: 7). Over time, scholars have identified multiple classifications of governance (Ansell and Gash, 2008), including collaborative governance. Collaborative governance involves actors from both the public and private sectors (Ansell and Gash, 2008). Ansell and Gash (2008) define it as:

A governing arrangement where one or more public agencies directly engage non-state stakeholders in a collective decision-making process that is formal, consensus-oriented, and deliberative and that aims to make or implement public policy or manage public programs or assets. (544) 23

Ansell and Gash’s theory of collaborative governance focuses on the conditions in which the process occurs (2008). They maintain that the collaboration process is influenced by three critical factors: ‘starting conditions, institutional design, and leadership variables’ (Ansell and Gash, 2008: 550). A model of the theory is presented in Figure 2. Overall, they argue that the most successful collaborations have high levels of trust and interdependencies between the participants and are built over time, rather than in a rushed fashion (Ansell and Gash, 2008).

Figure 2: Ansell and Gash, 2008: 54

Firstly, ‘starting conditions’ (Ansell and Gash, 2008: 549) for collaboration are important because they will determine the ‘level of trust, conflict and social capital that become resources or liabilities during collaboration’ (Ansell and Gash, 2008: 550). In particular, the power and resources balance, history of cooperation, and incentives to participate are integral components of the starting environment for collaboration between actors (Ibid). Imbalances in participant’s level of power and amount of resources can lead to discord and manipulation in collaboration (Ibid). Additionally, problems can arise when the infrastructure of a participating organization differs from the other participant’s (Ibid). Ideally, collaboration participants have similar levels of power and resources (Ibid). At the same time, participant’s history of cooperation with one 24 another can encourage or discourage success (Ibid). Participants who have had positive previous experiences with cooperation can build off of their good-will and triumphs. Participants who have had negative experiences in cooperation will be less likely to collaborate unless they work to rebuild trust or have a high level of interdependency (Ibid). Finally, participants will each need incentives to come to the table and collaborate. Participants who have a clear understanding of one another’s expectations and incentives for collaboration will be more likely to succeed (Ibid).

Second, the institutional design of collaboration will influence the structure of proceedings (Ansell and Gash, 2008). Institutional design is comprised of the rules and protocols that govern the collaboration process (Ibid). A key question of institutional design is: who has access to participate in the process (Ibid)? As a general rule, managers of a collaboration process should ensure that it is ‘open and inclusive’ (Ansell and Gash, 2008: 255) and be persistent in seeking new members who will strengthen the collaboration (Ibid). Furthermore, it is vital that the process be transparent and rule-based to increase trust (Ibid). Collaborations that lack from similar types of networks and use deadlines are also more conducive to success (Ibid). Finally, the ‘facilitative leadership’ (Ansell and Gash, 2008: 550) of key actors is influential in determining whether or not collaboration will take place. Leaders can play important roles in assembling participants, mediation and the mobilization of projects (Ibid).

IV.1.3. Inter-organizational cooperation theory

In a similar vein to collaborative governance theory, inter-organizational cooperation theory focuses on the process of cooperation between actors from the public and private sector and how they are able to overcome a proclivity for competition (Faerman, McCafffrey and Slyke, 2001). However, collaborative governance is distinct from inter-organizational cooperation in that it is focused on the formal process of collaboration, rather than the informal process of cooperation. Faerman, McCaffrey and Slyke (2001) make the case that inter- organizational cooperation is dependent on ‘initial dispositions towards cooperation, issues and incentives, leadership, and the number and variety of active groups’ (385). Their findings are shared by Ansell and Gash (2008), but they make the addition of the factor ‘number and variety 25 of active groups’ (Faerman, McCaffrey, and Slyke 2001: 385). The range of actors involved in the process can impact the ease of cooperation (Faerman, MccAffrey, and Slyke, 2001) and structure of the organisation (Navarrete et al, 2010). The organization of the collaboration can take various forms depending on the actors involved that range from a non-profit organisation NIIS to a federation, commission or co-operative (Ibid).

IV.1.4. Integration and Interoperability theory

Scholl and Klischewski argue that both integration and interoperability are necessary for e-government to occur (2007). Based off of e-government literature, they identified nine different constraints that prevent e-government integration and interoperability from taking place. These constraints include: ‘constitutional/legal’, ‘jurisdictional’, ‘collaborative’, ‘organizational’, ‘informational’, ‘managerial’, ‘cost’, ‘technological’, and ‘performance’ (Scholl and Klischewski, 2007: 893-895).

Constitutional/legal, jurisdictional, collaborative, and organizational constraints refer to the non-technical and structural aspects that impact e-government integration and interoperability (Scholl and Klischewski, 2007). A country’s constitution and legal systems sets the boundaries for the level of integration and interoperability that can take place in a country or between countries (Ibid). Along this line, there are different levels of jurisdiction and authority for committing to e-governance (Ibid). E-government integration and interoperability can only be imposed to a limited extent and often require different participants to independently decide if they would like to integrate their systems (Ibid). Collaborative constraints, such as an actor’s history and style of leadership (Ansell and Gash, 2008; Faerman, McCaffrey and Slyke, 2011) in integration and interoperability can also play a role in e-government success. Finally, organizational constraints refer to the operation processes of participants and how they can limit e-government integration and interoperability when ‘process, systems and policies’ (Scholl and Klischewski, 2007: 894) do not align.

Informational, managerial, cost, technological, and performance constraints are the technical and administrative factors that can impact e-government integration and 26 interoperability (Scholl and Klischewski, 2007). Informational constraints refer to the barriers to participant’s sharing information with each other, such as their level of willingness to divulge specific data or the quality of the information that they collect (Ibid). The costs to implement e- government are important because they can either limit the extent of integration or enable more extensive projects (Ibid). Next, technological constraints refer to the level of technology capabilities that different participants have for interoperability to occur (Ibid). Incompatible systems or low levels of technology infrastructure on the part of a participant can hinder progress (Ibid). Finally, performance constraints refer to hindrances to the performance of an integrated system (Ibid). Scholl and Klischewski contend that interoperability will increasingly be a struggle as the number of actors and individuals who use the system increases (2007).

IV.1.5. Value Network Theory

A ‘value network’ (Allee, 2008:6) can be defined as ‘any set of roles and interactions in which people engage in both tangible and intangible exchanges to achieve economic or social good’ (Allee, 2008: 6). A tangible exchange involves the of substantial resources such as capital or data, while an intangible exchange is the interchange of abstract resources like trust, knowledge or relationships (Ibid). Value networks can be both internal and external in their formation (Ibid). Internal value networks focus on the connections within an organization, while external value networks are the connections that an organization has with outside partners and customers (Ibid).

Allee’s value network theory purports that there are three crucial elements to a value network: ‘roles, deliverables and transactions’ (2008: 14). Within the value network, participants contribute by having a role and performing specific tasks (Ibid). Participants are not limited to individuals, but can come in various forms such as a team of people or an entire institution (Ibid). Participants engage in ‘transactions, or activities, [that] originate with one participant and end with another’ (Allee, 2008: 14). The tangible items that change position during a transaction are referred to as ‘deliverables’ (Allee, 2008:14). These three elements can be mapped out once they are identified and analysed (Ibid).

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IV.2. Multinational E-Government Collaboration, Information Sharing and Interoperability Framework

This paper will utilise the ‘Multinational E-Government Collaboration, Information Sharing, and Interoperability’ (Navarrete et al, 2010: 1) model to investigate Estonia and Finland's process of collaboration on ICT development and the factors that contributed to the creation of NIIS. Navarrete, Gil-Garcia, Mellouli, Pardo and Scholi integrated existing theory and frameworks to create a model that can ‘guide planned empirical research on the phenomena of multinational e-government collaborative networks and information sharing initiatives across national borders’ (Navarrete et al, 2010: 1). The framework contends that four dimensions underlie the success of multinational collaborations on e-government: ‘collaboration’, ‘value networks’, ‘integration and interoperability’, and ‘cross-border’ (Navarrete et al, 2010: 7). The theoretical frameworks that steered their model were discussed in the previous section. Figure 3 provides a visual depiction of the model.

Figure 3: Navarrete et al, 2010: 1

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Collaboration refers to the factors that ensure the formation and upkeep of collaborative networks and governance structures that allow for cross-border information sharing and interoperability to occur (Navarrete et al, 2010). As supported by collaborative governance theory (Ansell and Gash, 2008), the process of collaboration is often challenging due to the range of diverse actors involved who can have various objectives, drives, and visions of cooperation (Navarrete, 2010). This dimension draws on Ansell and Gash’s (2008) framework and Faerman and Slyke’s (2001) inter-organizational theory. The model combines their theories to identify six factors that impact the collaboration process:

• Number and variety of participant entities • Initial disposition toward cooperation • Institutional design • Facilitative leadership • Strength and richness of incentives • Power and resources imbalances (Navarette et al, 2010: 4-5)

The framework’s second dimension of focus is the value network. This dimension draws from Verna Allee’s (2008) theory of the value network. Allee defines a value network as ‘any set of roles and interactions in which people engage in both tangible and intangible exchanges to achieve economic or social good’ (Allee, 2008: 6). Within a value network there are three factors that influence cross-border collaboration and can be examined through this framework:

• Roles • Transactions • Deliverables (Navarrete et al, 2010: 5)

The third dimension for collaboration is cross-border. Building on Brunet-Jailly’s ‘theory of borderland studies’ (2005: 645), the cross-border dimension of collaboration views borders as 29 areas that can influence cooperation between multinational actors (Navarrete et al, 2010). Navarrete, Gil-Garcia, Mellouli, Pardo and Scholl (2010) propose that the cross-border dimension of collaboration be examined according to Brunet-Jailly’s (2005) four different frames:

• Market forces and trade flows • Policy activities of multiple levels of governance • Political clout of borderland communities • Culture of borderland communities (Navarrete et al, 2010: 6)

Finally, integration and interoperability are seen as integral to the process of digital collaboration across borders (Navarrete et al, 2010). The ability of multiple countries to integrate their information systems and operate cross-border data sharing is dependent on factors that speak to the structure of a country and its resources (Ibid). This dimension is based on Scholl and Klischewski’s (2007) integration and interoperability literature. The framework hypothesises that the following factors influence e-government collaboration:

• Constitutional/legal • Jurisdictional • Organizational • Informational • Managerial • Cost • Collaborative • Technological • Performance (Navarrete et al, 2010: 6-7)

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V. Case Study

V.1. Case: Estonian and Finnish Cooperation on ICT Development and e-government

V.1.1 Building Cooperation

On 10 2013, the Prime of Estonia, Andrus Ansip, and Prime Minister of Finland, , signed a formal Memorandum of Understanding (MOU) pledging to collaborate on the development of ICT and e-government. Each Prime Minister digitally signed the MOU from their respective country (NIIS, 2018a). Estonia defines a digital signature, or electronic signature, as a unit of data that demonstrates an individual’s connection to a document through technology that can determine their identity and time of signature (Digital Signatures Act, 2000). Estonia herald’s the digital signature of their MOU with Finland as unique (Friedman, 2013) in that it is the ‘first digitally signed international agreement between governments’ (OECD, 2015, p. 244). In 1998, US President Bill Clinton and Irish Prime Minister Bertie Ahern digitally signed a ‘US-Ireland joint communique' on electronic commerce (Harney, 2002:150) and became the earliest heads of state to digitally sign a document (Friedman, 2013). However, the Government Chief Information Officer (CIO) of Estonia, Siim Sikkut, has referred to Clinton and Ahern’s agreement as ‘a one-time event with specially issued ID-cards, with their signatures not carrying full legal weight (only ceremonial value)’(Friedman, 2013).

Estonia and Finland’s 2013 MOU ceded authority to Estonia’s Ministry of Economic Affairs and Communications and Finland’s Ministry of Finance to organize and implement ICT collaboration between the two countries (Memorandum of Understanding [MOU], 2013). At the same time, it also encouraged other Estonian and Finnish institutions to take part in the coordination of collaboration (Ibid). Four key areas for cooperation between the two countries were laid out in the MOU:

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1. Estonia’s - Source Code will be implemented for practical use in Finland as a national data exchange layer. 2. Finland and Estonia will cooperate in the development of future versions of the X-road platform and the Finnish national data exchange layer. 3. Cross-border cooperation will be advanced in multiple fields of digital society, economy and government. 4. The Participants will share with each other information that is relevant to achieving the aforementioned objectives. (MOU, 2013: 2)

Estonia’s first action following the signing of the MOU was to give a copy of their X- road source code, which is the computer programme instructions to create X-road, to Finland for free (Interview2, 2018; NIIS, 2018a). Access to the source code gave Finland the ability to create their own X-road, called Suomi.fi, in 2015 (Population Register Centre, 2016a). The X-road is a ‘data exchange layer’ (Riik and Roosna, 2016: 72) that was initially created by Estonia to enable different government offices to digitally access and exchange data (Ibid). Since its introduction in 2001, it has become the ‘backbone’ (e-Estonia, 2018a) of Estonia’s electronic-government system. X-road provides an environment where databases from the public and private sectors can safely connect and exchange data (Ibid). It is a decentralized system that allows different databases to communicate with each other, instead of storing all of the data in one centralized database (Information Systems Authority, 2016a). Importantly, any type of information system or technical platform in Estonia that is secure can access the X-road (Riik and Roosna, 2016). This makes it more accessible to use on a large scale. The X-road is revolutionary in that ‘data is stored where it is created’ (Information System Authority, 2016: 20 sec.) and does not need to be copied into any other databases (Ibid). As an example, X-road enables Estonian to digitally send information on newborn babies to the country’s registration office (Ibid). When the registration office digitally receives information, the information is simultaneously sent to the health insurance office to enroll the newborn in a healthcare programme and assign them a Doctor (Ibid).

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Prior to the 2013 MOU, Estonia only used X-road to connect with other Estonian organisations. At the time, Finland was administering its e-government through a national central database (Interview5, 2018). After Finland was given access to the X-road source code, Estonia and Finland began to pursue their first joint-project: the development of an interconnected X- road that would enable Estonia and Finland to exchange cross-border data (NIIS, 2018a). Initially, the project to redevelop the X-road was a cooperation project managed by two government offices: the Information System Authority for Estonia (RIA) and Population Register Centre of Finland (VRK) (Ibid). RIA was founded in 2011 to manage Estonia’s information system and operates within the Estonian Ministry for Economic Affairs and Communication ( of Estonia, 2018). VRK was setup in 1969 and is tasked with overseeing Finland’s e-government services (Population Register Centre, 2018b). Figure 4 provides a map of this working structure.

Figure 4: NIIS, 2018a

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However, this initial setup, and VRK and RIA’s oversight of project development, was short lived and failed to produce real collaboration (NIIS, 2018a; Interview4, 2018). Under this cooperation model, the VRK and RIA were separately developing a new X-road and constantly faced challenges with communication, inefficiency and progress (NIIS, 2018a). In order to create a more productive and comprehensive collaboration process between the two countries, Estonia and Finland decided to create a new cross-border institution that could produce real collaboration and serve as a network to promote innovation between the two countries (Ibid). Thus, the Nordic Institute for Interoperability Solutions was born.

V.1.2. Nordic Institute for Interoperability Solutions

NIIS is the structure through which collaboration between Estonia and Finland on cross- border ICT development takes place (NIIS, 2018a). During the ’s state visit to Finland in March 2017, Finland’s Minister of Foreign Trade, Kai Mykkänen, and Estonia’s Minister of Entrepreneurship and Information Technology, Urve Palo, signed an agreement to establish NIIS (Ibid). NIIS is a stand-alone organization that ‘focuses on practical collaboration, sharing experience and promoting innovation (NIIS, 2018a: 2) and is co-managed by the Estonian and Finnish governments (NIIS, 2018c). In accordance with O’Flynn’s definition of collaboration (2009), NIIS has its own mission, methods for joint planning and communications, (NIIS, 2017) as well as the shared reward of data exchange for both countries. Although the VRK and RIA worked on redeveloping the X-Road prior to the creation of NIIS, it was not viewed as truly collaborative because each organization was working in its own (NIIS, 2018a). NIIS was designed to operate as a non-profit association and was formally registered in Estonia in June 2017 when Finland’s Director General of the Ministry of Finance, Anna-Maija Karjalainen, and Estonia’s Minister of Entreprenuership and Information Technology, Urve Palo, signed a Memorandum of Association (Ibid).

NIIS is headquartered in Tallinn, Estonia with the aim ‘to ensure the quality, sustainability, cross-border capability of core e-Government infrastructure components; to save resources upon the development of digital society and cross-border cooperation’ (NIIS, 2017: 1). 34

The organization is tasked with activities to strengthen the e-government structure of member states including:

1.3.1 management, development, verification, and audit of the source code; 1.3.2 administration of documentation; 1.3.3 administration of business and technical requirements; 1.3.4 conducting development; 1.3.5 development and implementing principles of licensing and distribution; 1.3.6 providing second-line support for members; 1.3.7 international cooperation. (NIIS, 2017: 1)

NIIS was tasked with taking over the management of the X-Road project when it was first established (NIIS, 2018a). It is currently only conducting work on the X-Road, but has been designed to act as the managing entity for future cross-border ICT development projects (Interview1, 2018; Interview4, 2018). Since NIIS was created and designated as the collaborative mechanism for cross-border ICT development, it has had had multiple achievements. First, in 2018, Estonia’s X-road data exchange system and Finland’s Suomi.fi data exchange system were connected (Population Register Centre, 2018a). This will allow for the countries to start exchanging data. Second, in March 2018, NIIS ‘published its first public procurement of X- road software core development’ (NIIS, 2018d). Third, in May 2018 the Estonian and Finnish governments held a historic first jubilee meeting in which they discussed new joint-projects for NIIS to conduct and committed to finding new member countries to join the institute (NIIS, 2018e). Next, NIIS chose its first public procurement partner in June 2018. The private company Gofore will be working with NIIS to develop the X-road over the next three years (NIIS, 2018f). Finally, in August 2018 NIIS announced that it had begun the first-ever joint development of the X-Road core (NIIS, 2018g).

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V.2. Application of framework

This section of the paper utilises the ‘Multinational e-government collaboration, information sharing, and interoperability’ (Navarrete et al, 2010: 7) framework to analyse Estonia and Finland’s process of collaboration and reveal the factors that explain the emergence of collaboration through NIIS.

V.2.1. Collaboration Factors

Number and variety of participant entities

The decision to limit the number of participants formally involved with NIIS to a small number of actors at the national level, and a small-staff of private actors from both Estonia and Finland, decreased the difficulty of collaboration. Cooperation is most likely to occur when there are a small number of participants who are similar in their roles (Faerman, McCaffrey and Slyke, 2001). In this case, collaboration was heavily influenced and structured by similar government officials. The development of NIIS was negotiated at the national level between public sector officials from Estonia’s Ministry of Economic Affairs and Finland’s Ministry of Finance (Interview1, 2018; Interview2, 2018; Interview3, 2018; Interview4, 2018), as well as government lawyers (Interview2, 2018). Although the EU has been interested in the two countries’ efforts, they did not have any involvement in the process (Interview1, 2018; Interview4, 2018) and it is thought that their involvement would have made the process ‘slower and more bureaucratic’ (Interview2, 2018).

In creating NIIS, it was seen as crucial that the process and organisation be managed by national governments (Interview1, 2018; Interview3, 2018). Only countries can be formal, managing members of NIIS (Interview1, 2018; NIIS, 2017). Presently, Estonia and Finland are the only member countries (Interview1, 2018), however, the institute is designed to accommodate membership from additional countries (Interview1, 2018). Country membership is contingent on preconditions that require members to ‘have power to implement the core e- Government infrastructure components directly or indirectly within a member country in public 36 interest’ (NIIS, 2017: 2), pay a membership fee, and accept the terms of membership. The structure of NIIS and types of actors has been mapped in a diagram of the organization in Figure 2.

Figure 5: NIIS, 2018i

Based off of interviews (Interview1, 2018; Interview2, 2018; Interview3, 2018; Interview4, 2018; Interview 5, 2018) and research (NIIS, 2018a; NIIS, 2018h) the participating entities involved in collaboration can be divided into two categories, core entities and periphery entities.

Core entities: • Estonia’s Ministry of Economic Affairs and Communications (public sector). • Finland’s Ministry of Finance (public sector). • Estonia’s Information System Authority (public sector). • Finland’s Population Register Centre (public sector). • Employees of NIIS (private sector).

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Periphery entities: • 1-2 development teams (private and public sectors). • X-Road Community of international users and developers of the X-Road (private and public sectors). • National and subnational actors that give information and technology support to Estonian and Finnish national governments (private and public sectors). Examples include: o Valtori organization. o CSC non-profit Finnish centre of expertise on ICT. o Estonia’s Ministry of the Interior Information Technology and Development Center (SMIT). o Finnish Centre for Open Systems and Solutions (COSS). • International actors, and actors from the , who want to implement the X-road in their countries and initiate collaboration with Estonia and Finland.

Initial disposition toward cooperation

The level of trust that Estonia and Finland developed, precipitating the creation of NIIS, played a role in the emergence of collaboration. A history of positive cooperation between actors can create high levels of trust that facilitate collaboration (Ansell and Gash, 2007) The Estonia and Finnish governments have a history of positive cooperation and collaboration leading up to the creation of NIIS. Estonia has ‘always looked up to Finland’ (Interview3, 2018). The Presidents and Prime Ministers of Estonia and Finland often held face-to-face meetings in the years leading up to the ICT MOU (Republic of Estonia, 2009; Republic of Estonia, 2010) After a joint meeting several months prior to signing the 2013 ICT MOU, the Estonian and Finnish Prime Ministers remarked that the two countries had reached an unprecedented level of integration after deliberately working to strengthen their relationship over the years (Estonian Government, 2013). Prior to NIIS, the Estonian and Finnish governments also collaborated on several projects (Interview2, 2018). For instance, Estonia and Finland have been part of the EU’s Strategy for the Baltic Sea Region (EUSBSR) that began in 2009 (European Union Strategy for the Baltic Sea Region, 2018). EUSBSR is the EU’s first macro-regional strategy for states in a shared region to common problems; it contains 12 states (Ibid). Additionally, since 2013, 38

Estonia and Finland have worked on the project to build a gas pipeline between the two countries (European Commission, 2015b).

Over the years, the governments have jointly commissioned reports on their levels of readiness for cooperation. In 2008, a bilateral report was commissioned by the former Estonian and Finnish Prime Ministers Andrus Ansip and . The Prime Ministers tasked Jaakko Blomberg, Finland’s former Ambassador to Estonia, and Gunnar Okk, the Vice- President of the Nordic Investment Bank and an Estonian citizen, to create a report on how Estonia and Finland could cooperate over the next 22 years to overcome the challenges of globalization (Blomberg and Okk, 2008: 7-8). The 77-page report identified 14 areas for cooperation, including ICT (Ibid). In establishing cooperation on ICT development, the 2013 Memorandum of Understanding between Estonia and Finland cites the 2008 ‘Opportunities for Cooperation between Estonia and Finland’ (Blomberg and Okk, 2008) bilateral report as an influence in their formation of cooperation. Later, in 2014, Estonia and Finland asked the Organization for Economic Cooperation and Development (OECD) to produce a study on their capacity for ‘joint public governance’ (OECD, 2015: 3).

Institutional design

Another factor that has been crucial to Estonia and Finland’s collaboration on ICT development through NIIS is an institutional design that is rule-based, legitimate, and allows each country to retain their sovereignty. At the same time, the independent, non-profit status of NIIS has allowed for the organization to be flexible and functional (Interview1, 2018). As noted in the theoretical section of this paper, the way that collaboration is organised and the rules that define it impact its (Ansell and Gash, 2007; Navarrete et al, 2010). The creation of a formalized structure for governance can be pivotal to the legitimisation of collaboration (Ansell and Gash, 2007). NIIS is the formal structure for ICT collaboration between Estonia and Finland (NIIS, 2018a). The rules for the operation of NIIS were created by Estonia’s Ministry of Economic Affairs and Finland’s Ministry of Finance (MOU, 2013) and formalized in a 2017 Memorandum of Association (NIIS). Management and oversight of NIIS is divided into three parts: the General Meeting, Management Board and Advisory Group (NIIS, 2017; NIIS, 2018a). 39

The General Meeting is the ‘highest body’ (NIIS, 2017:1) of NIIS and is comprised of one government representative from each member state. Presently, representatives of the member states include Finland’s Director General of the Ministry of Finance, Anna-Maija Karjalainen, and Estonia’s Deputy Secretary General for Communications and State Information Systems, Siim Sikkut (NIIS, 2018a). However, NIIS was designed with the intent for it to become a multilateral institute that involves a range of additional member states (Interview1, 2018; Interview2, 2018; Interview3, 2018). Neighbouring (Interview3, 2018) and (Interview1, 2018) have been suggested as the next potential members. Representatives have the ability to pass resolutions that are approved by more than one half of the members at General Meetings that take place at a minimum of twice per year (NIIS, 2017). Currently, both representatives must agree for a resolution to pass. The General Meeting has a wide range of oversight responsibilities that include, but are not limited to:

• ‘approve and monitor strategy, budget and action plan;’ (NIIS, 2017: 2) • ‘develop and approve the best practices for the governance of the Association and for involvement’’ (NIIS, 2017: 2) • ‘approve the membership fee;’ (NIIS, 2017:2) • ‘assess and decide membership and partnership applications;’ (NIIS, 2017: 2) • ‘appoint and remove members of the management board;’ (NIIS, 2017: 2).

NIIS’s Management Board is tasked with ‘the day-to-day management of the Institute’ (NIIS, 2018a: 1). The Management Board is chosen by the General Meeting and is comprised of between one and three members who serve for three years (NIIS, 2017). Currently, the Management Board contains only one member, Ville Sirviö, the Chief Executive Officer (CEO) (NIIS, 2018a). According to the MOA, the Management Board has the authority to perform the following tasks:

3.13.1. draw up the project of the action plan and budget, and present it to the general meeting; 3.13.2. prepare a report on the observance of the action plan and budget; 40

3.13.3. prepare annual report; 3.13.4. involve additional working groups and experts; 3.13.5. call the general meeting; 3.13.6. hire personnel; 3.13.7 carry out everyday economic activities. (NIIS, 2017: 2-3)

The third body of NIIS is the Advisory Board (NIIS, 2018a). This body is not formalized in NIIS’s MOA (NIIS, 2017) and does not have the authority to make decisions on behalf of NIIS, like the General Meeting and Management Board (NIIS, 2018a). Its informal role is to act as an advisor to the CEO and intermediary between the Management Board and staff at NIIS, and the members of the General Meeting (Ibid).

Facilitative Leadership

In accordance with collaborative governance theory (Ansell and Gash, 2008), the leadership of key government officials has been influential in creating collaboration between Estonia and Finland. Cross-border ICT collaboration between Estonia and Finland emerged from the ‘top-down’, with the process being led by top government officials from each country (Interview3, 2018) Although many of the previous Prime Ministers from Estonia and Finland have ‘shaken hands and…[declared there should be]…more collaboration between Estonia and Finland’ (Interview2, 2018), it wasn’t until Estonian Prime Minister Andrus Ansip and Finnish Prime Minister Jyrki Katainen were in office that the two countries took meaningful steps towards ICT collaboration (Interview2, 2018; MOU, 2013). Prime Ministers Andrus Ansip and Jyrki Katainen were the main actors to initially legitimise Estonia and Finland’s e-government partnership by signing the 2013 ICT MOU between the two countries. Andrus is currently the Vice President and leader of the EU’s Digital Single Market project (European Commission, 2018d).

Past Estonian President Toomas Hendrik was also instrumental in activating collaboration between Estonia and Finland. Ilves has been heralded as the ‘architect’ of Estonia’s 41 e-government system for encouraging Estonia to digitalise government in his role as Minister of Foreign Affairs when the country regained from Russia in 1991 (High, 2018). Throughout his Presidency from 2006-2016, he fostered an environment that encouraged digitalisation and innovation, as well as supported Estonian and Finnish collaboration for cross- border information exchange (Shah, 2017; Office of the President, 2016a). During a 2016 on Estonian and Finnish innovation cooperation, where both Estonian and Finnish Presidents were present, President Ilves outlined a way forward for ICT collaboration between the two countries, stating that:

To achieve that goal, we promptly need to reach a common understanding about legal solutions and the shaping of processes, as this is the only way to use these opportunities offered by technology (Office of the President, 2016b).

The current President of Estonia is and the Finland’s current President is Sauli Niinisto. The official creation of NIIS occurred in Finland on 7 March 2017 during President Kaljulaid’s state visit, with the signing of the Formation and Cooperation Agreement (NIIS, 2018a). President Kaljulaid has been a vocal proponent of the development of e- government and increased cooperation between Nordic countries. Throughout her Presidency, Kaljulaid has travelled the world to speak about the benefits of e-government and encourage other countries to improve governance through technology (Kaljulaid, 2018). In June 2018, President Kaljulaid remarked:

We need to have all the Nordic circle countries connected to a single digital identity or at least have the ability to recognise digitally our digital signatures. We will strive to cooperate in this sphere and we are developing from e-Estonia to e-Nordic (Office of the President, 2018).

Leadership from Estonia’s Deputy Secretary General for Communications and State Information Systems, Siim Sikkut, and Finland’s Director General of Public Sector ICT, Anna- Maija Karjalainen, will be pivotal to the future direction and management of NIIS. Sikkut and Karjalainen are the sole representatives of NIIS’s highest body, the General Meeting (NIIS, 42

2017). In 2018, Sikkut was labelled as one of the top twenty ‘most influential people in digital governement’ (Apolitical, 2018) in the world. Additionally, the CEO of NIIS has an important leadership position to act as the intermediary between Estonia and Finland in creating collaboration (Interview1, 2018). The CEO must work as a ‘diplomat’ between the two countries to negotiate solutions and manage the organization (Interview1, 2018).

Strength and richness of incentives

Estonia and Finland’s collaboration on ICT development has been fuelled by political and economic incentives on both sides. However, Finland appears to have had the strongest incentives to collaborate. Finnish incentives for participating in collaboration included increasing their level of digitalisation (Interview4, 2018) and cutting costs by becoming more efficient after the Finnish company ‘ collapsed…and the hits [to the economy] came’ (Interview2, 2018). There has been a desire from the Finnish government to better integration their systems and upgrade technology (Interview5, 2018). Although Finland consistently ranked in the top ten countries for e-governance in Waseda University’s international digital government rankings from 2005-2013, in 2014 Estonia surpassed them in the rankings (Institute of Digital Government at Waseda University, 2014). Between 2014 and 2017, Estonia rose from 7th place to 5th place in the world rankings for e-government, while Finland from 8th place to 18th place in the rankings. (Institute of Digital Government at Waseda University, 2014; Institute of Digital Government at Waseda University, 2017). Collaboration has also been fuelled by their desires to rebuild their economy since the decline of Nokia. The company Nokia was created in Finland and was a big economic driver for the country during the nineties and early 2000s (Lane, 2016). However, Nokia began to lose its dominance in the market and sold its mobile phone business to Microsoft in 2014 (Ibid). Between 2014 and 2015 Finland’s (GDP) fell from 272 billion US dollars to 232 billion (, 2018). Their GDP gradually increased to 251 billion US dollars in 2017, but it is still below their 2014 GDP (World Bank, 2018).

The improvement of public services (Interview2, 2018; Ummelas and Pohjanpalo, 2018) and ‘practical ideas’ (Interview3, 2018) of sharing resources and talent (Interview3, 2018), were 43 incentives that existed within both the Estonian and Finnish governments pertaining to collaboration on connecting digital services (Interview2; Ummelas and Pohjanpalo, 2018). In an interview with a previous Estonian government official involved with the creation of NIIS, they remarked that the mantra of their office was ‘that the best is a service that you don't see’ (Interview2, 2018). Collaboration in connecting ICT systems and digitally sharing cross border data was viewed as a way for Estonia to improve their delivery of public services (Interview2, 2018). Estonia and Finland would often use paper forms to exchange data with one another prior to the creation of NIIS, even though they were each delivering a large percentage of their in-state public services digitally at the time (Interview2, 2018). Maria Nikkila, an information management advisor for the Finnish government, remarked that connecting information systems with Estonia is ‘… like driving a car: if the engine is running and the car is moving, no one cares about what happens under the hood’ (Ummelas and Pohjanpalo, 2018). Additionally, both Estonia and Finland struggle with access to talent and resources (Interview3, 2018). Collaboration gave them the opportunity to maximize their capacity.

Finally, incentives for Estonia to collaborate included decreasing spending on public services and ensuring the collection of tax dollars (Interview2, 2018). Estonia has committed a lot of time and resources to exchanging information with Finland on citizens who work in each other’s respective country (Interview2, 2018). Administrative issues, such as taxes and pensions, for who work in Finland or who work in Estonia require extra work since Estonia can not access or share that information through the X-Road (Interview2, 2018). The integration of Estonia and Finland’s information sharing systems would enable better record keeping for tax filing and decrease the cost of government administration (Interview2, 2018).

Power and resources

While Gray (1989) argued that an imbalance in power and resources between actors can be influential in bringing two organisations together to collaborate (Ansell and Gash, 2008), the MECII model contends that an equal distribution of power and resources is vital to creating collaboration (Navarrete et al, 2010). Estonia initially entered the relationship with Finland with a slight upper hand because they had already implemented the X-Road and were considered a 44 leader in e-government. Interviews revealed that the initiative to start collaboration on ICT development mainly came from Estonia (Interview1, 2018; Interview2, 2018). However, the equal status of Estonia and Finland within NIIS has contributed to their ability to collaborate (Interview3, 2018). There was a recognition within the Estonian government that both parties would be seen as equal once they entered into a collaborative partnership (Interview2, 2018). ‘Collaboration…means that both parties…are going to be equal, so that…we can show the initiative, but we can’t say “that is our X-road.”…All of us are going to own this.’ (Interview2, 2018).

After Estonia and Finland signed the 2013 Memorandum of Understanding to begin cooperation on ICT development, Estonia gave the X-road source code to Finland free of charge (Population Register Centre, 2016a). In creating NIIS, Estonia and Finland were given equal standing according within the rules of operation (Interview2, 2018; NIIS, 2017). Both Estonia and Finland pay the same amount of money towards the organisation and its projects, and have an equal vote in decision-making (NIIS, 2017). The staff members at NIIS are split between Estonians and Finns (Interview4, 2018). However, NIIS is registered and headquartered in Estonia.

V.2.2. Value Network Factors

Roles

NIIS considers itself a ‘network’ (NIIS, 2018b) that connects a range of organizations and partners (Figure 5, 2018; Interview4, 2018). The MECSII framework contends that multinational e-government collaboration ‘must be built by considering the different roles people involved in this network are playing’ (Navarrete et al, 2010: 5). Additionally, the enthusiasm of these groups to participate will be important to the network’s future success (Ibid). While the focus on the involvement of the public sector in creating collaboration was a key to Estonia’s success (Interview2, 2018; Interview3, 2018), NIIS has been slow to involve the private sector in the network (Interview2, 2018; Interview4, 2018). Additionally, several important roles identified by NIIS have not been active in the network. Figure 6 is an ecosystem value map of 45

NIIS’s collaboration project for the X-Road that details the broad span of roles played by different actors in the network. Within Estonian and Finnish collaboration for ICT development, NIIS has identified the following roles: NIIS organization, NIIS members, X-Road operators, user organizations, end users, and the X-Road Community.

Figure 6: NIIS, 2018j

Currently, NIIS is managed by three, full-time staff and one part time staff who are private employees hired by the organization’s management board (Interview4, 2018). The full time staff members are the CEO, Chief Technology Officer, and Project Manager (Interview1, 2018; Interview4, 2018). However, there are plans for the staff size of the organization to grow as they add new member countries and projects (Interview1, 2018; Interview4, 2018). While the main office is located in Tallinn, Estonia, one of the staff members is based in , Finland (Interview4, 2018). The staff split their time between both countries, which allows them to network with partners in both countries and maintain an understanding of the local issues and environments in both Estonia and Finland (Ibid). Additionally, the staff is comprised of both Finnish and Estonian employees (Ibid).

The NIIS members are the countries that belong to NIIS (Interview1, 2018). Currently, the only members are Estonia and Finland. Responses from interviews gave the impression that both governments are invested in the partnership and further collaboration (Interview2, 2018; Interview3, 2018). Both countries have also played the key roles in creating and managing NIIS (Interivew1, 2018; Interview2, 2018; Interview3, 2018; Interview4, 2018). The role of a NIIS 46 member state’s X-Road operator is filled by public or private actors who manage the X-Road operations for member countries (Figure 6, 2018). The operators of Estonia and Finland’s systems are members of NIIS’s advisory board and have been involved with collaboration from the beginning (Interview2, 2018; Interview4, 2018).

The role of a user organization consists of the public and private organizations that ‘use X-road to deliver services’ (Figure 6, 2018) to end users. User organizations were not involved in the creation of NIIS and do not have any formal capacity within the organization. It has been a challenge to encourage private companies to participate in collaboration (Interview1, 2018; Interview4, 2018) and adopt the X-Road because ‘the technology was developed a while ago and it is technically old fashioned’ (Interview1, 2018) by their standards. Additionally, it is a challenge to collaborate with lower level administrative offices because there does not seem to be an understanding of why collaboration is occurring and what needs to be done (Ibid).

End users are the individuals that access services from user organizations that utilise the X-road (Figure 6, 2018). End users have not had any involvement with collaboration and are currently not impacted by collaboration (Interview4, 2018). The X-Road has not begun to exchange any data as of yet, although Estonia and Finland’s systems are connected (Interview4, 2018). Finally, the X-Road is a community of X-road developers and users from around the world that can contain individuals from any of the roles within NIIS’s X-Road ecosystem (Ibid). The X-Road community does not have a formal role in collaboration and was not involved in initial collaboration, however they have been active in exchanging information and building relationships with NIIS staff members (Ibid).

Deliverables

Based off of value network theory (Allee, 2008), the MECII framework contends that the value of resources that will be generated through an e-government network impacts collaboration (Navarrete et al, 2012). Estonia and Finland’s collaboration on e-government arose from a need to have an institute that could act as both a ‘software vendor’ (Interview4, 2018) and ‘digital bridge’ (Interview4, 2018) for Estonia and Finland. As demonstrated by Figure 3, NIIS is meant 47 to have a tangible impact on the delivery of e-government services that stretches from the Estonian and Finnish national governments to the Estonian and Finnish citizens. NIIS is currently responsible for developing, distributing and maintaining the X-Road software that is utilised by the current member countries of Estonia and Finland (Figure 6, 2018). In turn, NIIS member countries work with their X-Road operators and public and private user organisations to deliver fast and easy digital services to end users (Figure 6, 2018). Currently, services are not available to end users (Interview4, 2018), but in the future they should be able to ‘consume digital services’ (Figure 6, 2018) that they require to pursue activities as private citizens. This includes, but is not limited to, filing taxes, filling pharmacy prescriptions, registering for marriage, and voting (e-estonia, 2018b).

At the same time, NIIS has a strong intangible impact for both Estonia and Finland. NIIS facilitates the exchange of knowledge, and strengthens relationships within and between Finland and Estonia (Interview4, 2018). In 2016, Finland’s President Niinisto remarked that ‘Finland has a lot to learn from Estonia’s e-governance efforts’ (Office of the President, 2016b: 1). Collaboration through NIIS allows that transfer of knowledge to occur. In the process of running the X-Road, member countries, X-Road operators and user organisations can each make recommendations to NIIS staff about improvements and changes to the X-road’s coding (Interview4, 2018: Figure 6, 2018). In addition to creating and managing software, NIIS builds relationships and acts as a facilitator of e-government (Interview4, 2018). NIIS works to ‘facilitate things in a wider scope and try to find possible areas of collaboration between Finland and Estonia’ (Interview4, 2018). As a result of their close relationships with actors in both Finland and Estonia, they have a high level of knowledge of the different projects occurring in both countries and can help to build ‘a digital bridge between the two countries’ (Inteview4, 2018).

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V.2.3. Cross-Border Factors

Distance

A new cross-border factor that appeared through interviews, and was not mentioned in the MECII framework, is distance (Interview4, 2018). Estonia and Finland’s ICT collaboration was enabled by their close proximity to one another (Ibid). The neighbouring countries of Finland and Estonia are located in the Baltics, separated only 82 kilometres by the Baltic Sea. The capital of each country lie adjacent to one another with Helsinki located on the southernmost tip of Finland, and Tallinn located on the northern most tip of Estonia. The locations of Estonia and Finland enable a one-and-a-half to two-hour ride between the two country’s capital cities (Nauwelaers, Maguire and Marsan, 2013). In hypothesizing how collaboration would work with a third country, an interview participant responded that it will likely be ‘very difficult to achieve the same with them, at least with those countries that are at a geographic distance is longer’ (Interview4, 2018).

Market forces and trade flows

Interviews and document review suggest that the constant flows of people and capital between Finland and Estonia have played a role in their creation of e-government collaboration (Interview2, 2018; Population Register Centre, 2016b). The MECII framework views strong flows of people and goods as an opportunity for collaboration on account of the relationships that form during these interactions (Navarrete et al, 2010). Going back to the early 2000s, a large number of Estonian citizens worked and consumed services in Finland (Interview2, 2018). Likewise, a large number of Finnish citizens worked and consumed services in Estonia (Interview2, 2018). As a result, there is a significant flow of tax dollars that flows in both directions across the border (Ibid). A 2013 report by the OECD concluded that Estonia and Finland are ‘increasingly connected’ (18) by flows of people, trade, and economic links. In 2011, it was reported that 300 to 400 million were generated by Estonians who work in Finland (Nauwelaers, Maguire and Marsan, 2013) With these strong flows, come both opportunities and challenges for Estonia and Finland to solve (Ibid). Finland’s X-Road manager stated that ‘given 49 the fact that both people and economy are tightly bound between Finland and Estonia, it is essential to align public services for cross-border cooperation – to provide better services for citizens and enterprises’ (Population Register Centre, 2016b: 1).

Culture of borderland communities

While cultural similarities are not considered a prerequisite for e-government collaboration, cultural similarities ease the process of collaboration (Navarrete et al, 2010). Estonia and Finland’s cultural similarities have been cited as an influential factor in encouraging collaboration on ICT development (Interview1, 2018; Interview2, 2018; Interview3, 2018). Although Estonia and Finland have different official languages, their languages share similar roots and there is the perception that they share the same values (Office of the President, 2016a), mindsets, and needs (Interview2, 2018). One interview participant remarked that they ‘feel very much a citizen of both sides of the bay’ (Interview1, 2018). In a 2013 OECD review of the Finnish and Estonian border regions, their culture was classified as being ‘somewhat similar’ (11). Both the Estonian and Finnish societies are descendants of the Finno-Urgic people and academic studies have shown that they share similar values (Alas and Tuulik, 2007).

V.2.4. Integration and Interoperability Factors

Constitutional/ legal

The constitutional and legal setups of Estonia and Finland have both aided and hindered the creation of collaboration on e-government. On the one hand, their similar political structures and shared e-government legislation created a friendly environment for collaboration (Republic of Estonia, 2016; OECD, 2015). Estonia and Finland share the same political structure, a (European Commission, 2015c; European Commission, 2016b). In both Estonia and Finland, legislative power rests with a unicameral Parliament and executive power rests with a President and their Government (European Commission, 2015c; European Commission, 2016b). Each country has a - the President - as well as a Head of Government - the Prime Minister (European Commission, 2015c; European Commission, 50

2016b). Estonia’s unicameral Parliament is referred to as the Parliament of Estonia, or in the , and has 101 officials who are elected by popular vote for four-year terms (European Commission, 2015c; Parliament of Estonia, 2018). The Estonian State is responsible for passing laws and electing the Estonian President for a term of five years (European Commission, 2015c). In addition to leading foreign affairs, the President is responsible for nominating a Prime Minister who will create and lead the Government at the approval of the State Assembly (Ibid). Finland’s unicameral Parliament is referred to as the eduskunta in Finnish and comprised of 200 elected officials (Ministry for Foreign Affairs of Finland, 2018). The Parliament elects the Prime Minister to run the Government and is responsible for passing laws (Ibid). The President is elected through a popular vote by the public (Ibid).

Leading up to collaboration, both Estonia and Finland had extensive legislation that created a legal framework for each country’s operation of e-Government. The countries are similar in that they both value citizens’ right to privacy and protection of personal data (Priisalu and Ottis, 2017; Finland Personal Data Act, 1999). In addition to complying with EU regulations, such as the 2016 General Data Protection Regulation (GDPR), Estonia and Finland each have Constitutions that guarantee citizens a right to privacy (, 1999; Constitution of the Republic of Estonia, 1992) and Personal Data Acts that protect individuals’ rights when their personal data is processed (Personal Data Act, 1999; Personal Data Protection Act, 2008). Furthermore, they each have , data protection and privacy, electronic signatures (e-signatures), electronic commerce (e-commerce), electronic communication (e-communication), electronic procurement (e-procurement), and re-use of public sector information legislation (European Commission, 2015c; European Commission, 2016b). However, while Finland has overall guiding e-Government legislation that outlines their strategy (European Commission, 2016b), Estonia does not (Rikk and Roosna, 2016).

At the same time as aiding them creating collaboration, Estonia and Finland’s various rules and regulations hindered collaboration. Estonia and Finland each have conflicting levels of legislation that have prevented them from engaging in cross-border information sharing, despite the fact that they have the technical capability to do so (Interview4, 2018; Interview5, 2018). As 51 a result, ‘the process…has been a lot more time consuming and challenging than expected’ (Interview4, 2018).

Jurisdictional

The authority of the participants involved in negotiations also facilitated e-government collaboration between Estonia and Finland. The MECII framework explains jurisdictional capacity as the extent to which participants can impose e-government integration within and between their countries (Navarrete et al, 2010). Typically, collaboration can fail to materialise because participation in integration is non-compulsory (Ibid). Although the Estonian and Finnish governments cannot impose the X-Road on the private sector (Interview1, 2018; Interview4, 2018), they have the ability to implement the core infrastructure for e-government across their national governments (Riik and Roosna, 2016; Interview5, 2018). Membership in NIIS’s General Meeting is dependent upon an individual having the ‘power to implement the core e-Government infrastructure components directly or indirectly within a member country in public interest’ (NIIS, 2017: 2).

Informational

Based upon Dawe’s theory on information sharing between agencies (1996), the MECII framework contends that an organisation’s unwillingness to fully disclose their strategies and vital information for e-government can create a barrier to collaboration (Navarrete et al, 2012). Estonia’s willingness to be completely transparent with Finland in sharing their knowledge on e- government and citizen’s information can partly explain the emergence of collaboration. Estonia was willing to give their X-road source code to Finland free of charge from the start of cooperation (Interview4, 2018). The Estonian government is open to sharing information on how they have grown their e-government as a model for other countries (e-estonia, 2018b). Estonia’s government website details their process for achieving optimal e-government (Ibid) and the country’s e-Governance hosts officials from around the world who would like help with e-governance (E-Governance Academy, 2018). Additionally, both the Estonian and Finnish 52 governments have been open in their desire to be able to exchange information with one another through collaboration on the development of ICT (Interview3, 2018; Interview5, 2018).

Cost

The high cost of an information systems project can often be a barrier to integration between two actors (Scholl and Klischewski, 2007). However, in the case of Estonia and Finland, the benefits for collaboration exceeded the participation costs. Instead of independently having to pay for the development of e-government systems, Estonia and Finland’s collaboration allowed them to jointly fund projects and save on costs (Aasmae, 2013). Initially, there was a concern from the Finnish government that independently implementing Estonia’s X-Road code would be expensive, since they would have to independently tailor Estonia’s secure system to their ICT environment (Interview2, 2018). However, a collaborative effort to jointly redevelop a new version of the X-Road was an amenable solution to Finland for cutting costs and coming to the table (Interview2, 2018). Another interview participant insisted that there were never any big objections during budget talks, because there was the mutual feeling from both parties that ‘we should be doing this’ (Interview3, 2018).

Currently, NIIS operates from a yearly budget of 1,841,000 Euros and only receives funding from its two member countries, Estonia and Finland (NIIS, 2018a). Member countries are required to pay a yearly fee of 920,500 Euros, in the form of a lump sum, to fund the operation of the network and its projects. However, the organization’s Articles of Confederation permits the use of additional funding streams (NIIS, 2017). The General Meeting of NIIS has the ability to change membership fees each year (NIIS, 2017). While the initial costs for participation in NIIS were agreed to by both Estonia and Finland (NIIS, 2018a), the funding might not be enough to cover the current X-road project (Interview1, 2018). The X-Road needs a numerous development changes in the years ahead and the budget may limit the amount of changes that can be made (Interview1, 2018).

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Technological

Estonia and Finland’s high level of technological development played a role in facilitating collaboration on the cross-border development of ICT technology. The perception from interview participants was that Estonia and Finland were ‘similarly developed’ in technology leading up to the creation of NIIS (Interview2, 2018). Both the Estonian and Finnish governments utilized technology to deliver innovative solutions for public problems prior to the development of NIIS (OECD, 2011; OECD, 2015). Estonia’s electronic-Estonia programme, known as e-Estonia, strives to create a digital society where citizens can access services digitally, instantaneously, and inconspicuously (e-estonia, 2018b). Today, 99 percent of Estonia’s government services (e-estonia, 2018b) are provided digitally. Prior to the development of NIIS, Estonians and Finns were already well about average within OECD countries in their digital contact with the government. In 2015, 71 percent of Estonians and 58 percent of Finns sent their public forms to government authorities via the internet, while the average rate for EU countries was only 26 percent (Eurostat, 2018b). Citizens in Finland and Estonia are also provided with a national ID card that is embedded with a microchip to verify their identity in both physical and digital environments (Rikk and Roosna, 2016). The ID card enables them to access government services through the internet. Estonians are able to vote, file taxes within three to five minutes, access their personal medical records and prescriptions, and gain access to their public records through their personal digital devices (e-estonia, 2018b).

While Finland has traditionally been renown for their ICT development (OECD, 2015: 196), Estonia’s digital rise did not occur until they gained independence from Russia in 1989 (OECD, 2011). However, over the past ten years Estonian programmes have made international headlines for their creation of new initiatives that infuse technology into governance. Three notable projects include Estonia’s e-residency, data embassy, and the X-road programmes. Estonia’s electronic-residency (e-residency) programme is the world’s first ‘supranational e- Residency scheme’ (Rikk and Roosna, 2016: 30). The programme allows individuals from around the world to apply for an Estonian ID card and gain access to Estonia’s electronic service benefits, such as utilizing Estonia’s electronic banking system and creating a new company. However, e-residents do not receive citizenship or residency from this programme (Ibid). 54

Estonia’s data embassy initiative was created to provide a backup for their electronic governance system in the event that the country experiences a crisis (Estonian Ministry of Economic Affairs and Communications, 2013). In 2017, Estonia signed a bi-lateral agreement with to store a copy of Estonian data and information systems within a ‘virtual embassy’ in Luxembourg (Estonian Ministry of Economic Affairs and Communications, 2013; E-estonia, 2017).

Despite both Estonia and Finland’s high levels of technology, it has been suggested that the decision to create collaboration and implement the X-Road was not based on the technical compatibility and superiority of the X-Road, but a political decision (Interview4, 2018). Prior to making the commitment to implement X-Road in Finland, there was ‘no requirement analysis…[or a] comparison of different products’ by Finland (Interview4, 2018). The technology was not properly evaluated by Finland or analysed for ‘how well it actually fits in the Finnish IT (information and technology) infrastructure’ (Interview4, 2018).

Performance

The successful performance of Estonia’s X-Road system over the past ten years was viewed as influential in motivating Finland to collaborate with Estonia to adopt the same system (Interview4, 2018). Finland has observed Estonia benefit from the X-Road over a long period of time (Ibid) and recover from the attempted 2007 cyber attack from Russia (Rikk and Roosna, 2016). In 2007, Estonia experienced a large-scale cyber-attack from Russia. Russia was able to block Estonians from using the internet and government websites (Tamkin, 2017). Despite these attacks, Estonia has continued to grow more advanced in e-government (Institute of Digital Government at Waseda University 2014; Institute of Digital Government at Waseda University, 2017). Estonia claims that it was able to emerge from the cyber-attack with limited damage (Rikk and Roosna, 2016) and has chosen to strengthen their commitment to e-government since the attack, rather than back away from it.

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VI. Conclusion

VI.1. Contribution to the literature

This paper sought to explain the phenomenon of multinational e-government collaboration between Estonia and Finland, and answer the question: what factors explain the emergence of collaboration between Estonia and Finland for the joint development of ICT and electronic government solutions? As revealed in the literature review, e-government scholars were traditionally divided on whether e-government integration and collaboration occurs as a result of technical factors or a mixture of technical and non-technical factors (Scholl et al, 2012). Recent multinational e-government collaboration literature has hypothesized that collaboration occurs as a result of both technical and non-technical factors, but can not reach a consensus on the types of non-technical factors (Navarrete et al, 2010; Romano, Pick and Roztocki, 2010). My hypothesis was that Estonia and Finland’s collaboration on ICT development has emerged from an environment of favourable technical and non-technical factors, to include cross-border, value network, collaboration, and integration and interoperability. I chose to utilise the ‘Multinational e-government collaboration, information sharing and interoperability’ (Navarrete et al, 2010: 7) framework for its flexible design and comprehensive variety of hypothetical factors.

VI.2. Key findings

An application of the ‘Multinational e-government collaboration, information sharing and interoperability’ (Navarrete et al, 2010: 7) framework to the case of Estonia and Finland’s joint- development of ICT and e-government, confirms my hypothesis that collaboration can be explained by both technical and non-technical factors. Additionally, my case study established that cross-border, value network, collaboration, and integration and interoperability factors each attributed to the emergence of multinational e-government collaboration between Estonia and Finland. Figure 7 summarises the specific factors that were revealed through the case study.

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Figure 7: Factors that explain the emergence of multinational collaboration on ICT development and e-government between Estonia and Finland Collaboration Factors • A limited number of core participants from the national level

• A high level of trust from a history of positive cooperation • A rule based, legitimate institutional design for collaboration • Facilitative leaders • Practical and political incentives • Equal status in collaboration Value Network Factors • Consideration for the different roles needed to create collaboration and e-government integration • The need for an independent institute that could act as both a software vendor and digital bridge Cross-border Factors • Close proximity • High cross-border flows of people and capital • A shared culture Interoperability Factors • Similar political structures and e-government friendly legislation • Authority of core participants to implement e- government • Willingness to share and disclose information • High and similar levels of technological development • The X-Road’s history of positive performance

Within the category of collaboration factors, research revealed that the variety of participants, initial disposition, leadership, institutional design, incentives, and power and resources influenced collaboration. Pursuant with collaborative governance theory (Ansell and Gash, 2012) and inter-organizational cooperation theory (Faerman, McCafffrey and Slyke, 2001), Estonia and Finland’s joint-development of ICT emerged from an environment that was hospitable to the formation of collaboration. The conditions, institutional design and leadership were aligned to bring trust and legitimacy to the process of collaboration (Ansell and Gash, 2012). E-government collaboration between Estonia and Finland also emerged due to the value that the organisation of NIIS could bring to the two countries. The case study revealed the importance of roles and deliverables. NIIS plays the role of a digital bridge between the Estonia and Finland. Its network structure incorporates the different roles needed to create e-government collaboration, although involvement is still lacking from the private sector. 57

While Navarrete, Gil-Garcia, Mellouli, Pardo and Scholl hypothesized that cross-border factors were the least necessary in creating e-government collaboration (2010), they have played a role in the case of Finland and Estonia. The distance, market forces and trade flows, and culture of the borderland communities each contributed to collaboration. While distance was not initially identified as a cross-border factor (Navarrete et al, 2010), it emerged during research. The cross- border factor of ‘political clout’ did not appear during my research. Finally, integration and interoperability factors contributed to multinational e-government collaboration in this case. In particular, jurisdictional, informational, technological, cost, performance and constitutional/legal factors played a role. However, I did not find evidence that organizational or managerial factors played a role.

VI.3. Implications and future research

Estonia and Finland’s collaboration on cross-border ICT development can serve as an example to the European Union’s Digital Single Market initiative as well as other nations interested in collaborating on e-government. Estonia and Finland appear to be using e- government to maximise their limited amounts of resources and grow their capacity. E- government and cross-border information sharing have the potential to elevate the status and capabilities of other countries. However, it remains to be seen if the Estonian and Finnish model can be replicated. This study helps to illuminate the contributing factors that led to the development of multi-national e-government collaboration between Finland and Estonia.

Collaboration between Estonia and Finland through the Nordic Institute for Interoperability Solutions is still evolving. While Estonia and Finland have been able to connect their X-, they have not yet engaged in information sharing. Further research is warranted to examine the success of Estonia and Finland’s collaboration, as well as the barriers that are preventing them for exchanging data. Additionally, NIIS is in the process of looking for new countries to join the institution and adopt the X-Road. The addition of a new member country has the potential to change the dynamics and success of collaboration and reveal new factors about the nature of multinational e-government collaboration. This is an area for academics to 58 observe in the future. Finally, a theme that appeared throughout interviews with Estonians and Finns involved in multinational e-government collaboration is that technology is not the barrier to collaboration and cross-border information sharing; government is the barrier. Future studies are needed to investigate how nations can better overcome their legislative barriers to e- government interoperability across borders.

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VII. References

Aasmae, K. (2013) ‘How international IT harmony can start with just a bit of middleware’, ZD Net [online]. Available from: https://www.zdnet.com/article/how-international-it- harmony-can-start-with-just-a-bit-of-middleware/ [Accessed 21 June 2018].

Alas and Tuulik (2007) ‘Cultural practices and values at the societal level in Estonia in comparison with neighbouring countries’, Journal of Business Economics and Management [online], 8 (1), 39-44. Available from: https://doi.org/10.1080/16111699.2007.9636150 [Accessed 21 August 2018].

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VIII. Appendix

Appendix I: Codebook

1. Initial disposition 2. Number and variety of participants 3. Facilitative Leadership 4. Institutional design 5. Incentives 6. Power and resources 7. Roles 8. Transactions 9. Deliverables 10. Jurisdictional 11. Collaborative 12. Organizational 13. Informational 14. Managerial 15. Cost 16. Performance 17. Constitutional/Legal 18. Technological 19. Market Forces and Trade Flows 20. Policy activities of multiple levels of governments 21. Political clout of borderland communities 22. Culture of borderland communities

Appendix II: Sample Interview Questions

1. Tell me about the role you played in the development and delivery of cross-border collaboration on ICT development between Estonia and Finland 2. Who were the main actors involved in coordinating Estonia and Finland's cooperation on information and communications technology (ICT)? 3. What types of motivations or interests did actors have in this collaboration? (Why did politicians decide to collaborate?) a. From Estonia b. From Finland 4. What is unique about Finland and Estonia that has enabled them to engage in this cross- border cooperation, compared to other countries? 5. What role, if any, has the EU played in this collaboration? 6. What were the rationales or ideas for different actors in creating collaboration on ICT between Estonia and Finland? 7. What different visions for the collaboration and governance of it were put forth? What was the vision from Estonia and what was the vision from Finland? 73

8. How was the governance of cooperation actually designed? 9. What were the main rationales behind the design of cooperation that was created? 10. Who are the main actors involved in governing Estonia and Finland's cooperation on ICT now? 11. How involved is the private sector in cross-border collaboration on ICT development? 12. How involved should the private tech sector be in the collaboration? 13. What have been the main barriers to cooperation? 14. While the Nordic Institute for Interoperability Solutions currently only focuses on cooperation between Estonia and Finland, the bilaws have left room for additional countries to join. Do you think that this is realistic? a. What types of challenges/benefits would this bring? b. Is there a push for additional countries to join? 15. How would you describe NIIS and it’s role? 16. Is NIIS supposed to collaborate on entire spectrum of cross border ICT collaboration, or just the X road? 17. How have Estonian and Finnish societies reacted to this collaboration? 18. What improvements/changes would you make to how cooperation is taking place? 19. While it is still early, how successful have the two countries been in their cooperation? 20. Is cooperation mostly focused on the XRoad? What other opportunities for ICT collaboration between the two countries are being discussed?

Appendix III: Interview Participants

Interview1 – Finland Interview2 - Estonia Interview3 – Estonia Interview4 - Finland Interview5 – Finland