Digital Public Infrastructure is the New Global Tech Bet—But Everyone’s Betting on Something Different

Governments are betting big on digital public infrastructure (DPI). Whether it’s identity, payments, data exchange, or other shared functions essential for the functioning of the state and society, software is the new infrastructure. While this view is gaining traction, there is surprising divergence on why. DPI came to prominence as a path to economic development. More recently, it has been discussed as a tool to fight Big Tech. The reality is even more complex: the DPI approach does not serve a single purpose. In conversations with senior officials and policymakers around the world, we’ve identified at least five distinct visions driving adoption. Understanding a country’s goals can help unpack its position and reveal the tradeoffs it’s willing to make.

The term DPI was popularized during India’s G20 presidency, though the concept had been implemented for decades. India framed DPI as a tool for achieving development goals, a message echoed by the United Nations Development Program (UNDP) report outlining DPI use cases for the UN’s Sustainable Development Goals, launched as a G20 product. That framing helped rally development actors, including the World Bank's ID4D program, and philanthropic funders for DPI projects, including Co-Develop and the Gates Foundation.

But India’s DPI story was never just about development. Aadhaar, India’s digital ID, was also built to reduce leakages in welfare spending. As its architects explain, the government feared a substantial portion of welfare benefits was being lost to fraud and corruption. An identity system that would uniquely identify individuals was paramount to prevent fraud and improve the targeting of social benefits. Fiscal efficiency—not just development—was a driving force.

And India isn’t alone. Across countries and regions, DPI investments are driven by different—and sometimes conflicting—policy goals. In mapping DPI in 210 countries and interviewing policymakers for case studies and academic research, we’ve identified five distinct objectives shaping the DPI agenda.

The Five Different Drivers and Tradeoffs for DPI Investment and Deployment

Depending on national priorities, DPI can serve radically different purposes. In our experience documenting and analyzing international cases, we identify at least five core motivations driving DPI adoption:

1. Fiscal resilience: By integrating digital systems, governments can reduce wasteful spending, eliminate duplicated IT investments, prevent fraud in welfare programs, reduce the number of human intermediaries in operations, and improve tax collection efforts. Fiscal efficiency was a major driver for Estonia's data exchange system, X-Road, and e-identity. In the late 1990s and early 2000s, the country faced significant fiscal challenges post-independence. This fostered the conditions for an unorthodox solution to reduce government costs: shared registries that radically reduced duplication. Today, Estonians claim 2% of GDP in savings with the use of digital signatures, and one government official has presented a 40% reduction in human intermediaries for public services at the IMF Annual Meetings last October. One danger is that efficiency doesn’t always lead to savings—it can actually increase costs. For example, a more efficient data exchange may induce more data to be shared, creating more public value but driving up transactions and, ultimately, costs. Conversely, DPI that lowers the cost of accessing services may drive up demand—fostering inclusion but also increasing costs. Also, if governments only measure DPI success in terms of fraud prevention or IT savings, they may miss opportunities to use the same systems for proactive outreach, empowerment, or economic enablement.
2. Public services: DPI can help governments deliver services faster and more effectively—reducing administrative burdens, connecting siloed systems, and improving how people interact with the state. In high-trust environments, it can drive inclusion by helping connect data across departments to better identify individuals in need and proactively reach out to notify them about benefits. This expanded state capacity has proved particularly useful during crises, when DPI components can be quickly repurposed to establish new services or benefits. A 2019 World Bank report found that during COVID-19, countries with interoperable public data systems reached three times more people with emergency aid than those without them. But data integration isn’t a magic bullet. Underlying policies that enable trust and safety are essential. And better user experiences also require other capabilities, like service design and user testing.
3. Economic development: In some countries, DPI has been associated with a potential for more inclusive economies. For example, it could enable financial inclusion by lowering transaction costs and simplifying identity verification (know your customer) processes for compliance. There is also increasing interest in using DPI for international economic integration. The Mercosur Digital Citizen initiative is one example of enabling access to services across five South American countries. Brazil and Uruguay are already integrated. As of November 2024, Brazil’s digital authentication was connected to 39 digital services in Uruguay, most of which simplify bureaucratic processes for businesses. But development isn’t automatic. DPI must be paired with well-implemented policies to translate potential into real outcomes. One often-cited example is the claim that Aadhaar significantly increased banking penetration in India. But the digital ID alone wasn't sufficient. Its impact came from integrating other key initiatives: an electronic Know Your Customer (eKYC) system, the Pradhan Mantri Jan-Dhan Yojana (PMJDY) financial inclusion policy, and a direct benefit transfer program that leveraged Aadhaar. Together, these elements created a more enabling environment for financial inclusion.
4. National sovereignty: Some governments are increasingly concerned about who controls the key layers of their technology stacks that underpin both the government and their economies. The argument for sovereignty over DPI is often driven by a desire to avoid over-reliance on foreign-owned companies for essential digital services, such as cloud hosting, digital payments, and identity verification. Governments worry that dependency on external providers could lead to vendor lock-in, geopolitical vulnerabilities, or the loss of strategic autonomy in key sectors. And there is reason to worry. Economist Cristina Caffarra argues that hyperscalers are increasingly offering “sovereign solutions” as a way to entrench their power—turning sovereignty into just another feature of a platform package. In response, she and others in the European Union advocate for a “EuroStack,” focused on asserting sovereignty across the tech stack—including shared software infrastructure. But sovereignty often comes at a price. Building sovereign technological stacks is expensive. Other EuroStack proponents call for a €300 billion investment, of which a small but still significant €10 billion would be dedicated to a European Technological Sovereignty Fund—resources that could otherwise support other policy objectives. In the long run, creating separate standards and excluding global providers would raise costs and slow innovation.
5. Competition and rent extraction: Some governments worry that current digital markets are overly concentrated, dominated by a few large platforms that control key infrastructures and extract excessive rents. They hope to level the playing field by introducing shared digital components as standards that commoditize existing services and make it easier for new entrants, such as fintech startups, e-commerce platforms, or local service providers, to compete atop the infrastructure. Operating as a standard, DPI can reduce barriers to entry by lowering the cost of compliance (e.g., cheaper identity verification through digital ID systems) or enabling interoperability in key services (e.g., open banking APIs). Brazil's instant payment system, PIX, is a successful example. A study by Sergey Sarkisyan found that PIX was associated with more competition in the deposit market, primarily because households opened relatively more deposit accounts at smaller banks than at larger banks. However, the effectiveness of DPI in fostering competition depends on how it is designed. While it can open markets, it can also reinforce the dominance of incumbents if they capture the new digital layers. Here, India’s UPI offers a more cautionary tale. While barriers to entry for payment apps built on top of UPI have, in theory, been reduced, the market remains dominated by two firms: PhonePe's share of UPI payments, standing at 47.8%, and Google Pay's at 37% in November 2024. DPI isn’t automatically pro-competition. If incumbents shape their design—or capture new shared layers—it can entrench dominance, not break it.

What are the implications of the different drivers?

These five objectives aren’t mutually exclusive, and many DPI efforts reflect several goals. As previously mentioned, Aadhaar had multiple drivers, as did Brazil's PIX. Interviews we conducted have made it clear that while competition in the payments market was a goal, Brazil's Central Bank’s primary motivation was fiscal efficiency, specifically, reducing reliance on paper-based transactions. Our list of five is not exhaustive—they're the most commonly observed patterns. Other drivers—such as environmental sustainability or national security—may become more prominent over time.

But DPI can’t optimize for everything at once. Policymakers must recognize that different goals come with trade-offs—and sometimes those goals can pull in opposite directions. Prioritizing sovereignty, for instance, often requires significant public investment. Focusing on efficiency, on the other hand, may lead governments to outsource core infrastructure—raising concerns about over-reliance on private actors, or neglecting values like inclusion, transparency, or public control.

But the biggest risk is assuming that DPI systems are “neutral.” Like any form of infrastructure, they are embedded with political and administrative choices—even when those choices are implicit or imported. Outcomes don’t flow automatically from technical design. They depend on how DPI is governed, which use cases are prioritized, and what policy frameworks surround it.

If governments fail to state clear intentions, they risk public backlash. When the Jamaican government did not outline a clear purpose or use case for its digital ID the public was left to speculate about its 'true' purpose—undermining trust in the project. Worse, when DPI is framed in purely technical or neutral terms, it creates space for capture by existing power structures. For example, some technology companies are starting to position themselves as DPI enablers and supporting global DPI events. While private-sector cooperation is likely needed and welcome, governments must be clear-eyed about who stands to gain and under what terms. Without that clarity, the DPI agenda risks becoming an empty vessel—defined not by national priorities but by whoever fills the void first.

Finally, as governments seek to partner, re-use and create standards around DPI, they must understand the goals and motivations of other countries. Just because countries use similar language doesn’t mean they share the same goals. This isn’t to say that countries seeking to adopt DPI for different reasons can’t cooperate, but misunderstandings will be reduced and opportunities to collaborate will be enhanced if everyone has a clear understanding of what other countries are seeking to achieve.

In short

DPI’s ability to serve many purposes is both its greatest strength—and its most significant vulnerability. If governments don’t clearly define what they want DPI to achieve, they risk wasting public resources, importing policy objectives by default, or failing to build the governance structures needed for success.

If some still see DPI as an Indian or Global Majority–only agenda, South Africa’s G20 presidency in 2025 offers a rare opportunity to shift the conversation. Not by enforcing a single global model, but by making space for a deeper recognition: DPI’s goals are political choices. The agenda can serve every country—but only if it’s owned, debated, and governed with intent.