An Application of DEA to Assess the Digital Development of Russia and the EU-28

Abstract

Our main research questions relate to the measurement of digital development and the stability of country rankings in the International Digital Economy and Society Index (I-DESI 2018), published biennially by the European Commission, focusing on Russia and Hungary as specific examples. We apply Data Envelopment Analysis (DEA) models and Multidimensional Scaling (MDS) to rank our Decision Making Units (DMUs), i.e.~the countries, and compare our results with the ranking obtained with the pre-defined scoring model of I-DESI. Besides the basic DEA approach, we also investigate the applicability of the DEA Common Weights Analysis method. The main purpose of I-DESI is to mirror and extend the results of the European Commission's EU-only Digital Economy and Society Index, measuring the digital economy performance of the Member States and the EU as a whole in comparison with selected non-EU countries. Both composite indices use a scoring model, combining a (similar though not identical) set of individual indicators and using a pre-defined weighting system to rank countries based on their digital performance with the aim to benchmarking the development of the digital economy and society. They measure performance in five principal dimensions or policy areas: connectivity, human capital (digital skills), use of Internet by citizens, integration of technology and digital public services.