AI and blockchain adoption in the public sector: evidence on innovation capacity and institutional context

This paper examines whether artificial intelligence (AI) and blockchain follow similar adoption dynamics in the public sector. While both technologies are associated with digital transformation, their diffusion may depend on technological, economic, and institutional conditions. Using an inventory of public-sector technology innovation initiatives (CEU. JRC. 2022. European Landscape on the Use of Blockchain Technology by the Public Sector. Publications Office. https:// data.europa.eu/doi/10.2760/18007), the study combines cluster analysis with cross-country regressions to compare the drivers of AI and blockchain adoption. The analysis focuses on countries’ technological knowledge base, private R&D intensity, and public administration expenditure. The results indicate that AI adoption is associated with private R&D investment and public-sector expenditure, while blockchain adoption is less responsive to public-sector funding and more associated with institutional conditions. Interaction effects suggest that AI and blockchain are complementary at moderate levels of innovation capacity but display substitution patterns in highly innovative environments. The paper contributes to research on technology adoption in the public-sector by showing that AI and blockchain do not diffuse in a uniform way. The findings suggest that the two technologies follow distinct adoption trajectories consistent with the distinction between AI as a general-purpose technology and blockchain as an institutional technology, with implications for the design of differentiated publicsector digital strategies.