Digital Red Tape in Public Organizations: Challenges to Sustainable Digital Transformation

Digital transformation is expected to improve the sustainability, efficiency, and transparency of public organizations. Yet, it also entails unintended consequences by generating digital red tape, defined as dysfunctional rules that impose compliance burdens through their integration with digital technologies. This study examines how organizational structure shapes the emergence of digital red tape and how these patterns affect the sustainability of digital transformation. Using two-wave survey data from public employees, digital red tape was measured as digital compliance burden and digital functionality deficiency, while formalization and centralization captured key structural dimensions. Group comparisons were conducted to assess differences in digital red tape and its two dimensions across demographic and organizational categories, followed by robust OLS regressions estimated for upper, middle, and lower bureaucratic echelons. The results show that younger employees and those in lower-echelon organizations perceive higher levels of digital red tape. Across the full sample, both formalization and centralization are positively and significantly associated with digital red tape, with centralization displaying the strongest and most consistent relationships. Echelon-specific regressions further indicate that these structural associations vary in magnitude across hierarchical levels. Centralization remains positively related to digital red tape in all echelons, while the association between formalization and digital red tape appears most pronounced in the middle echelon. Ultimately, sustainable digital transformation requires recognizing both the existence of digital red tape and the ways in which organizational structures shape its emergence and distribution, potentially constraining organizational innovation and diminishing public value.