The article is devoted to the understanding of digital government transformation (DGT) as key to improving public administration and governance. The paper complements the debate regarding DGT rationale in public administration, providing theoretical and empirical analysis of its socio-economic impact and performance in governance. The empirical part is based on two regression analyses exploring indicators of DGT and public administration performance. The article concludes that (1) DGT is understood as innovation, but innovation in the public sector is also commonly associated with DGT, (2) this innovation helps to reshape the governance to match the society’s needs, (3) the policy-based approach to DGT is not enough explanation of its rationale and efficiency, and (4) there are certain improvements in the socio-economic sphere that are related to DGT and thus help one understand its meaning for the contemporary world.