This paper proposes a two-dimensional lens to examine government capacity in developing countries. In addition to the conventional approach of assessing policies and institutions to examine government capacity, we propose that the development of e-government services should be a second axis of analysis in the current informatized world. Clustering analysis is implemented to examine how certain policies and institutions, along with the development of e-government services, are related to human development outcomes. The results showed a positive and significant relationship, and the particular importance of e-government was discovered. We use the Markov chain model to examine countries' transition patterns and to forecast future transitions. Our findings underline the importance of this two-dimensional approach, and the harmonious incorporation of traditional and novel approaches seems ideal to achieve development in a more effective and efficient way, ultimately leading to United Nations Sustainable Development Goals. This study can provide insights for policy makers in corresponding countries and international organizations to use in estimating transition patterns and the future direction of governmental excellence and in planning and strategy development. In particular, the proposed method for analyzing developing countries from the macro perspective may help guide international organizations to set up development strategies now in preparation for the time post-Millennium Development Goals. (C) 2017 Elsevier Inc. All rights reserved.