Leveraging e-government development to improve all aspects of governance has become a shared vision of governments in the digital age. However, the internal mechanism for e-government development to promote governance is ambiguous, and the extent to which e-government affects governance remains uncertain. Drawing on public value theory, this study analyzes the internal mechanism behind global e-government promoting governance improvement. To determine the realistic effects of e-government in governance improvement, empirical test included 170 countries and covered observations from 2010 to 2018. Results of the linear panel data analysis showed that the development of e-government promoted governance improvement as a whole. Specifically, the effects of e-government on different dimensions of governance were heterogeneous: E-government performs strong positive effects on the four governance dimensions of voice and accountability, government effectiveness, regulatory quality and rule of law, but relatively weak effects on political stability and absence of violence/terrorism and the control of corruption. These results indicate a certain gap remains between the vision and the reality of using e-government to comprehensively improve governance. This study provided insights into the future trends and priorities of global e-government.