Digital transformation readiness: Evaluating Dutch municipalities' compliance with the AI Act

The AI Act, effective from August 1, 2024, introduces EU-wide standards to ensure the ethical and safe use of artificial intelligence (AI). Dutch municipalities must be fully compliant by 2026, navigating complex legal and operational challenges. This study assesses their readiness through survey data and interviews with municipal representatives. Although awareness of the Act is high, significant gaps remain between regulatory knowledge and implementation. Municipalities face issues such as limited legal capacity, uneven digital transformation, and ethical uncertainty—resulting in fragmented AI governance. While compliance frameworks are emerging, most approaches remain reactive. This study identifies key barriers and recommends measures to strengthen AI literacy, clarify regulations, and improve ethical oversight. A coordinated national strategy is essential to align local governance with policy goals. Drawing on theories of symbolic versus substantive compliance, policy-implementation gaps, and regulatory adaptation, the study contextualises the findings and calls for further research on best practices, intergovernmental collaboration, and long-term governance strategies.