This paper looks into ethics and algorithmic governance in the digital era, with a focus on the risks and opportunities associated with the digitalization of public services. As governments increasingly adopt digital technologies to deliver administrative services, including artificial intelligence (AI)-driven tools, new challenges emerge regarding the protection of fundamental rights, transparency, and inclusion. The purpose of this study is to examine how digital transformation affects human rights, particularly in developing democracies, and what regulatory responses are needed to ensure that innovation does not undermine individual freedoms. The analysis adopts a qualitative and interdisciplinary approach, combining legal review, policy analysis, and illustrative case studies. International instruments such as UNESCO’s AI Ethics Recommendation, the EU’s Artificial Intelligence Act, and the Council of Europe’s Framework Convention on AI are reviewed and compared with national initiatives. Albania is used as a case study to illustrate the rapid digitalization of public administration. The country has transitioned to a fully electronic model for public service delivery, with 95% of services now offered online. However, the study finds significant legal and ethical gaps, including a lack of binding rules on algorithmic transparency, accountability, and anti-discrimination safeguards. Vulnerable groups face barriers in accessing digital services due to limited digital literacy and absence of alternative access options. The discussion highlights the urgent need for a rights-based digital governance framework that integrates ethical safeguards from the outset.