How blockchain can help dismantle corruption in government services

-Blockchain could increase the fairness and efficiency of government systems, while reducing opportunities for corruption;

-Blockchain could improve the transparency and disclosure of procurement processes, investment in which can be lost to corruption;

-The emerging technology can also enhance property and land registry systems, streamlining lengthy processes and protecting people’s rights.

Governments regularly have to make trade-offs between efficiency and fairness in their services. Unfortunately, choosing one over the other often increases the likelihood of corruption. In efficient systems, the public is largely content to operate within the bounds of that system; inefficient systems cause large numbers of individuals to seek less-than-legal workarounds. Similarly, fair systems engender trust, pride and a sense of community; while unfair systems encourage individuals to seek out illegal alternatives without remorse.

Occasionally, new technologies come along that offer the opportunity to increase both efficiency and fairness. Blockchain is one such opportunity and it has a variety of use-cases for government applications. Here are two in more detail:

Blockchain and procurement

Public procurement is the process of governments acquiring goods, services and works. It represents a significant portion of governmental budgets, accounting for 29% of general government expenditure totalling €4.2 trillion in OECD countries in 2013. With so much money at stake, it is unsurprising that OECD estimates 10-30% of the investment in publicly funded construction projects may be lost to corruption.

Public procurement is vulnerable to corruption for a number of reasons. Parties in the procurement process, both on the public and private sides, are induced into corrupt acts by the size of potential financial gains, the close interaction between public officials and business, and how easy it is to hide corrupt actions. Blockchain has the potential to protect against these weaknesses at almost every stage of the procurement process.

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