Blockchain based Govtech: Are Donor Funded Pilot Projects a Way Forward?

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Choose your government and choose your services, is the idea behind placing the nation-state on the Blockchain. Try to imagine borderless, decentralized, opt-in Blockchain-based governance services. The advantages for delivery of such services is transparency of the process, irreversibility, immutability and data consistency. Govtech aims to promote the use of cutting edge technologies to transform the public sector, increase its efficiency, accountability and improve service delivery to citizens and businesses. While relatively a new term and with no settled definition, in this article Govtech will be used to refer to Government based IT infrastructure and e-governance tools. 

Blockchain based Govtech will change not only the existing business process of how the government is implementing public services, but will promote innovative business models and tools for efficient public management and administration, such as public-private partnerships (PPPs) and others.  

The possibilities of utilizing Blockchain in public services or public administration are vast. It can be used for global climate action, by synthesizing transactions of all types of emission related data in a shared, globally accessible environment, an interesting option for the state parties to the Paris Agreement; it can improve the traditional billing and payment systems; decentralized ledger can be an efficient solution for keeping records, for example when tax or customs related transactions can be “registered” automatically in a digital ledger without any cumbersome paperwork. Government reports, legislative acts, court decisions and registries can all be placed on the Blockchain. Doing so would increase the speed of processes. Blockchain can be expended to Identification and digital IDs, education, healthcare, transportation, procurement and supply channels and other fields. It will entirely minimize the need for paperwork, ease the bureaucracy and eliminate intermediaries between the Government – the Service Provider and the Private/Legal entities – the Service Receiver. 

Blockchain technology has the potential to boost government efficiency, transparency, responsiveness, and thereby increase citizen trust, however, not many countries have the intellectual, technical, material and financial capacity to design, implement and operate such services. Hence, the capacity to implement Govtech and least of all, one based on Blockchain is uneven and to put it mildly- weak in developing countries.

In such cases, international organizations and multinational platforms can play a crucial role though carefully planned projects, tailored to the needs of the respective governments. International development actors can bring the degree of trust and stability to developing countries, their sheer presence will generate the level of confidence needed to realize such projects. Contribution of international organizations should focus on two main directions: i) technical/intellectual support and ii) financial assistance. In cooperation with the local governments, it is possible to design and implement number of pilots to test the possible outcomes of the reforms needed to implement Blockchain based Govtech.  Through development of various concepts, “white papers”, studies and reports aimed at identifying challenges and applying solutions, international and local actors can come up with legal and technical basis, which can be used by the governments to implement Blockchain based public services. This can also serve as the tool for efficient administration and regulation of various Govtech advancements.   

Blockchain based GovTech is a pillar of the digital economy framework, it provides necessary technology to foster economic growth, reduce poverty and boost shared prosperity. National governments should prioritize further advancements and capacity building in the field through international cooperation and active participation of donor organizations.