Blockchain for public sector accountability
In the summer of 2020, the U.S. Federal Government rolled out its Paycheck Protection Program (PPP). In theory, the program sounded like a good idea, with its purpose being to support small businesses in covering expenses such as payroll, rent, etc. during the pandemic.
Unfortunately, its rollout was an unmitigated disaster. At first, the government refused to show where any of the money had gone, but after months of litigation, the list was released, and it wasn’t good. Loans went to fake businesses, massive corporations like the Los Angeles Lakers, and businesses with questionable ties to those administering the loans. The list of sketchy loan disbursements was massive, with these being just a few examples.
Unfortunately, there is often an utter lack of accountability when it comes to public spending. But imagine a future where this wasn’t the case, and imagine if every PPP loan made was recorded on an immutable blockchain that was publicly accessible and tamper-proof. You could not only see where each loan went, but could implement procedures for recipients to report how the funds were spent (i.e. salaries, rent, etc.), to ensure accountability and reduce fraud potential. To add another layer, you could make use of Smart Contracts to ensure that loans only went to businesses that were eligible to receive the funds, as opposed to multi-billion dollar corporations.
This is one example of how blockchain could be used to hold the public sector accountable, but the use cases go well beyond this. Similar to the case highlighted above, there is a huge opportunity for blockchain innovations when it comes to taxes. The efficiency of the blockchain could make it possible for records of an individual’s tax payments to be stored and, in theory, tracked to see how they are spent. This would enable citizens to have a greater understanding of where their tax dollars go, enabling them to hold their governments accountable to a greater level.
Then there is voting, arguably the most important factor in government accountability. Unfortunately, voting rights are under attack in many countries. We have seen cases where voter rolls have been illegally purged, such as the case earlier this year in Georgia when 198,000 mostly black voters were coincidentally purged from voter rolls leading up to key senate run-offs, or the case in New York in 2016 when 200,000 voters were illegally purged from voter rolls. There are many questions as to why or how this happened and who was responsible. These are just two examples of the many occasions around the world resulting in the disenfranchisement of millions of voters, and substantial time and effort being spent by civil rights organizations litigating these cases.
This problem could be solved if voter records were securely stored on a blockchain. With a record of every “transaction” taking place on the blockchain’s ledger, it would be nearly impossible to purge voters from a voting list without getting caught, as the fraudulent blocks would easily be noticed, and flagged or rejected.
Then there is actual voting. Over the past several months, false allegations of electoral fraud have been spread by right-wing political groups who are simultaneously working to limit the ability of certain disenfranchised groups, mainly black Americans, to exercise their democratic right to vote. Having a voting infrastructure built on blockchain technology could minimize the ability of political actors to disenfranchise voters while simultaneously shutting down baseless allegations of fraud.
This article on Investopedia explains how blockchain technology could help resolve issues with online voting:
A blockchain-based voting application does not concern itself with the security of its Internet connection, because any hacker with access to the terminal will not be able to affect other nodes. Voters can effectively submit their vote without revealing their identity or political preferences to the public. Officials can count votes with absolute certainty, knowing that each ID can be attributed to one vote, no fakes can be created, and that tampering is impossible.
With such a reliable and efficient voting infrastructure in place, it could also open democratic societies to greater political participation by making it easier to hold referendums and consult with the public through the use of the same technology. It could also help with gathering essential data through censuses, which are often outdated and overly bureaucratic. Oh, and imagine the time and money that could be saved by eliminating outdated vote-counting systems. Gone would be the days of waiting weeks for final vote tallies!
One question you may be asking is, “why the hell would any government want to make use of this technology?”. This is a valid question, as the use of blockchain technologies for voting and public sector accountability would certainly take power away from politicians, and redistribute it to citizens.
Moving forward with this amazing technology in the public arena will not be easy, and will face huge resistance not only from politicians, but also from corporations whose businesses are tied to current electoral systems. It will require blockchain champions to advocate to their representatives and even run for office to put this issue at the forefront. With a public that understands and sees the value in the technology, and champions who campaign on the promise of blockchain-based voting and accountability infrastructure, it is certainly possible!
So, what do you think? Is this just a pipe dream or is it possible to implement such a system in the future? Tweet us at @Crypto_Altruism, we would love to hear from you.
