October 14, 2021

How Blockchain Can Change Politics – Part 1

How Blockchain Can Change Politics Part 1
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**Download our brochure to learn how blockchain technology can improve traceability.


With its clear advantages in data transparency, data security, and data immutability, blockchain technology has the potential to combat government corruption.

Since incorruptibility is at its core, it enables tamper-evident record-keeping with real-time transaction transparency and auditability, as well as automated smart contract features.

Blockchain technology alone would not entirely deter crimes or thwart bad actors.

Without consistent law enforcement, reliable data inputs, sufficient technical know-how, cooperative political elites, and societal goodwill, blockchain-based governance can prove no more effective at deterring corruption than current laws and policies.

Nonetheless, prominent use cases illustrate how the technology can be used to fix flaws in existing political systems.

The cost of political corruption to countries and the populations affected by it is far more significant than developing and implementing blockchain technology for governance.

In this Part 1 blog, we will discuss how blockchain technology can improve political systems by making processes fairer for all.

1) Public Procurement

Public procurement (government contracting) is the single largest source of political corruption worldwide.

Numerous factors contribute to the abuse of this government mechanism in both high and low-income countries.

Vendor selection processes are intricate and opaque, requiring a great deal of human judgment.

Not only do these flaws result in enormous financial waste, but they also distort consumer costs, inhibit healthy competition, and often result in substandard products and ineffective services.

-How blockchain technology improves this

By allowing third-party monitoring of tamper-evident transactions and promoting greater objectivity and uniformity through automated smart contracts, a blockchain-based mechanism will directly resolve procurement’s corruption risk factors, thus increasing the transparency and accountability of transactions and actors.

-Significant limitations

Numerous roadblocks will obstruct successful deployment. For instance, the more accessible and usable a blockchain platform is, the more vulnerable it is. By overwhelming a system with irrelevant information or depriving it of the funds required to complete each transaction, “spamming” or “draining” attacks may affect a system’s anti-corruption ability.

2) Registries of Land Titles

Numerous governments have begun experimenting with land title registries driven by blockchain technology.

Specific programs, such as those in Sweden, are inspired by the need to boost productivity in a transaction-heavy industry.

Other initiatives in Honduras and India, are committed to establishing and extending property rights and increasing accountability in a process prone to corruption.

-How blockchain technology improves this

Land registries powered by blockchain technology have the potential to provide a free, decentralized, publicly verifiable, and immutable record system for individuals to definitively prove their land rights. These characteristics mitigate the possibility of self-interested misuse of land rights and strengthen the overall durability of land ownership.

-Significant limitations

Blockchain systems by themselves are incapable of formalizing land ownership or resolving inefficient governance. Countries without or with incomplete or inaccurate land records must undergo a lengthy process of collecting, cleaning, and digitizing this data before a blockchain-based land title registry can work.

3) E-voting and Digital Identity (DID)

Concerns about election protection, voter registration transparency, poll accessibility, and voter turnout have prompted governments to consider blockchain-based voting systems as a way to boost public confidence and involvement in critical democratic processes.

-How blockchain technology improves this

The decentralized, open, immutable, and encrypted characteristics of blockchain technology can help mitigate election tampering and increase poll accessibility by providing secure digital identities.

-Significant limitations

Given the stakes involved in elections, electronic blockchain-based voting entails significant risks. Cyber-attacks and other security flaws are inherent in all emerging technology frameworks, including those based on blockchain technologies. These could result in vote-rigging, the erasure of paper trails, or electoral turmoil.

Additionally, voting systems based on blockchain technology could pose privacy risks and concerns. Thus, any such service must be delivered by a highly vetted technology provider and system. If responsibly and adequately implemented, blockchain can provide the most reliable elections system ever created.

4) Registries with Beneficial Corporate Ownership

Recent corruption scandals have sparked global outrage regarding the shadowy or undisclosed beneficial ownership of corporations. Secretly run businesses can easily be used to launder money, pay bribes, or sway public investment in self-interested ways.

-How blockchain technology improves this

Numerous countries are establishing central registries of beneficial corporate ownership to monitor conflicts of interest and illegal activity more effectively. Blockchain-based registries that are tamper-evident and widely available could provide much-needed transparency and disclosure.

-Significant limitations

Corporate ownership registries remain an exception, and those that do exist are often deficient in terms of verification systems. The relatively recent advent of beneficial corporate ownership registries, coupled with the novelty of blockchain technology, could present some implementation challenges. Additionally, implementing a robust and verifiable blockchain-based registry would require buy-in from lawmakers, attorneys, banks, and big businesses, many of whom may believe that such a system’s public transparency and auditability are detrimental to their interests.

5) Grant Payments

Numerous governments annually distribute millions of dollars to fund various causes, including education, the arts, humanitarian relief, and social assistance. This method is always perplexing, vague, and wasteful, resulting in money being lost to banking fees and intermediaries and opening the door to corrupt financial diversions.

-How blockchain technology improves this

Blockchain technology has the ability to help create public trust in such structures. Disintermediation and a reduction in the number of participants involved in grant awards, disbursements, and management could streamline the process, reduce costs, and reduce opportunities for illegal financial siphoning.

-Significant limitations

Recipients’ ability to handle blockchain-based grant disbursements efficiently can prove difficult or restrict the scope of transparency. Individuals and organizations with less technical savviness or financial resources can face prejudice or exclusion from grant distribution processes if they are unable to use the system.

Balancing the advantages and drawbacks

Apart from application-specific concerns, overarching technological impediments could stymie successful blockchain-based governance. These impediments can include implementation costs and scalability, as well as uncertain negative externalities and inexperienced policymakers.

Additional blockchain use cases will arise to combat bad actors. When they do, lawmakers should not be distracted by the innovation and untapped anti-corruption potential of blockchain-based solutions.

Nonetheless, blockchain technology possesses valuable characteristics, especially those related to tamper-evident and permanent databases and record-keeping, that have the potential to significantly improve transparency, accountability, and citizen participation in areas that have a material effect on democratic governance and sustainable development globally.

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**Download our brochure to learn how blockchain technology can improve traceability.

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For more information and to receive customized feedback, please send your inquiries to info@emurgo.id and our team will get back to you in a timely manner to help you develop and implement an efficient digital blockchain solution.


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