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Blockchain technology and ways to use it in combating corruption activities

 Blockchain technology can play a unique role in combating corruption of all kinds.

Blockchain technology can offer a unique combination of permanent record keeping, real-time transaction transparency and auditing, and smart contract functionality.

To be sure, blockchain technology alone cannot completely prevent crime or thwart fraudulent operations, while it can complement and reinforce existing legal frameworks and social structures.

Below we will review the main use cases of blockchain technology and how the technology can be deployed to address weaknesses in current systems:

 1. Public Procurement:

Public procurement is the single largest market for government spending and the largest source of official corruption worldwide.

There are various factors that make corruption pervasive in government circles and precisely at the point of public procurement, including the complex and ambiguous vendor selection processes that involve a high degree of human judgment.

Not only do these weaknesses result in significant financial waste, but they distort market prices, reduce healthy competition, and often lead to substandard goods and ineffective services.

Blockchain technology can help by directly dealing with corruption risk factors related to procurement by facilitating third-party oversight of transactions, preventing tampering and enabling greater objectivity through smart contracts, thus enhancing transparency and accountability in transactions.

 2. Land ownership records:

Many governments have begun experimenting with blockchain-based land ownership records.

Some initiatives, such as those in Sweden, are driven by the desire to increase efficiency in this transaction-intensive industry.

Others, such as Honduras and India, intend to inculcate and expand property rights and enhance transparency in a process vulnerable to corrupt practices.

Blockchain technology can help by providing blockchain-based land records a secure and decentralized registration system that is publicly verifiable and immutable in which individuals can definitively prove their rights to the land.

These attributes reduce the chance of land manipulation and increase the overall resilience of land ownership.

3. Electronic voting:

Growing concern about election security, integrity of voter registration, accessibility to poll results, and voter turnout has led governments to consider blockchain-based voting platforms as a way to increase transparency.

Blockchain technology can aid the voting process by reducing electoral tampering and increasing access to poll results without the ability to tamper with it.

 4. Corporate ownership records:

Recent corruption scandals have raised concerns around the world over the ownership of shadowy or undisclosed companies.

Covertly run companies can easily be used to launder money, pay bribes, or influence government investment with self-interest.

Several countries have begun to develop decentralized registries for recording company ownership in order to better track conflicts of interest and criminal activity.

Blockchain-based registries can provide a mechanism to prevent tampering and promote much-needed transparency.

5. Payments:

Many governments spend millions of dollars annually to support education, humanitarian aid, and social assistance, among other reasons.

This process is often complicated, opaque and ineffective, causing lost funds for bank fees and middlemen and opening the possibility of corrupt remittances.

Blockchain technology can help build public confidence in such systems, as the ability to not mediate and reduce the number of actors involved in granting, disbursement, and administration can simplify the process, reduce costs, and reduce opportunities for illicit financial exploitation.

Balancing benefits and challenges:

In addition to the potential special applications of blockchain technology, systemic technical barriers may hinder effective blockchain-based governance.

These barriers can range from implementation cost and scalability, to unknown negative externalities and policymakers unaware of the technology's capabilities.

The World Economic Forum recently released a report to further assess the ability of blockchain to effectively curb public corruption.

The Exploring Blockchain Technology for Government Transparency Report focuses on the blockchain-based public procurement system on an ongoing forum project with the Inter-American Development Bank and the Office of the Inspector General of Colombia, which investigated the case of blockchain use.


More cases of blockchain technology being used to address bad appearances will continue to emerge.

Blockchain technology provides many services, particularly in relation to clear, permanent databases and record keeping, which can enhance transparency, accountability, and citizen participation in areas affecting democratic governance and sustainable development around the world.