Can Blockchain & DLT make Governments more Effective and Boost the Wider Economy?

GRAYLL
GRAYLL
May 26 · 3 min read

Most new technologies follow a similar pattern. Initially, they’re the preserve of those in the know. As word spreads, hype builds and people try to make a fast buck. Then steadily, the technology matures, people understand how to apply it, and the economic and social value begins to flow. And sometimes, as with the Internet, the technology transforms the way we all live and work.

Could this be the case with blockchain?

Until now, the name has mostly been associated with crypto-currencies. But organizations in the public and private sectors are beginning to understand how the technology can be applied to long-standing business issues so that it really drives value.

But Blockchain could have a much larger part to play in both public and private sectors it has the potential to be a genuinely transformative technology. Could it, for example, lead to the more efficient running of government, and even help carve out a competitive economic advantage for the organizations and jurisdictions that use it?

To help start a debate about this question, The Researchers at The School of Business and Economics at the University of Canterbury in Christchurch, New Zealand have produced a paper that discusses the avenues through which a public implementation of Blockchain could deliver efficiency gains in the running of a government.

The paper addresses some of the current inefficiencies in record-keeping and the improvements that could come about if record-keeping, including keeping track of tax liability, would be “put on the Blockchain.” It discusses some of the current issues with transaction costs and property rights that governments face and how these could be addressed with Blockchain.

It also tackles issues with asymmetric information in general, and moral hazard in particular, which are ripe in the delivery of public services, and how Blockchain could be used to reduce them to achieve efficiency gains and better outcomes for public policy. But, of course, these potential gains in efficiency and outcomes are not confined to the public sector.

Could jurisdictions that facilitate the use of Blockchain technology across their economies carve out a competitive advantage — with big potential economic gains?

Will jurisdictions that transform their legal, regulatory and public-sector delivery systems to capture the advantages of Blockchain give themselves a competitive edge that benefits businesses and citizens?

How Blockchain will transform government and the wider economy is not yet certain. But what is clear is that governments should be asking themselves these questions and gaining a deeper understanding of how they can help shape economic competitiveness in a Blockchain world.

As Blockchain technology matures, and the benefits of its practical applications emerge, both public and private organizations will continue to ask questions and engage with the debate.

GRAYLL

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