Can Blockchain for public procurement reduce corruption?In partnership with the Inter-American Development Bank (IDB) and the Office of the Inspector General of Colombia (Procuraduría General de Colombia), the World Economic Forum has led a multi-stakeholder team to investigate, design and trial the use of blockchain technology for corruption-prone government processes, anchored in the use case of public procurement.

“The initial implementation of an emerging technology inevitably involves trial and error. This section proposes a framework of key performance indicators (KPIs) and evaluation strategies for a blockchain-based e-procurement platform and outlines a general approach to data gathering. For the Transparency Project, the evaluation will be performed upon completion of the software proof-of-concept (PoC) deployment, potentially later in 2020.” (Exploring Blockchain Technology for Government Transparency: Blockchain-Based Public Procurement to Reduce Corruption).

The procurement challenge that corruption presents

In many parts of the world, public-sector corruption is the single-largest challenge. It stifles social, economic and environmental development. Often, corruption centres around a lack of transparency, inadequate record-keeping and low public accountability.

Blockchain and distributed ledger technologies, when applied with care to certain corruption-prone government processes, has the potential to:

  • increase transparency and accountability in these systems
  • reduce the risk or prevalence of corrupt activity.

Dedicated workshops and meetings gathered input:

  • in Bogotá and Medellín (Colombia)
  • at the World Economic Forum Sustainable Development Impact Summit 2019
  • at the Partnering Against Corruption Initiative (PACI) Biannual Community meeting, at the World Economic Forum Annual Meeting in Davos-Klosters
  • at other venues.

This corruption report

The project developed a blockchain-based software proof-of-concept (PoC) for public procurement. The project is rooted in a software PoC for the fully public and permissionless Ethereum blockchain network. The objective is to uncover:

  • the salient technology trade-offs
  • the limitations with blockchain for public procurement generally.

The project intends to test these in a live procurement auction in Colombia in 2020 and with a fully open and decentralised blockchain configuration.

The system designated is that associated with the procurement of the Programa de Alimentación Escolar (PAE), or public-school meal programme. This is a high-priority public programme providing meals to the country’s most vulnerable children. Historically this programme has been notable for procurement corruption.

Enterprise Times: what does this mean

Blockchain attracts lots of attention for its security and immutability, especially from the high-tech fields for the technology. What the WEF seems to be doing with the IDB is turning the focus around, and looking at the explicit problem – corruption – and then how blockchain may inhibit it.

The project includes policy proposals to strengthen public procurement, as well as governance guidelines for the effective deployment of a blockchain-based system. It also discusses civic engagement strategies which can:

  • strengthen system participation
  • obtain success, through public monitoring.
  • consider the necessary policy, governance and civic engagement elements alongside detailed technical designs.


Please enter your comment!
Please enter your name here