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.