Blockchain technology for corruption control

For example, in case of changing the evaluation criteria of public procurement or amending the bid, blockchain technology makes public the record of the change while preserving the original information. It provides clear information about which officer, when and from where he amended the provisions of the said tender.

आश्विन २६, २०८२

दीपेश घिमिरे

Blockchain technology for corruption control

What you should know

In the third week of June, the fact that the provisions related to the 'cooling off period' of the Federal Civil Service Bill 2080 had been breached was made public. A 7-member special parliamentary committee was formed on June 23 to study who did the vandalism. The said committee took about a month to prepare the study report and submitted it to the speaker on July 18.

Who manipulated the bill in the report? It was not clearly stated, but more focused on who has the moral responsibility. However, based on the same report, the then chairman of the State Order and Good Governance Committee, Ramhari Khatiwada, resigned on July 27. 

Corruption control is an essential prerequisite to make the governance system transparent, accountable and responsive by winning the trust of the public in the democratic governance system. But this kind of corruption exists in the country's law making, implementation, monitoring and evaluation, project management, service delivery and other activities. In the Corruption Perceptions Index published by Transparency International every year, in 2024, Nepal has scored 34 points out of 100 and is ranked 107th out of 180 countries.

The number of complaints to the Abuse of Authority Investigation Commission is also increasing every year. A total of 25152 complaints were received in the financial year 2076/77. By 2080/81, 36189 complaints had been registered with the Commission. Various legal, political and institutional arrangements have been made to control this kind of increasing corruption. The Constitution of Nepal has provided for the Abuse of Authority Investigation Commission to control corruption. But the risk of corruption has not decreased. 

In this situation, the use of blockchain technology is now an option for corruption control. If Nepal can also adopt the blockchain technology adopted by some countries of the world for the control of corruption, it will contribute significantly to the control of corruption that may occur in policy making and other activities. The use of blockchain technology directly contributes to governance transparency, accountability and the rule of law. And it is easy to collect evidence of corruption. 

What is blockchain technology? 

Blockchain technology used in corruption control is a decentralized digital system that keeps all transactions and data organized in secure segments. Such data and information and transactions cannot be changed. It reduces the possibility of corruption by ensuring that no data can be changed and tracking every activity.

uses this technology to protect all transactions and transactions in a way that is immediately public but never changed. It completely prevents fake transactions, document falsification and matching. By making data and details public among various stakeholders, it eliminates the control of any one party and prevents possible abuse. 

An article titled 'How Blockchain Can Help Eliminate Corruption in Government Services?', by scholar Matthew Van Niekerk, was published on the World Economic Forum website on 5 July 2021. In the article, Niekerk argues that blockchain technology can make government systems fairer and more efficient, and reduce potential risks of corruption. A large part of the government budget is allocated to public procurement and there is a high possibility of corruption.

According to the article, a study by the Organization for Economic Co-operation and Development (OECD) showed that corruption accounts for 10 to 30 percent of total public procurement. Blockchain technology reduces the risk of corruption by increasing transparency in areas that are at high risk of corruption, including the public procurement process. Blockchain technology makes the procurement process easily accessible to the public and the media. Likewise, the land and property registration system is organized. This easily prevents any illegal transactions that may take place in the sale of such details. 

Understanding this, some countries in the world are using blockchain technology to control corruption. Georgia launched a land registration system using blockchain technology in 2016 through its National Public Records Department. All land related records are digitally stored on the blockchain. which cannot be manipulated. It has made the registration system more secure, transparent and corruption free.

Likewise, Estonia has digitized 99 percent of public services using blockchain technology. It has made important government functions transparent and secure, including the tax system, healthcare and voting services. Estonia has developed its own blockchain technology to secure information and data. 

Dantewada district in neighboring India's Chhattisgarh state has secured more than seven million land records on the blockchain. This has reduced the risk of possible corruption in the future. In 2018, Sierra Leone used a blockchain-based election system to make the voting process transparent and reliable. It secures the entire voting record on the blockchain in a way that can only be verified by authorized individuals but viewable by all. This has reduced possible corruption and rigging in elections. These examples show that applying blockchain technology to public administration can reduce corruption. 

Various studies have shown that blockchain technology can protect against potential risks of corruption at all stages of the public procurement process. For example, in case of changing the evaluation criteria of public procurement or amending the bid, blockchain technology makes public the record of the change while preserving the original information. It provides clear information about which officer, when and from where he amended the provisions of the said tender.

Basically only government employees and businessmen are getting involved in the current public procurement process. Which seems to increase corruption and irregularity. But blockchain encourages the participation of a wide range of stakeholders in the procurement process, such as watchdogs, the media, government officials and the public. This technology makes every information instantly available to all stakeholders easily and simply. 

Likewise, blockchain technology can also make a significant contribution to real estate and property registration. The land registration system verifies ownership. In this way, it systematically protects the formal loan taken by any person while purchasing the property. Blockchain technology can decouple the real estate buying and selling process. It can also put an end to actions such as registering public land in the name of a person, selling it without the permission of the land owner, and bribery transactions that may occur in the land office. 

Blockchain technology is a decentralized, publicly shared digital ledger technology in which data is stored in chained 'blocks'. Such blocks are immutably connected to the network. Blockchain decentralizes all information. So that it does not depend only on a single agency or official, but the entire data of the transaction is distributed to the entire network. The facts, data, information and details contained in the blockchain are immutable.

Once a data block is written, it cannot be changed. It prevents manipulation or deletion of facts. Also, new entries to the blockchain network are easily visible and visible to all participants. It enhances transparency on one hand and also promotes data security on the other. This technology uses advanced digital signatures to secure data. Likewise, data transparency, truthfulness and integrity are protected. In this technology, the real name of the users is not visible, although there is a system for tracking all the actions that take place. 

Blockchain technology and anti-corruption 

Blockchain technology can make a significant contribution to corruption control. Blockchain technology prevents data interception and deletion. Data entered into the blockchain can never be changed. So that no one can erase the possible evidence of corrupt officials. It prevents data and details from being changed under the pressure of the powerful.

It reduces human intervention in areas such as budget approval, grant distribution, government contracting process, procurement process and contributes to ending procedural corruption. Because data is immutable through the use of blockchain technology, all individuals involved in contracts, expenditures or decisions can be easily tracked and ensures accountability of such officials. Likewise, blockchain provides the technological basis to help reduce processing time, reduce transaction costs, detect corrupt strategies, and detect unfair practices. 

Corruption is increasing in Nepal due to correcting details, changing documents, blaming each other. Blockchain technology seems to be very useful and effective in ending the corrupt activities that are rampant due to lack of accountability and responsibility. By keeping all government budget and expenditure details on the blockchain, citizens can easily track spending in real time. Likewise, the possibility of hiding assets or giving false information will end if a system is created to make the property details of all officials, including politicians and bureaucrats, secure and public on the blockchain.

Using this technology in the public sector procurement process reduces human intervention. Which may lead to undue influence from commission, setting. Likewise, the use of blockchain in the areas of public service delivery such as land registration, citizenship, passport, tax system, social security distribution, etc. will end unnecessary delays and irregularities. Corruption in these service providers can be stopped now. Likewise, the possibility of hiding or erasing evidence is eliminated when auditing bodies, investigative bodies, etc. use blockchain. 

However, there are some challenges in Nepal's adoption of blockchain technology. First, there is the legal barrier. There is still no clear legal system and structure in Nepal regarding Blockchain. Second, there is a lack of technical capacity and the necessary infrastructure. Third, there is a lack of awareness of blockchain technology from policy makers to the general public.

It lacks education and public awareness. Despite these challenges, the foundation must be laid for the use of modern technology in corruption control. The practical application of blockchain technology also requires urgent studies, legal reform and regulatory clarity, and work on technical infrastructure, education and public awareness. Therefore, the government, which was formed on the foundation of the movement of the Gen-G generation against corruption, should start concrete action on this.

दीपेश घिमिरे दीपेश घिमिरे सुशासनमा विषयमा लेख्छन, अनुसन्धान गर्छन् । उनकाे रिफ्लेक्सनस् अन नेपलिज सोसाइटीः अर्काइभ अफ सोसियोलोजिकल एस्सेज र शासन र शासक जस्ता पुस्तक प्रकाशित छन् ।

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