Can Smart Cities Be Equitable?

Curated on Posted on by Stefaan Verhulst

Homi Kharas and Jaana Remes at Project Syndicate: “Around the world, governments are making cities “smarter” by using data and digital technology to build more efficient and livable urban environments. This makes sense: with urban populations growing and infrastructure under strain, smart cities will be better positioned to manage rapid change.

But as digital systems become more pervasive, there is a danger that inequality will deepen unless local governments recognize that tech-driven solutions are as important to the poor as they are to the affluent.

While offline populations can benefit from applications running in the background of daily life – such as intelligent signals that help with traffic flows – they will not have access to the full range of smart-city programs. With smartphones serving as the primary interface in the modern city, closing the digital divide, and extending access to networks and devices, is a critical first step.

City planners can also deploy technology in ways that make cities more inclusive for the poor, the disabled, the elderly, and other vulnerable people. Examples are already abundant.

In New York City, the Mayor’s Public Engagement Unit uses interagency data platforms to coordinate door-to-door outreachto residents in need of assistance. In California’s Santa Clara County, predictive analytics help prioritize shelter space for the homeless. On the London Underground, an app called Wayfindr uses Bluetooth to help visually impaired travelers navigate the Tube’s twisting pathways and escalators.

And in Kolkata, India, a Dublin-based startup called Addressing the Unaddressedhas used GPS to provide postal addresses for more than 120,000 slum dwellers in 14 informal communities. The goal is to give residents a legal means of obtaining biometric identification cards, essential documentation needed to access government services and register to vote.

But while these innovations are certainly significant, they are only a fraction of what is possible.

Public health is one area where small investments in technology can bring big benefits to marginalized groups. In the developing world, preventable illnesses comprise a disproportionate share of the disease burden. When data are used to identify demographic groups with elevated risk profiles, low-cost mobile-messaging campaigns can transmit vital prevention information. So-called “m-health” interventions on issues like vaccinations, safe sex, and pre- and post-natal care have been shown to improve health outcomes and lower health-care costs.

Another area ripe for innovation is the development of technologies that directly aid the elderly….(More)”.

Can crowdsourcing scale fact-checking up, up, up? Probably not, and here’s why

Curated on Posted on by Stefaan Verhulst

Mevan Babakar at NiemanLab: “We foolishly thought that harnessing the crowd was going to require fewer human resources, when in fact it required, at least at the micro level, more.”….There’s no end to the need for fact-checking, but fact-checking teams are usually small and struggle to keep up with the demand. In recent months, organizations like WikiTribune have suggested crowdsourcing as an attractive, low-cost way that fact-checking could scale.

As the head of automated fact-checking at the U.K.’s independent fact-checking organization Full Fact, I’ve had a lot of time to think about these suggestions, and I don’t believe that crowdsourcing can solve the fact-checking bottleneck. It might even make it worse. But — as two notable attempts, TruthSquad and FactcheckEU, have shown — even if crowdsourcing can’t help scale the core business of fact checking, it could help streamline activities that take place around it.

Think of crowdsourced fact-checking as including three components: speed (how quickly the task can be done), complexity (how difficult the task is to perform; how much oversight it needs), and coverage (the number of topics or areas that can be covered). You can optimize for (at most) two of these at a time; the third has to be sacrificed.

High-profile examples of crowdsourcing like Wikipedia, Quora, and Stack Overflow harness and gather collective knowledge, and have proven that large crowds can be used in meaningful ways for complex tasks across many topics. But the tradeoff is speed.

Projects like Gender Balance (which asks users to identify the gender of politicians) and Democracy Club Candidates (which crowdsources information about election candidates) have shown that small crowds can have a big effect when it comes to simple tasks, done quickly. But the tradeoff is broad coverage.

At Full Fact, during the 2015 U.K. general election, we had 120 volunteers aid our media monitoring operation. They looked through the entire media output every day and extracted the claims being made. The tradeoff here was that the task wasn’t very complex (it didn’t need oversight, and we only had to do a few spot checks).

But we do have two examples of projects that have operated at both high levels of complexity, within short timeframes, and across broad areas: TruthSquad and FactCheckEU….(More)”.

The GovLab Selected Readings on Blockchain Technologies and the Governance of Extractives

Curated on Posted on by Andrew Young

Curation by Andrew Young, Anders Pedersen, and Stefaan G. Verhulst

Readings developed together with NRGI, within the context of our joint project on Blockchain technologies and the Governance of Extractives. Thanks to Joyce Zhang and Michelle Winowatan for research support.

We need your help! Please share any additional readings on the use of Blockchain Technologies in the Extractives Sector with [email protected].  

Introduction

By providing new ways to securely identify individuals and organizations, and record transactions of various types in a distributed manner, blockchain technologies have been heralded as a new tool to address information asymmetries, establish trust and improve governance – particularly around the extraction of oil, gas and other natural resources. At the same time, blockchain technologies are been experimented with to optimize certain parts of the extractives value chain – potentially decreasing transparency and accountability while making governance harder to implement.

Across the expansive and complex extractives sector, blockchain technologies are believed to have particular potential for improving governance in three key areas:  

  • Beneficial ownership and illicit flows screening: The identity of those who benefit, through ownership, from companies that extract natural resources is often hidden – potentially contributing to tax evasion, challenges to global sanction regimes, corruption and money laundering.
  • Land registration, licensing and contracting transparency: To ensure companies extract resources responsibly and comply with rules and fee requirements, effective governance and a process to determine who has the rights to extract natural resources, under what conditions, and who is entitled to the land is essential.
  • Commodity trading and supply chain transparency: The commodity trading sector is facing substantive challenges in assessing and verifying the authenticity of for example oil trades. Costly time is spent by commodity traders reviewing documentation of often poor quality. The expectation of the sector is firstly to eliminate time spent verifying the authenticity of traded goods and secondly to reduce the risk premium on trades. Transactions from resources and commodities trades are often opaque and secretive, allowing for governments and companies to conceal how much money they receive from trading, and leading to corruption and evasion of taxation.

In the below we provide a selection of the nascent but growing literature on Blockchain Technologies and Extractives across six categories:

Selected Readings 

Blockchain Technologies and Extractives – Promise and Current Potential

Adams, Richard, Beth Kewell, Glenn Parry. “Blockchain for Good? Digital Ledger Technology and Sustainable Development Goals.” Handbook of Sustainability and Social Science Research. October 27, 2017.

  • This chapter in the Handbook of Sustainability and Social Science Research seeks to reflect and explore the different ways Blockchain for Good (B4G) projects can provide social and environmental benefits under the UN’s Sustainable Goals framework
  • The authors describe the main categories in which blockchain can achieve social impact: mining/consensus algorithms that reward good behavior, benefits linked to currency use in the form of “colored coins,” innovations in supply chain, innovations in government, enabling the sharing economy, and fostering financial inclusion.
  • The chapter concludes that with B4G there is also inevitably “Blockchain for Bad.” There is already critique and failures of DLTs such as the DAO, and more research must be done to identify whether DLTs can provide a more decentralized, egalitarian society, or if they will ultimately be another tool for control and surveillance by organizations and government.

Cullinane, Bernadette, and Randy Wilson. “Transforming the Oil and Gas Industry through Blockchain.” Official Journal of the Australian Institute of Energy News, p 9-10, December 2017.

  • In this article, Cullinane and Wilson explore blockchain’s application in the oil and gas industry “presents a particularly compelling opportunity…due to the high transactional values, associated risks and relentless pressure to reduce costs.”
  • The authors elaborate four areas where blockchain can benefit play a role in transforming the oil and gas industry:
    • Supply chain management
    • Smart contracts
    • Record management
    • Cross-border payments

Da Silva, Filipe M., and Ankita Jaitly. “Blockchain in Natural Resources: Hedging Against Volatile Prices.” Tata Consultancy Services Ltd., 2018.

  • The authors of this white paper assess the readiness of natural resources industries for blockchain technology application, identify areas where blockchain can add value, and outline a strategic plan for its adoption.
  • In particular, they highlight the potential for blockchain in the oil and gas industry to simplify payments, where for example, gas can be delivered directly to consumer homes using a blockchain smart contracting application.

Halford-Thompson, Guy. “Powered by Blockchain: Reinventing Information Management in the Energy Space.” BTL, May 12, 2017.

  • According to Halford-Thompson, “oil and gas companies are exploring blockchain’s promise to revamp inefficient internal processes and achieve significant reductions in operating costs through the automation of record keeping and messaging, the digitization of the supply chain information flow, and the elimination of reconciliation, among many other data management use cases.”
  • The data reconciliation process, for one, is complex and can require significant time for completion. Blockchain technology could not only remove the need for some steps in the information reconciliation process, but also eliminate the need for reconciliation altogether in some instances.

Blockchain Technologies and the Governance of Extractives

(See also: Selected Readings of Blockchain Technologies and its Potential to Transform Governance)

Koeppen, Mark, David Shrier, and Morgan Bazilian. “Is Blockchain’s Future in Oil and Gas Transformative Or Transient?“ Deloitte, 2017.

  • In this report, the authors propose four areas that blockchain can improve for the oil and gas industry, which are:
    • Transparency and compliance: Employment of blockchain is predicted to significantly reduce cost related to compliance, since it securely makes information available to all parties involved in the supply chain.
    • Cyber threats and security: The industry faces constant digital security threat and blockchain provides a solution to address this issue.
    • Mid-volume trading/third party impacts: They argue that the “boundaries between asset classes will blur as cash, energy products and other commodities, from industrial components to apples could all become digital assets trading interoperably.”
    • Smart contract: Since the “sheer size and volume of contracts and transactions to execute capital projects in oil and gas have historically caused significant reconciliation and tracking issues among contractors, sub-contractors, and suppliers,” blockchain-enabled smart contracts could improve the process by executing automatically after all requirements are met, and boosting contract efficiency and protecting each party from volatile pricing.

Mawet, Pierre, and Michael Insogna. “Unlocking the Potential of Blockchain in Oil and Gas Supply Chains.” Accenture Energy Blog, November 21, 2016.

  • The authors propose three ways blockchain technology can boost productivity and efficiency in oil and gas industry:
    • “Greater process efficiency. Smart contracts, for example, can be held in a blockchain transaction with party compliance confirmed through follow-on transactions, reducing third-party supervision and paper-based contracting, thus helping reduce cost and overhead.”
    • “Compliance. Visibility is essential to improve supply chain performance. The immutable record of transactions can aid in product traceability and asset tracking.”
    • “Data transfer from IoT sensors. Blockchain could be used to track the unique history of a device, with the distributed ledger recording data transfer from multiple sensors. Data security in devices could be safeguarded by unique blockchain characteristics.”

Som, Indranil. “Blockchain: Radically Changing the Mining Paradigm.” Digitalist, September 27, 2017.

  • In this article, Som proposes three ways that the blockchain technology can “support leaner organizations and increased security” in the mining industry: improving cybersecurity, increasing transparency through smart contracts, and providing visibility into the supply chain.

Identity: Beneficial Ownership and Illicit Flows

(See also: Selected Readings on Blockchain Technologies and Identity).

de Jong, Julia, Alexander Meyer, and Jeffrey Owens. “Using blockchain for transparent beneficial ownership registers.“ International Tax Review, June 2017.

  • This paper discusses the features of blockchain and distributed ledger technology that can improve collection and distribution of information on beneficial ownership.
  • The FATF and OECD Global Forum regimes have identified a number of common problems related to beneficial ownership information across all jurisdictions, including:
    • “Insufficient accuracy and accessibility of company identification and ownership information;
    • Less rigorous implementation of customer due-diligence (CDD) measures by key gatekeepers such as lawyers, accountants, and trust and company service providers; and
    • Obstacles to information sharing such as data protection and privacy laws, which impede competent authorities from receiving timely access to adequate, accurate and up-to-date information on basic legal and beneficial ownership.”
  • The authors argue that the transparency, immutability, and security offered by blockchain makes it ideally suited for record-keeping, particularly with regards to the ownership of assets. Thus, blockchain can address many of the shortcomings in the current system as identified by the FATF and the OECD.
  • They go on to suggest that a global registry of beneficial ownership using blockchain technology would offer the following benefits:
    • Ensuring real-time accuracy and verification of ownership information
    • Increasing security and control over sensitive personal and commercial information
    • Enhancing audit transparency
    • Creating the potential for globally-linked registries
    • Reducing corruption and fraud, and increasing trust
    • Reducing compliance burden for regulate entities

Herian, Robert. “Trusteeship in a Post-Trust World: Property, Trusts Law and the Blockchain.” The Open University, 2016.

  • This working paper discusses the often overlooked topic of trusteeship and trusts law and the implications of blockchain technology in the space. 
  • “Smart trusts” on the blockchain will distribute trusteeship across a network and, in theory, remove the need for continuous human intervention in trust fund investments thus resolving key issues around accountability and the potential for any breach of trust.
  • Smart trusts can also increase efficiency and security of transactions, which could improve the overall performance of the investment strategy, thereby creating higher returns for beneficiaries.

Karsten, Jack and Darrell M. West (2018): “Venezuela’s “petro” undermines other cryptocurrencies – and international sanctions.” Brookings, Friday, March 9 2018,

  • This article discusses the Venezuelan government’s cryptocurrency, “petro,” which was launched as a solution to the country’s economic crisis and near-worthless currency, “bolívar”
  • Unlike the volatility of other cryptocurrencies such as Bitcoin and Litecoin, one petro’s price is pegged to the price of one barrel of Venezuelan oil – roughly $60
  • And rather than decentralizing control like most blockchain applications, the petro is subject to arbitrary discount factor adjustment, fluctuating oil prices, and a corrupt government known for manipulating its currency
  • The authors warn the petro will not stabilize the Venezuelan economy since only foreign investors funded the presale, yet (from the White Paper) only Venezuelan citizens can use the cryptocurrency to pay taxes, fees, and other expenses. Rather, they argue, the petro represents an attempt to create foreign capital out of “thin air,” which is not subject to traditional economic sanctions.  

Land Registration, Licensing and Contracting Transparency

Michael Graglia and Christopher Mellon. “Blockchain and Property in 2018: At the End of the Beginning.” 2018 World Bank Conference on Land and Poverty, March 19-23, 2018.

  • This paper claims “blockchain makes sense for real estate” because real estate transactions depend on a number of relationships, processes, and intermediaries that must reconcile all transactions and documents for an action to occur. Blockchain and smart contracts can reduce the time and cost of transactions while ensuring secure and transparent record-keeping systems.
  • The ease, efficiency, and security of transactions can also create an “international market for small real estate” in which individuals who cannot afford an entire plot of land can invest small amounts and receive their portion of rental payments automatically through smart contracts.
  • The authors describe seven prerequisites that land registries must fulfill before blockchain can be introduced successfully: accurate data, digitized records, an identity solution, multi-sig wallets, a private or hybrid blockchain, connectivity and a tech aware population, and a trained professional community
  • To achieve the goal of an efficient and secure property registry, the authors propose an 8-level progressive framework through which registries slowly integrate blockchain due to legal complexity of land administration, resulting inertia of existing processes, and high implementation costs.  
    • Level 0 – No Integration
    • Level 1 – Blockchain Recording
    • Level 2 – Smart Workflow
    • Level 3 – Smart Escrow
    • Level 4 – Blockchain Registry
    • Level 5 – Disaggregated Rights
    • Level 6 – Fractional Rights
    • Level 7 – Peer-to-Peer Transactions
    • Level 8 – Interoperability

Thomas, Rod. “Blockchain’s Incompatibility for Use as a Land Registry: Issues of Definition, Feasibility and Risk.“ European Property Law Journal, vol. 6, no. 3, May 2017.

  • Thomas argues that blockchain, as it is currently understood and defined, is unsuited for the transfer of real property rights because it fails to address the need for independent verification and control.
  • Under a blockchain-based system, coin holders would be in complete control of the recordation of the title interests of their land, and thus, it would be unlikely that they would report competing or contested claims.
  • Since land remains in the public domain, the risk of third party possessory title claims are likely to occur; and over time, these risks will only increase exponentially.
  • A blockchain-based land title represents interlinking and sequential transactions over many hundreds, if not thousands, of years, so given the misinformation that would compound over time, it would be difficult to trust the current title holder has a correctly recorded title
  • The author concludes that supporters of blockchain for land registries frequently overlook a registry’s primary function to provide an independent verification of the provenance of stored data.

Vos, Jacob, Christiaan Lemmen, and Bert Beentjes. “Blockchain-Based Land Registry: Panacea, Illusion or Something In Between?“ 2017 World Bank Conference on Land and Poverty, March 20-24, 2017.

  • The authors propose that blockchain is best suited for the following steps in land administration:
    • The issuance of titles
    • The archiving of transactions – specifically in countries that do not have a reliable electronic system of transfer of ownership
  • The step in between issuing titles and archiving transactions is the most complex – the registration of the transaction. This step includes complex relationships between the “triple” of land administration: rights (right in rem and/or personal rights), object (spatial unit), and subject (title holder). For the most part, this step is done manually by registrars, and it is questionable whether blockchain technology, in the form of smart contracts, will be able to process these complex transactions.
  • The authors conclude that one should not underestimate the complexity of the legal system related to land administration. The standardization of processes may be the threshold to success of blockchain-based land administration. The authors suggest instead of seeking to eliminate one party from the process, technologists should cooperate with legal and geodetic professionals to create a system of checks and balances to successfully implement blockchain for land administration.  
  • This paper also outlines five blockchain-based land administration projects launched in Ghana, Honduras, Sweden, Georgia, and Cook County, Illinois.

Commodity Trading and Supply Chain Transparency

Ahmed, Shabir. “Leveraging Blockchain to Revolutionise the Mining Industry.” SAP News, February 27, 2018.

  • In this article, Ahmed identifies seven key use cases for blockchain in the mining industry:
    • Automation of ore acquisition and transfer;
    • Automatic registration of mineral rights and IP;
    • Visibility of ore inventory at ports;
    • Automatic cargo hire process;
    • Process and secure large amounts of IoT data;
    • Reconciling amount produced and sent for processing;
    • Automatically execute procurement and other contracts.

Brooks, Michael. “Blockchain and the Fight Against Illicit Financial Flows.” The Policy Corner, February 19, 2018.

  • In this article, Brooks argues that, “Because of the inherent decentralization and immutability of data within blockchains, it offers a unique opportunity to bypass traditional tracking and transparency initiatives that require strong central governance and low levels of corruption. It could, to a significant extent, bypass the persistent issues of authority and corruption by democratizing information around data consensus, rather than official channels and occasional studies based off limited and often manipulated information. Within the framework of a coherent policy initiative that integrates all relevant stakeholders (states, transnational organizations, businesses, NGOs, other monitors and oversight bodies), a international supply chains supported by blockchain would decrease the ease with which resources can be hidden, numbers altered, and trade misinvoiced.”

“Conflict Free Natural Resources.” Global Opportunity Report 2017. Global Opportunity Network, 2017.

  • In this entry from the Global Opportunity Report, and specifically toward the end of ensuring conflict-free natural resources, Blockchain is labeled as “well-suited for tracking objects and transactions, making it possible for virtually anything of value to be traced. This opportunity is about creating transparency and product traceability in supply chains.

“Blockchain for Traceability in Minerals and Metals Supply Chains: Opportunities and Challenges.” RCS Global and ICMM, 2017.

  • This report is based on insights generated during the Materials Stewardship Round Table on the potential of BCTs for tracking and tracing metals and minerals supply chains, which subsequently informed an RCS Global research initiative on the topic.
  • Insight into two key areas is increasingly desired by downstream manufacturing companies from upstream producers of metals and minerals: provenance and production methods
  • In particular, the report offers five key potential advantages of using Blockchain for mineral and metal supply chain activities:
    • “Builds consensus and trust around responsible production standards between downstream and upstream companies.
    • The immutability of and decentralized control over a blockchain system minimizes the risk of fraud.
    • Defined datasets can be made accessible in real time to any third party, including downstream buyers, auditors, investors, etc. but at the same time encrypted so as to share a proof of fact rather than confidential information.
    • A blockchain system can be easily scaled to include other producers and supply chains beyond those initially involved.
    • Cost reduction due to the paperless nature of a blockchain-enabled CoC [Chain of Custody] system, the potential reduction of audits, and reduction in transaction costs.”

Van Bockstael, Steve. “The emergence of conflict-free, ethical, and Fair Trade mineral supply chain certification systems: A brief introduction.” The Extractives Industries and Society, vol. 5, issue 1, January 2018.

  • This introduction to a special section considers the emerging field of “‘conflict-free’, ‘fair’ and ‘transparently sourced and traded’ minerals” in global industry supply chains.
  • Van Bockstael describes three areas of practice aimed at increasing supply chain transparency:
    • “Initiatives that explicitly try to sever the links between mining or minerals trading and armed conflict of the funding thereof.”
    • “Initiatives, limited in number yet growing, that are explicitly linked to the internationally recognized ‘Fair Trade’ movement and whose aim it is to source artisanally mined minerals for the Western jewellry industry.”
    • “Initiatives that aim to provide consumers or consumer-facing industries with more ethical, transparent and fair supply chains (often using those concepts in fuzzy and interchangeable ways) that are not linked to the established Fair Trade movement” – including, among others, initiatives using Blockchain technology “to create tamper-proof supply chains.”

Global Governance, Standards and Disclosure Practices

Lafarre, Anne and Christoph Van der Elst. “Blockchain Technology for Corporate Governance and Shareholder Activism.” European Corporate Governance Institute (ECGI) – Law Working Paper No. 390/2018, March 8, 2018.

  • This working paper focuses on the potential benefits of leveraging Blockchain during functions involving shareholder and company decision making. Lafarre and Van der Elst argue that “Blockchain technology can lower shareholder voting costs and the organization costs for companies substantially. Moreover, blockchain technology can increase the speed of decision-making, facilitate fast and efficient involvement of shareholders.”
  • The authors argue that in the field of corporate governance, Blockchain offers two important elements: “transparency – via the verifiable way of recording transactions – and trust – via the immutability of these transactions.”
  • Smart contracting, in particular, is seen as a potential avenue for facilitating the ‘agency relationship’ between board members and the shareholders they represent in corporate decision-making processes.

Myung, San Jun. “Blockchain government – a next for of infrastructure for the twenty-first century.” Journal of Open Innovation: Technology, Market, and Complexity, December 2018.

  • This paper argues the idea that Blockchain represents a new form of infrastructure that, given its core consensus mechanism, could replace existing social apparatuses including bureaucracy.
  • Indeed, Myung argues that blockchain and bureaucracy share a number of attributes:
    • “First, both of them are defined by the rules and execute predetermined rules.
    • Second, both of them work as information processing machines for society.
    • Third, both of them work as trust machines for society.”  
  • The piece concludes with five principles for replacing bureaucracy with blockchain for social organization: “1) introducing Blockchain Statute law; 2) transparent disclosure of data and source code; 3) implementing autonomous executing administration; 4) building a governance system based on direct democracy; and 5) making Distributed Autonomous Government (DAG).  

Peters, Gareth and Vishnia, Guy (2016): “Blockchain Architectures for Electronic Exchange Reporting Requirements: EMIR, Dodd Frank, MiFID I/II, MiFIR, REMIT, Reg NMS and T2S.” University College London, August 31, 2016.

  • This paper offers a solution based on blockchain architectures to the regulations of financial exchanges around the world for trade processing and reporting for execution and clearing. In particular, the authors give a detailed overview of EMIR, Dodd Frank, MiFID I/II, MiFIR, REMIT, Reg NMS and T2S.
  • The authors suggest the increasing amount of data from transaction reporting start to be incorporated on a blockchain ledger in order to harness the built-in security and immutability features of the blockchain to support key regulatory features.
  • Specifically, the authors suggest 1) a permissioned blockchain controlled by a regulator or a consortium of market participants for the maintenance of identity data from market participants and 2) blockchain frameworks such as Enigma to be used to facilitate required transparency and reporting aspects related to identities when performing pre- and post-trade reporting as well as for auditing.

“Blockchain Technology and Competition Policy – Issues paper by the Secretariat,” OECD, June 8, 2018.

  • This OECD issues paper poses two key questions about how blockchain technology might increase the relevance of new disclosures practices:
    • “Should competition agencies be given permission to access blockchains? This might enable them to monitor trading prices in real-time, spot suspicious trends, and, when investigating a merger, conduct or market have immediate access to the necessary data without needing to impose burdensome information requests on parties.”
    • “Similarly, easy access to the information on a blockchain for a firm’s owners and head offices would potentially improve the effectiveness of its oversight on its own subsidiaries and foreign holdings. Competition agencies may assume such oversight already exists, but by making it easier and cheaper, a blockchain might make it more effective, which might allow for more effective centralised compliance programmes.”

Michael Pisa and Matt Juden. “Blockchain and Economic Development: Hype vs. Reality.” Center for Global Development Policy Paper, 2017.

  • In this Center for Global Development Policy Paper, the authors examine blockchain’s potential to address four major development challenges: (1) facilitating faster and cheaper international payments, (2) providing a secure digital infrastructure for verifying identity, (3) securing property rights, and (4) making aid disbursement more secure and transparent.
  • The authors conclude that while blockchain may be well suited for certain use cases, the majority of constraints in blockchain-based projects fall outside the scope of technology. Common constraints such as data collection and privacy, governance, and operational resiliency must be addressed before blockchain can be successfully implemented as a solution.

Industry-Specific Case Studies

Chohan, Usman. “Blockchain and the Extractive Industries: Cobalt Case Study,” University of New South Wales, Canberra Discussion Paper Series: Notes on the 21st Century, 2018.

  • In this discussion paper, the author studies the pilot use of blockchain in cobalt mining industry in the Democratic Republic of Congo (DRC). The project tracked the movement of cobalt from artisanal mines through its installation in devices such as smartphones and electric cars.
  • The project records cobalt attributes – weights, dates, times, images, etc. – into the digital ledger to help ensure that cobalt purchases are not contributing to forced child labor or conflict minerals. 

Chohan, Usman. “Blockchain and the Extractive Industries #2: Diamonds Case Study,” University of New South Wales, Canberra Discussion Paper Series: Notes on the 21st Century, 2018.

  • The second case study from Chohan investigates the application of blockchain technology in the extractive industry by studying Anglo-American (AAL) diamond DeBeer’s unit and Everledger’s blockchain projects. 
  • In this study, the author finds that AAL uses blockchain to track gems (carat, color, certificate numbers), starting from extraction and onwards, including when the gems change hands in trade transaction.
  • Like the cobalt pilot, the AAL initiative aims to help avoid supporting conflicts and forced labor, and to improve trading accountability and transparency more generally.

The Challenge for Business and Society: From Risk to Reward

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Book by Stanley Litow that seeks to provide “A roadmap to improve corporate social responsibility”:  “The 2016 U.S. Presidential Campaign focused a good deal of attention on the role of corporations in society, from both sides of the aisle. In the lead up to the election, big companies were accused of profiteering, plundering the environment, and ignoring (even exacerbating) societal ills ranging from illiteracy and discrimination to obesity and opioid addiction. Income inequality was laid squarely at the feet of us companies. The Trump administration then moved swiftly to scrap fiscal, social, and environmental rules that purportedly hobble business, to redirect or shut down cabinet offices historically protecting the public good, and to roll back clean power, consumer protection, living wage, healthy eating initiatives and even basic public funding for public schools. To many eyes, and the lens of history, this may usher in a new era of cowboy capitalism with big companies, unfettered by regulation and encouraged by the presidential bully pulpit, free to go about the business of making money—no matter the consequences to consumers and the commonwealth. While this may please some companies in the short term, the long term consequences might result in just the opposite.

And while the new administration promises to reduce “foreign aid” and the social safety net, Stanley S. Litow believes big companies will be motivated to step up their efforts to create jobs, reduce poverty, improve education and health, and address climate change issues — both domestically and around the world. For some leaders in the private sector this is not a matter of public relations or charity. It is integral to their corporate strategy—resulting in creating new markets, reducing risks, attracting and retaining top talent, and generating growth and realizing opportunities. Through case studies (many of which the author spearheaded at IBM), The Challenge for Business and Society provides clear guidance for companies to build their own corporate sustainability and social responsibility plans positively effecting their bottom lines producing real return on their investments….(More).

Navigation by Judgment: Why and When Top Down Management of Foreign Aid Doesn’t Work

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Book by Dan Honig: “Foreign aid organizations collectively spend hundreds of billions of dollars annually, with mixed results. Part of the problem in these endeavors lies in their execution. When should foreign aid organizations empower actors on the front lines of delivery to guide aid interventions, and when should distant headquarters lead?

In Navigation by Judgment, Dan Honig argues that high-quality implementation of foreign aid programs often requires contextual information that cannot be seen by those in distant headquarters. Tight controls and a focus on reaching pre-set measurable targets often prevent front-line workers from using skill, local knowledge, and creativity to solve problems in ways that maximize the impact of foreign aid. Drawing on a novel database of over 14,000 discrete development projects across nine aid agencies and eight paired case studies of development projects, Honig concludes that aid agencies will often benefit from giving field agents the authority to use their own judgments to guide aid delivery. This “navigation by judgment” is particularly valuable when environments are unpredictable and when accomplishing an aid program’s goals is hard to accurately measure.

Highlighting a crucial obstacle for effective global aid, Navigation by Judgment shows that the management of aid projects matters for aid effectiveness….(More)”.

If, When and How Blockchain Technologies Can Provide Civic Change

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By Stefaan G. Verhulst and Andrew Young

The hype surrounding the potential of blockchain technologies– the distributed ledger technology (DLT) undergirding cryptocurrencies like Bitcoin – to transform the way industries and sectors operate and exchange records is reaching a fever pitch.

Gartner Hype Cycle

Source: Top Trends in the Gartner Hype Cycle for Emerging Technologies, 2017

Governments and civil society have now also joined the quest and are actively exploring the potential of DLTs to create transformative social change. Experiments are underway to leverage blockchain technologies to address major societal challenges – from homelessness in New York City to the Rohyingya crisis in Myanmar to government corruption around the world. At the same time, a growing backlash to the newest ‘shiny object’ in the technology for good space is gaining ground.   

At this year’s The Impacts of Civic Technology Conference (TICTeC), organized by mySociety in Lisbon, the GovLab’s Stefaan Verhulst and Andrew Young joined the Engine Room’s Nicole Anand, the Natural Resource Governance Institute’s Anders Pedersen, and ITS-Rio’s Marco Konopacki to consider whether or not Blockchain can truly deliver on its promise for creating civic change.

For the GovLab’s contribution to the panel, we shared early findings from our Blockchange: Blockchain for Social Change initiative. Blockchange, funded by the Rockefeller Foundation, seeks to develop a deeper understanding of the promise and practice of DLTs tin addressing public problems – with a particular focus on the lack, the role and the establishment of trusted identities – through a set of detailed case-studies. Such insights may help us develop operational guidelines on when blockchain technology may be appropriate and what design principles should guide the future use of DLTs for good.

Our presentation covered four key areas (Full presentation here):

  1. The evolving package of attributes present in Blockchain technologies: on-going experimentation, development and investment has lead to the realization that there is no one blockchain technology. Rather there are several variations of attributes that provide for different technological scenarios. Some of these attributes remain foundational -– such as immutability, (guaranteed) integrity, and distributed resilience – while others have evolved as optional including disintermediation, transparency, and accessibility. By focusing on the attributes we can transcend the noise that is emerging from having too many well funded start-ups that seek to pitch their package of attributes as the solution;Attributes of DLT
  2. The three varieties of Blockchain for social change use cases: Most of the pilots and use cases where DLTs are being used to improve society and people’s lives can be categorized along three varieties of applications:
    • Track and Trace applications. For instance: 
      1. Versiart creates verifiable, digital certificates for art and collectibles which helps buyers ensure each piece’s provenance.
      2. Grassroots Cooperative along with Heifer USA created a blockchain-powered app that allows every package of chicken marketed and sold by Grassroots to be traced on the Ethereum blockchain.
      3. Everledger works with stakeholders across the diamond supply chain to track diamonds from mine to store.
      4. Ripe is working with Sweetgreen to use blockchain and IoT sensors to track crop growth, yielding higher-quality produce and providing better information for farmers, food distributors, restaurants, and consumers.    
    • Smart Contracting applications. For instance:
      1. In Indonesia, Carbon Conservation and Dappbase have created smart contracts that will distribute rewards to villages that can prove the successful reduction of incidences of forest fires.
      2. Alice has built Ethereum-based smart contracts for a donation project that supports 15 homeless people in London. The smart contracts ensure donations are released only when pre-determined project goals are met.
      3. Bext360 utilizes smart contracts to pay coffee farmers fairly and immediately based on a price determined through weighing and analyzing beans by the Bext360 machine at the source.  
    • Identity applications. For instance:
      1. The State of Illinois is working with Evernym to digitize birth certificates, thus giving individuals a digital identity from birth.
      2. BanQu creates an economic passport for previously unbanked populations by using blockchain to record economic and financial transactions, purchase goods, and prove their existence in global supply chains.
      3. In 2015, AID:Tech piloted a project working with Syrian refugees in Lebanon to distribute over 500 donor aid cards that were tied to non-forgeable identities.
      4. uPort provides digital identities for residents of Zug, Switzerland to use for governmental services.

Three Blockchange applications

  1. The promise of trusted Identity: the potential to establish a trusted identity turns out to be foundational for using blockchain technologies for social change. At the same time identity emerges from a process (involving, for instance, provisioning, authentication, administration, authorization and auditing) and it is key to assess at what stage of the ID lifecycle DLTs provide an advantage vis-a-vis other ID technologies; and how the maturity of the blockchain technology toward addressing the ID challenge. 

ID Lifecycle and DLT

  1. Finally, we seek to translate current findings into
    • Operational conditions that can enable the public and civic sector at-large to determine when “to blockchain” including:
      • The need for a clear problem definition (as opposed to certain situations where DLT solutions are in search of a problem);
      • The presence of information asymmetries and high transaction costs incentivize change. (“The Market of Lemons” problem);
      • The availability of (high quality) digital records;
      • The lack of availability of credible and alternative disclosure technologies;
      • Deficiency (or efficiency) of (trusted) intermediaries in the space.
    • Design principles that can increase the likelihood of societal benefit when using Blockchain for identity projects (see picture) .

Design Principles

In the coming months, we will continue to share our findings from the Blockchange project in a number of forms – including a series of case studies, additional presentations and infographics, and an operational field guide for designing and implementing Blockchain projects to address challenges across the identity lifecycle.

The GovLab, in collaboration with the National Resource Governance Institute, is also delighted to announce a new initiative aimed at taking stock of the promise, practice and challenge of the use of Blockchain in the extractives sector. The project is focused in particular on DLTs as they relate to beneficial ownership, licensing and contracting transparency, and commodity trading transparency. This fall, we will share a collection of Blockchain for extractives case studies, as well as a report summarizing if, when, and how Blockchain can provide value across the extractives decision chain.

If you are interested in collaborating on our work to increase our understanding of Blockchain’s real potential for social change, or if you have any feedback on this presentation of early findings, please contact [email protected].

 

Can government stop losing its mind?

Curated on Posted on by Stefaan Verhulst

Report by Gavin Starks: “Can government remember? Is it condemned to repeat mistakes? Or does it remember too much and so see too many reasons why anything new is bound to fail?

While we are at the beginnings of a data revolution, we are also at a point where the deluge of data is creating the potential for an ‘information collapse’ in complex administrations: structured information and knowledge is lost in the noise or, worse, misinformation rises as fact.

There are many reasons for this: the technical design of systems, turnover of people, and contracting out. Information is stored in silos and often guarded jealously. Cultural and process issues lead to poor use of technologies. Knowledge is both formal (codified) and informal (held in people’s brains). The greatest value will be unlocked by combining these with existing and emerging tools.

This report sets out how the public sector could benefit from a federated, data-driven approach: one that provides greater power to its leaders, benefits its participants and users, and improves performance through better use of, and structured access to, data.

The report explores examples from the Open Data Institute, Open Banking Standard, BBC Archives, Ministry of Justice, NHS Blood and Transplant, Defence Science and Technology Laboratory and Ministry of Defence.

Recommendations:

  1. Design for open; build for search
  2. Build reciprocity into data supply chains
  3. Develop data ethics standards that can evolve at pace
  4. Create a Digital Audit Office
  5. Develop and value a culture of network thinking

To shorten the path between innovation and policy in a way that is repeatable and scalable, the report proposes six areas of focus be considered in any implementation design.

  1. Policy Providing strategic leadership and governance; framing and analysing economic, legal and regulatory impacts (e.g. GDPR, data ethics, security) and highlighting opportunities and threats.
  2. Culture Creating compelling peer, press and public communication and engagement that both address concerns and inspire people to engage in the solutions.
  3. Making Commissioning startups, running innovation competitions and programmes to create practice-based evidence that illustrates the challenges and business opportunities.
  4. Learning Creating training materials that aid implementation and defining evidence-based sustainable business models that are anchored around user-needs.
  5. Standards Defining common human and machine processes that enable both repeatability and scale within commercial and non-commercial environments.
  6. Infrastructure Defining and framing how people and machines will use data, algorithms and open APIs to create sustainable impact….(More)”.

A Race to the Top? The Aid Transparency Index and the Social Power of Global Performance Indicators

Curated on Posted on by Stefaan Verhulst

Paper by Dan Honig and Catherine Weaver: “Recent studies on global performance indicators (GPIs) reveal the distinct power that non-state actors can accrue and exercise in world politics. How and when does this happen? Using a mixed-methods approach, we examine the impact of the Aid Transparency Index (ATI), an annual rating and rankings index produced by the small UK-based NGO Publish What You Fund.

The ATI seeks to shape development aid donors’ behavior with respect to their transparency – the quality and kind of information they publicly disclose. To investigate the ATI’s effect, we construct an original panel dataset of donor transparency performance before and after ATI inclusion (2006-2013) to test whether, and which, donors alter their behavior in response to inclusion in the ATI. To further probe the causal mechanisms that explain variations in donor behavior we use qualitative research, including over 150 key informant interviews conducted between 2010-2017.

Our analysis uncovers the conditions under which the ATI influences powerful aid donors. Moreover, our mixed methods evidence reveals how this happens. Consistent with Kelley & Simmons’ central argument that GPIs exercise influence via social pressure, we find that the ATI shapes donor behavior primarily via direct effects on elites: the diffusion of professional norms, organizational learning, and peer pressure….(More)”.

Austin is piloting blockchain to improve homeless services

Curated on Posted on by Stefaan Verhulst

Danny Crichton at TechCrunch: “While the vagaries of the cryptocurrency markets are keeping crypto traders glued to their CoinDesk graphs, the real potential of blockchain is its capability to solve real human challenges in a decentralized, private, and secure way. Government officials have increasingly investigated how blockchain might solve critical problems, but now one city intends to move forward with an actual implementation.

The city of Austin is piloting a new blockchain platform to improve identity services for its homeless population, as part of a competitive grant awarded by the Mayor’s Challenge program sponsored by Bloomberg Philanthropies. Austin was one of 35 cities to be awarded pilot grants, and the top city from that group will ultimately be awarded $5 million….

The city wanted to improve the ability of its patchwork of government and private homeless service providers to offer integrated and comprehensive aid. There are a number of separate challenges here: verifying the identity of a person seeking help, knowing what care that individual has previously received, and empowering the individual to “own” their own records, and ultimately, their destiny.

The goal of the city’s blockchain pilot program is to consolidate the identity and vital records of each homeless person in a safe and confidential way while providing a means for service providers to access that information. Adler explained that “there are all kinds of confidentiality issues that arise when you try to do that, so the thought was that blockchain would allow us to bridge that need.”

By using blockchain, the hope is that the city could replace paper records, which are hard to manage, with electronic encrypted records that would be more reliable and secure. In addition, the blockchain platform could create a decentralized authentication mechanism to verify a particular person’s identity. For instance, a homeless services worker operating in the field could potentially use their mobile device to verify a person live, without having to bring someone back to an office for processing.

More importantly, vital records on the blockchain could build over time, so different providers would know what services a person had used previously. Majid provided the example of health care, where it is crucially important to know the history of an individual. The idea is that, when a homeless person walks into a clinic, the blockchain would provide the entire patient history of that individual to the provider. “Here was your medical records from your last clinic visits, and we can build off the care that you were given last time,” he said. Austin is partnering with the Dell Medical School at the University of Texas to work out how best to implement the blockchain for medical professionals….(More)”.

Inside the Jordan refugee camp that runs on blockchain

Curated on Posted on by Stefaan Verhulst

Russ Juskalian at MIT Tech Review: “…Though Bassam may not know it, his visit to the supermarket involves one of the first uses of blockchain for humanitarian aid. By letting a machine scan his iris, he confirmed his identity on a traditional United Nations database, queried a family account kept on a variant of the Ethereum blockchain by the World Food Programme (WFP), and settled his bill without opening his wallet.

Started in early 2017, Building Blocks, as the program is known, helps the WFP distribute cash-for-food aid to over 100,000 Syrian refugees in Jordan. By the end of this year, the program will cover all 500,000 refugees in the country. If the project succeeds, it could eventually speed the adoption of blockchain technologies at sister UN agencies and beyond.

Building Blocks was born of a need to save money. The WFP  helps feed 80 million people around the globe, but since 2009 the organization has shifted from delivering food to transferring money to people who need food. This approach could feed more people, improve local economies, and increase transparency. But it also introduces a notable point of inefficiency: working with local or regional banks. For the WFP, which transferred over $1.3 billion in such benefits in 2017 (about 30 percent of its total aid), transaction and other fees are money that could have gone to millions of meals. Early results of the blockchain program touted a 98 percent reduction in such fees.

And if the man behind the project, WFP executive Houman Haddad, has his way, the blockchain-based program will do far more than save money. It will tackle a central problem in any humanitarian crisis: how do you get people without government identity documents or a bank account into a financial and legal system where those things are prerequisites to getting a job and living a secure life?

Haddad imagines Bassam one day walking out of Zaatari with a so-called digital wallet, filled with his camp transaction history, his government ID, and access to financial accounts, all linked through a blockchain-based identity system. With such a wallet, when Bassam left the camp he could much more easily enter the world economy. He would have a place for an employer to deposit his pay, for a mainstream bank to see his credit history, and for a border or immigration agent to check his identity, which would be attested to by the UN, the Jordanian government, and possibly even his neighbors….

But because Building Blocks runs on a small, permissioned blockchain, the project’s scope and impact are narrow. So narrow that some critics say it’s a gimmick and the WFP could just as easily use a traditional database. Haddad acknowledges that—“Of course we could do all of what we’re doing today without using blockchain,” he says. But, he adds, “my personal view is that the eventual end goal is digital ID, and beneficiaries must own and control their data.”

Other critics say blockchains are too new for humanitarian use. Plus, it’s ethically risky to experiment with vulnerable populations, says Zara Rahman, a researcher based in Berlin at the Engine Room, a nonprofit group that supports social-change organizations in using technology and data. After all, the bulk collection of identifying information and biometrics has historically been a disaster for people on the run….(More)”.