Report by the OECD: This report provides an overview of the state of open data policies across OECD member and partner countries, based on data collected through the OECD Open Government Data survey (2013, 2014, 2016/17), country reviews and comparative analysis. The report analyses open data policies using an analytical framework that is in line with the OECD OUR data Index and the International Open Data Charter. It assesses governments’ efforts to enhance the availability, accessibility and re-use of open government data. It makes the case that beyond countries’ commitment to open up good quality government data, the creation of public value requires engaging user communities from the entire ecosystem, such as journalists, civil society organisations, entrepreneurs, major tech private companies and academia. The report also underlines how open data policies are elements of broader digital transformations, and how public sector data policies require interaction with other public sector agendas such as open government, innovation, employment, integrity, public budgeting, sustainable development, urban mobility and transport. It stresses the relevance of measuring open data impacts in order to support the business case for open government data….(More)”.
What is the true value of data? New series on the return on investment of data interventions
Case studies prepared by Jessica Espey and Hayden Dahmm for SDSN TReNDS: “But what is the ROI of investing in data for altruistic means–e.g., for sustainable development?
Today, we are launching a series of case studies to answer this question in collaboration with the Global Partnership on Sustainable Development Data. The ten examples we will profile range from earth observation data gathered via satellites to investments in national statistics systems, with costs from just a few hundred thousand dollars (US) per year to millions over decades.
The series includes efforts to revamp existing statistical systems. It also supports the growing movement to invest in less traditional approaches to data collection and analysis beyond statistical systems–such as through private sector data sources or emerging technologies enabled by the growth of the information and communications technology (ICT) sector.
Some highlights from the first five case studies–available now:
An SMS-based system called mTRAC, implemented in Uganda, has supported significant improvements in the country’s health system–including halving of response time to disease outbreaks and reducing medication stock-outs, the latter of which resulted in fewer malaria-related deaths.
NASA’s and the U.S. Geological Survey’s Landsat program–satellites that provide imagery known as earth observation data–is enabling discoveries and interventions across the science and health sectors, and provided an estimated worldwide economic benefit as high as US$2.19 billion as of 2011.
BudgIT, a civil society organization making budget data in Nigeria more accessible to citizens through machine-readable PDFs and complementary online/offline campaigns, is empowering citizens to partake in the federal budget process.
International nonprofit BRAC is ensuring mothers and infants in the slums of Bangladesh are not left behind through a data-informed intervention combining social mapping, local censuses, and real-time data sharing. BRAC estimates that from 2008 to 2017, 1,087 maternal deaths were averted out of the 2,476 deaths that would have been expected based on national statistics.
Atlantic City police are developing new approaches to their patrolling, community engagement, and other activities through risk modeling based on crime and other data, resulting in reductions in homicides and shooting injuries (26 percent) and robberies (37 percent) in just the first year of implementation….(More)”.
Multistakeholder Governance and Democracy: A Global Challenge
Book by Harris Gleckman: “Multistakeholder governance is proposed as the way forward in global governance. For some leaders in civil society and government who are frustrated with the lack of power of the UN system and multilateralism it is seen as an attractive alternative; others, particularly in the corporate world, see multistakeholder governance as offering a more direct hand and potentially a legitimate role in national and global governance.
This book examines how the development of multistakeholderism poses a challenge to multilateralism and democracy. Using a theoretical, historical perspective it describes how the debate on global governance evolved and what working principles of multilateralism are under threat. From a sociological perspective, the book identifies the organizational beliefs of multistakeholder groups and the likely change in the roles that leaders in government, civil society, and the private sector will face as they evolve into potential global governors. From a practical perspective, the book addresses the governance issues which organizations and individuals should assess before deciding to participate in or support a particular multistakeholder group.
Given the current emphasis on the participation of multiple actors in the Sustainable Development Goals, this book will have wide appeal across policy-making and professional sectors involved in negotiations and governance at all levels. It will also be essential reading for students studying applied governance….(More)”.
Reflecting the Past, Shaping the Future: Making AI Work for International Development
USAID Report: “We are in the midst of an unprecedented surge of interest in machine learning (ML) and artificial intelligence (AI) technologies. These tools, which allow computers to make data-derived predictions and automate decisions, have become part of daily life for billions of people. Ubiquitous digital services such as interactive maps, tailored advertisements, and voice-activated personal assistants are likely only the beginning. Some AI advocates even claim that AI’s impact will be as profound as “electricity or fire” that it will revolutionize nearly every field of human activity. This enthusiasm has reached international development as well. Emerging ML/AI applications promise to reshape healthcare, agriculture, and democracy in the developing world. ML and AI show tremendous potential for helping to achieve sustainable development objectives globally. They can improve efficiency by automating labor-intensive tasks, or offer new insights by finding patterns in large, complex datasets. A recent report suggests that AI advances could double economic growth rates and increase labor productivity 40% by 2035. At the same time, the very nature of these tools — their ability to codify and reproduce patterns they detect — introduces significant concerns alongside promise.
In developed countries, ML tools have sometimes been found to automate racial profiling, to foster surveillance, and to perpetuate racial stereotypes. Algorithms may be used, either intentionally or unintentionally, in ways that result in disparate or unfair outcomes between minority and majority populations. Complex models can make it difficult to establish accountability or seek redress when models make mistakes. These shortcomings are not restricted to developed countries. They can manifest in any setting, especially in places with histories of ethnic conflict or inequality. As the development community adopts tools enabled by ML and AI, we need a cleareyed understanding of how to ensure their application is effective, inclusive, and fair. This requires knowing when ML and AI offer a suitable solution to the challenge at hand. It also requires appreciating that these technologies can do harm — and committing to addressing and mitigating these harms.
ML and AI applications may sometimes seem like science fiction, and the technical intricacies of ML and AI can be off-putting for those who haven’t been formally trained in the field. However, there is a critical role for development actors to play as we begin to lean on these tools more and more in our work. Even without technical training in ML, development professionals have the ability — and the responsibility — to meaningfully influence how these technologies impact people.
You don’t need to be an ML or AI expert to shape the development and use of these tools. All of us can learn to ask the hard questions that will keep solutions working for, and not against, the development challenges we care about. Development practitioners already have deep expertise in their respective sectors or regions. They bring necessary experience in engaging local stakeholders, working with complex social systems, and identifying structural inequities that undermine inclusive progress. Unless this expert perspective informs the construction and adoption of ML/AI technologies, ML and AI will fail to reach their transformative potential in development.
This document aims to inform and empower those who may have limited technical experience as they navigate an emerging ML/AI landscape in developing countries. Donors, implementers, and other development partners should expect to come away with a basic grasp of common ML techniques and the problems ML is uniquely well-suited to solve. We will also explore some of the ways in which ML/AI may fail or be ill-suited for deployment in developing-country contexts. Awareness of these risks, and acknowledgement of our role in perpetuating or minimizing them, will help us work together to protect against harmful outcomes and ensure that AI and ML are contributing to a fair, equitable, and empowering future…(More)”.
Satellites can advance sustainable development by highlighting poverty
Cordis: “Estimating poverty is crucial for improving policymaking and advancing the sustainability of a society. Traditional poverty estimation methods such as household surveys and census data incur huge costs however, creating a need for more efficient approaches.
With this in mind, the EU-funded USES project examined how satellite images could be used to estimate household-level poverty in rural regions of developing countries. “This promises to be a radically more cost-effective way of monitoring and evaluating the Sustainable Development Goals,” says Dr Gary Watmough, USES collaborator and Interdisciplinary Lecturer in Land Use and Socioecological Systems at the University of Edinburgh, United Kingdom.
Land use and land cover reveal poverty clues
To achieve its aims, the project investigated how land use and land cover information from satellite data could be linked with household survey data. “We looked particularly at how households use the landscape in the local area for agriculture and other purposes such as collecting firewood and using open areas for grazing cattle,” explains Dr Watmough.
The work also involved examining satellite images to determine which types of land use were related to household wealth or poverty using statistical analysis. “By trying to predict household poverty using the land use data we could see which land use variables were most related to the household wealth in the area,” adds Dr Watmough.
Overall, the USES project found that satellite data could predict poverty particularly the poorest households in the area. Dr Watmough comments: “This is quite remarkable given that we are trying to predict complicated household-level poverty from a simple land use map derived from high-resolution satellite data.”
A study conducted by USES in Kenya found that the most important remotely sensed variable was building size within the homestead. Buildings less than 140 m2 were mostly associated with poorer households, whereas those over 140 m2 tended to be wealthier. The amount of bare ground in agricultural fields and within the homestead region was also important. “We also found that poorer households were associated with a shorter number of agricultural growing days,” says Dr Watmough….(More)”.
How games can help craft better policy
Shrabonti Bagchi at LiveMint: “I have never seen economists having fun!” Anantha K. Duraiappah, director of Unesco-MGIEP (Mahatma Gandhi Institute of Education for Peace and Sustainable Development), was heard exclaiming during a recent conference. The academics in question were a group of environmental economists at an Indian Society for Ecological Economics conference in Thrissur, Kerala, and they were playing a game called Cantor’s World, in which each player assumes the role of the supreme leader of a country and gets to decide the fate of his or her nation.
Well, it’s not quite as simple as that (this is not Settlers Of Catan!). Players have to take decisions on long-term goals like education and industrialization based on data such as GDP, produced capital, human capital, and natural resources while adhering to the UN’s sustainable development goals. The game is probably the most accessible and enjoyable way of seeing how long-term policy decisions change and impact the future of countries.
That’s what Fields Of View does. The Bengaluru-based non-profit creates games, simulations and learning tools for the better understanding of policy and its impact. Essentially, their work is to make sure economists like the ones at the Thrissur conference actually have some fun while thrashing out crucial issues of public policy.
A screen grab from ‘Cantor’s World’.
Can policymaking be made more relevant to the lives of people affected by it? Can policymaking be more responsive to a dynamic social-economic-environmental context? Can we reduce the time taken for a policy to go from the drawing board to implementation? These were some of the questions the founders of Fields Of View, Sruthi Krishnan and Bharath M. Palavalli, set out to answer. “There are no binaries in policymaking. There are an infinite set of possibilities,” says Palavalli, who was named an Ashoka fellow in May for his work at the intersection of technology, social sciences and design.
Earlier this year, Fields Of View organized a session of one of its earliest games, City Game, for a group of 300 female college students in Mangaluru. City Game is a multiplayer offline game designed to explore urban infrastructure and help groups and individual understand the dynamics of urban governance…(More)”.
How Mobile Network Operators Can Help Achieve the Sustainable Development Goals Profitably
Press Release: “Today, the Digital Impact Alliance (DIAL) released its second paper in a series focused on the promise of data for development (D4D). The paper, Leveraging Data for Development to Achieve Your Triple Bottom Line: Mobile Network Operators with Advanced Data for Good Capabilities See Stronger Impact to Profits, People and the Planet, will be presented at GSMA’s Mobile 360 Africa in Kigali.
“The mobile industry has already taken a driving seat in helping reach the Sustainable Development Goals by 2030 and this research reinforces the role mobile network operators in lower-income economies can play to leverage their network data for development and build a new data business safely and securely,” said Kate Wilson, CEO of the Digital Impact Alliance. “Mobile network operators (MNOs) hold unique data on customers’ locations and behaviors that can help development efforts. They have been reluctant to share data because there are inherent business risks and to do so has been expensive and time consuming. DIAL’s research illustrates a path forward for MNOs on which data is useful to achieve the SDGs and why acting now is critical to building a long-term data business.”
DIAL worked with Altai Consulting on both primary and secondary research to inform this latest paper. Primary research included one-on-one in-depth interviews with more than 50 executives across the data for development value chain, including government officials, civil society leaders, mobile network operators and other private sector representatives from both developed and emerging markets. These interviews help inform how operators can best tap into the shared value creation opportunities data for development provides.
Key findings from the in-depth interviews include:
- There are several critical barriers that have prevented scaled use of mobile data for social good – including 1) unclear market opportunities, 2) not enough collaboration among MNOs, governments and non-profit stakeholders and 3) regulatory and privacy concerns;
- While it may be an ideal time for MNOs to increase their involvement in D4D efforts given the unique data they have that can inform development, market shifts suggest the window of opportunity to implement large-scale D4D initiatives will likely not remain open for much longer;
- Mobile Network Operators with advanced data for good capabilities will have the most success in establishing sustainable D4D efforts; and as a result, achieving triple bottom line mandates; and
- Mobile Network Operators should focus on providing value-added insights and services rather than raw data and drive pricing and product innovation to meet the sector’s needs.
“Private sector data availability to drive public sector decision-making is a critical enabler for meeting SDG targets,” said Syed Raza, Senior Director of the Data for Development Team at the Digital Impact Alliance. “Our data for development paper series aims to elevate the efforts of our industry colleagues with the information, insights and tools they need to help drive ethical innovation in this space….(More)”.
Smart Cities: Digital Solutions for a More Livable Future
Report by the McKinsey Global Institute (MGI): “After a decade of experimentation, smart cities are entering a new phase. Although they are only one part of the full tool kit for making a city great, digital solutions are the most powerful and cost-effective additions to that tool kit in many years. This report analyzes dozens of current applications and finds that cities could use them to improve some quality-of-life indicators by 10–30 percent.It also finds that even the most cutting-edge smart cities on the planet are still at the beginning of their journey.
Smart cities add digital intelligence to existing urban systems, making it possible to do more with less. Connected applications put real-time, transparent information into the hands of users to help them make better choices. These tools can save lives, prevent crime, and reduce the disease burden. They can save time, reduce waste, and even help boost social connectedness. When cities function more efficiently, they also become more productive places to do business.
MGI assessed how dozens of current smart city applications could perform in three sample cities with varying legacy infrastructure systems and baseline starting points. We found that these tools could reduce fatalities by 8–10 percent, accelerate emergency response times by 20–35 percent, shave the average commute by 15–20 percent, lower the disease burden by 8–15 percent, and cut greenhouse gas emissions by 10–15 percent, among other positive outcomes.
Our snapshot of deployment in 50 cities around the world shows that wealthier urban areas are generally transforming faster, although many have low public awareness and usage of the applications they have implemented. Asian megacities, with their young populations of digital natives and big urban problems to solve, are achieving exceptionally high adoption. Measured against what is possible today, even the global leaders have more work to do in building out the technology base, rolling out the full range of possible applications, and boosting adoption and user satisfaction. Many cities have not yet implemented some of the applications that could have the biggest potential impact. Since technology never stands still, the bar will only get higher.
The public sector would be the natural owner of 70 percent of the applications we examined. But 60 percent of the initial investment required to implement the full range of applications could come from private actors. Furthermore, more than half of the initial investment made by the public sector could generate a positive return, whether in direct savings or opportunities to produce revenue.
The technologies analyzed in this report can help cities make moderate or significant progress toward 70 percent of the Sustainable Development Goals. Yet becoming a smart city is less effective as an economic development strategy for job creation. Smart cities may disrupt some industries even as they present substantial market opportunities. Customer needs will force a reevaluation of current products and services to meet higher expectations of quality, cost, and efficiency in everything from mobility to healthcare.
Smart city solutions will shift value across the landscape of cities and throughout value chains. Companies looking to enter smart city markets will need different skill sets, creative financing models, and a sharper focus on civic engagement.
Becoming a smart city is not a goal but a means to an end. The entire point is to respond more effectively and dynamically to the needs and desires of residents. Technology is simply a tool to optimize the infrastructure, resources, and spaces they share. Few cities want to lag behind, but it is critical not to get caught up in technology for its own sake. Smart cities need to focus on improving outcomes for residents and enlisting their active participation in shaping the places they call home….(More)”.
The 2018 Atlas of Sustainable Development Goals: an all-new visual guide to data and development
World Bank Data Team: “We’re pleased to release the 2018 Atlas of Sustainable Development Goals. With over 180 maps and charts, the new publication shows the progress societies are making towards the 17 SDGs.
It’s filled with annotated data visualizations, which can be reproducibly built from source code and data. You can view the SDG Atlas online, download the PDF publication (30Mb), and access the data and source code behind the figures.
This Atlas would not be possible without the efforts of statisticians and data scientists working in national and international agencies around the world. It is produced in collaboration with the professionals across the World Bank’s data and research groups, and our sectoral global practices.
Trends and analysis for the 17 SDGs
The Atlas draws on World Development Indicators, a database of over 1,400 indicators for more than 220 economies, many going back over 50 years. For example, the chapter on SDG4 includes data from the UNESCO Institute for Statistics on education and its impact around the world.
Throughout the Atlas, data are presented by country, region and income group and often disaggregated by sex, wealth and geography.
The Atlas also explores new data from scientists and researchers where standards for measuring SDG targets are still being developed. For example, the chapter on SDG14 features research led by Global Fishing Watch, published this year in Science. Their team has tracked over 70,000 industrial fishing vessels from 2012 to 2016, processed 22 billion automatic identification system messages to map and quantify fishing around the world….(More)”.
The GovLab Selected Readings on Blockchain Technologies and the Governance of Extractives
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 blockchange@thegovlab.org.
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:
- Blockchain Technologies and Extractives – Promise and Current Potential
- Blockchain Technologies and the Governance of Extractives
- Beneficial Ownership and Illicit Flows
- Land Registration, Licensing and Contracting Transparency
- Commodity Trading and Supply Chain Transparency
- Global Governance and Disclosure Practices
- Industry-Specific Case Studies
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.