Blockchain technology as infrastructure in public sector

Abstract

The blockchain technology has evolved beyond traditional payment solutions in the finance sector and offers a potential for transforming many sectors including the public sector. The novel integration of technology and economy that open public blockchains have brought represents both challenges to and opportunities for enhancing digital public services. So far, the public sector has lagged behind other sectors in both research and exploration of this technology, but pilot cases show that there is a great potential for reforming and even transforming public service delivery. We argue that the open blockchain technology is best understood as a possible information infrastructure, given its universal, evolving, open and transparent nature. A comparison with Internet is meaningful despite obvious differences between the two. Based on some case studies, we have developed an analytical framework for better understanding the potential benefits as well as the existing challenges when introducing blockchain technology in the public sector.

New Kid On The Block! Understanding Blockchain Adoption in the Public Sector

“…Blockchain is heralded as a major disruptive technology, with "the capacity for reconfiguring all aspects of society and its operations" [1, p. ix]. In recent years, the technology has evolved beyond initial payment solutions in the financial sector and it is perceived as holding the promise of being transformative for a wide range of sectors, including the public sector [2], [3].…”

“…Furthermore, blockchain is believed to bring valuable opportunities for the improvement of core governmental activities such as digital ID management, secure record-keeping, and document handling. Not the least important, successful applications in the public sector hold the potential of stimulating development of blockchain applications across all industries, as many governments have high trust and a large user base [2].…”

“…Apart from the aforementioned market studies, few studies have been published on blockchain adoption in the public sector, and we have limited insight on the drivers and impediments to adoption. For instance, how is the adoption of blockchain applications influenced by the unique role of government as the legislative authority [2]? How do the factors of trust between blockchain partners, and resistance to blockchainimposed changes on the current role of government, influence adoption [8]?…”

“…Although the TOE framework includes multiple perspectives or 'contexts', blockchain applications have some special characteristics whose impact on adoption cannot easily be captured in either the T, O or E perspective. Specifically, blockchain applications always involve multiple parties in an interorganizational setting [8] [2], and the technology, as its core, has a built-in transaction verification and authentication mechanism that makes it "trust-free" [1]. As argued earlier, the public sector has a unique role as a trusted party, and blockchain's potential to support or challenge that role may very well have an impact on adoption.…”

Blockchain Mutability: Challenges and Proposed Solutions

“…In view of the above, the number of public authorities that have started exploring the use of blockchain for their administration and services is rising [109], [110], [111]. In 2017, DG TAXUD, the EU General Directorate responsible for EU policies on taxation and customs, started exploring blockchain technology within the customs domain [112], while a year ago 21 EU Member States plus Norway agreed to sign a declaration creating the European Blockchain Partnership (EBP) and to cooperate in the establishment of a European Blockchain Services Infrastructure (EBSI) that will support the delivery of cross-border digital public services [113].…”