DIGITAL DECENTRALIZED TRANSFER OF VALUE FOR THE PUBLIC SECTOR

 A playing field analysis: how can Distributed Ledger   Technologies like blockchain impact public values?

 Report written by Marlen Komorowski, Laurence Claeys &   Thomas van Dam

Data, records, and transactions define the structures in our public system. Yet these tools and the bureaucracies to manage these by  public institutions operate still much the same way as decades ago. At the same time, governments face challenges in the digital age and  find new ways in how to create trust in their systems while handling new societal challenges. Distributed ledger τechnology (DLT)  of which blockchain is one system has experienced in recent years a lot of attention as it offers new ways of bringing public services to citizens and businesses. Because of this, governments have started experimenting and investing in blockchain and DLT solutions for the public sector.

The OECD (2018) found already more than 200 government-led   blockchain initiatives in more than 40 different countries. To understand where applicability of blockchain should be considered, it is important to recognize that DLT can be seen as a form of “general purpose technology”. This is due to the infrastructural character of the   technology. This means that whether DLT or blockchain is a solution to a given problem in the public sector and can impact public value can only be answered on a case-to-case basis. In this report, we present a total of 21 DLT use cases associated to each of the Dutch ministries to show potential opportunities for application in different public sectors and services in the Netherlands.

The use cases analysed build the basis for a new decision-making   approach, in which we highlight the different steps that can be taken   by the government to identify application possibilities in the future.   Our  findings highlight, that DLT can have an impact on the following   public values:

• Strengthen democratic values;
• Increase public integrity;
• Collaboration; and
• Government efficiency.

Still, the future of DLT implementation is uncertain. DLT has currently a lot of limitations and immaturities. And DLT adoption depends highly on the organisational, societal, technological and ecosystem context in the Netherlands. Identifying the specific opportunities and barriers depend on each individual use case. DLT cannot replace all existing information systems in the public sector and many applications of DLT could also be implemented through a centralised solution. Which DLT application and design in which use cases should be adopted is a strategic decision and requires agreement and collaboration with local stakeholders, the Dutch government and public sector to cooperate and work together in the future.

Based on the findings in this report we give the following recommendations to the Dutch government:

1. The government should further investigate, and address barriers in the local context (i.e. legal framework, lack of skills in the government, the attitude of government staff and the government as well as a lack of capital and funding in the Netherlands) to enable and support blockchain solution development that strengthen public value. This needs to be always done in a way that takes into account the contribution to (or loss of) the public values of Dutch society.
2. The government should adopt an informed and strategic decision-making approach (decision-making matrix) to identify use cases for development in the Dutch public sector. This can be based on existing strong local networks and initiatives in the Netherlands (see ecosystem analysis) as well as successful use cases that have already been rolled out in other countries (see case study overview).
3. It is important to set up a discussion forum in the Netherlands where various stakeholders (with different types of expertise, background, experience and roles in the ecosystem) are involved in reaching a consensus on a vision on the role that DLT should play in the digital society and to decide whether DLT should become a theme in the existing or new strategies of the Dutch government.