Blockchain technology improves public services and administrative efficiency, study shows

Blockchain technology has emerged as a disruptive application in all sectors. Blockchain is a distributed ledger that tracks a set of transactions in a decentralized, secure and transparent way in the form of a chain of blocks. It is often used as a broad term for a set of technologies. Previous studies have shown that blockchain technologies are a powerful, essential and effective lever for transforming government processes and procedures and improving management and public policy. Blockchain thus offers valuable opportunities to organizations: transparency, privacy, security, risk control, democratization and reliability.

To investigate the effects of using blockchain on key government functions, FGV EAESP researcher Maciel M. Queiroz, together with Samuel Fosso Wamba, Serge-Lopez Wamba-Taguimdje and Qihui Lu, wrote a study that was published in Government Information Quarterly in February 2024. To begin with, they selected 167 cases of blockchain projects in the public sector from a mapping exercise carried out by the Innovative Public Services Observatory (IPSO). They then performed exploratory analysis of the projects’ indicators to maximize the information obtained from the data. They also used an fsQCA approach – a method that identifies complex causal relationships between variables and can consequently identify the conditions that affect open government operational and administrative performance.

The researchers found concrete evidence of how blockchain enhances key functions of government and its subsectors, influencing the governance of public services, administrative efficiency and open government capacity, while driving innovation and improving operational and administrative performance. According to the study, the effects of blockchain are reduced bureaucracy, discretion and corruption; increased automation, transparency, auditing and accountability of information for the benefit of citizens and stakeholders; and increased trust among citizens and businesses in government processes.

One crucial contribution of blockchain is its ability to promote a citizen-centric agenda, transparent governance and a decentralized approach to development.

Despite these benefits, the research recognizes blockchain’s challenges, such as integration with existing systems, employee training and regulatory issues. This technology is in its early stages in the public sector, but its transformative potential is evident, as shown by systematic analysis and tangible examples in the study. In terms of administrative efficiency, blockchain reduces costs, improves the management of public resources, promotes the quality of processes, communication and collaboration, and reduces or eliminates corruption risks, promoting justice and equality.