When Will We Begin to Trust the Government?
Indo American Society
Main page Opinion, Fintech, Tech, Blockchain, Opinion

Trust and state — at first glance, there is a gap between these concepts, however, in this article, I will argue that these concepts are inseparably connected.

Moreover, ensuring the trust is a key function of the state, which acts as its direct guarantor. The principles for the implementation of this function are fixed and guaranteed in the main legislative document of the state - the constitution.

Increasingly, these theses are valid in the framework of the utopian construction of society. However, thanks to the technologies that have become available to humanity in the 21st century, there is a real opportunity to build a bridge of trust through the abyss of conflicts of interests between the state and the individual.

What the authorities do wrong and why we don’t trust them? These questions we’ll leave to political analysts. My goal is to convey what trust is in general, to understand what prevents the introduction of innovations in political processes and how life within the state will change with the implementation of technologies that are able to ensure the transparency of governance mechanisms.

Trust is a beachhead for prosperity

Trust is the certainty that the interaction between people and/or social institutions will lead to the result that was expected by the parties and guaranteed by social contracts. That is, to the word “trust” you can pick up a synonym for “subjective confidence.” When projecting this concept on the relationship between a person and the state, it can be assumed that for a person, a necessary condition is banal predictability in the actions of politicians and public institutions.

Simply put, as a participant in the standard household process, such as shopping, you are sure that when making purchases, the cashier will give you a change. Similarly, it should work, at the state level: voting should be transparent when paying taxes, there must be confidence that these funds will be sent to the country budget, if you execute documents, then without corruption schemes. Such a model will not only provide comfortable living conditions for people but will also increase the efficiency of state institutions.

I’m sure everyone remembers the grand scandal called the “Panamanian archive” that raged violently in 2016. The confidential data leak from the archives of Mossack Fonseca law firm called into question the reputation of a dozen world politicians and even several presidents, revealing their fraudulent money laundering schemes and the billions of dollars worth of hidden property. As a result, rallies and protests were held around the world. For example, Icelandic residents demanded the resignation of the prime minister, the politician could not stand the pressure and left his post.

The consequences of the scandal were also numerous international sanctions that were imposed against persons whose names were indicated in the documents.

Thus, the image of political figures slid down, citizens began to be wary of public services and the credibility of the government was undermined. This is just one example of a thousand, which proves that a trusting attitude towards the state has a direct impact on social peace and stability in society.

The issue of the importance of trusting the authorities has also recently been raised at the Davos Forum by the Head of Blockchain committee, Sheila Warren. The representative of WEF is confident that now we are in a new reality and the situation with confidence will soon reach a critical apogee. It is worth noting that Warren speaks about the situation in the United States, where, according to her, citizens are rapidly losing confidence in both financial institutions and the state as a whole.

At the same time, the expert sees the light at the end of the tunnel and, judging by her post, you already understand what it is about. Confidence. Transparency. Blockchain.

Sheila believes that the blockchain technology is the best auditor of any process taking place in society. In her speech, she focused on the importance of technology implementation in areas such as tenders and government procurement, since these areas are at risk of introducing corruption schemes.

By the way, corruption is considered the Achilles heel of the American community. Based on a Gallup study, 75% of US citizens called this problem the most progressive. It is worth noting that this study was conducted in 2015, and since then, little has changed.

Therefore, the WEF Blockchain committee insists on the full digitalization of the state using trend technology, which is able to set up honest and transparent relationships in such a complex pair as citizen-state.

The corresponding survey was conducted among the participants of the WEF, most of whom are confident that the blockchain will become an integral element of the state infrastructure and it will be actively used by 2023. But are there any working solutions today?

Real transparent future examples

Despite the rather innovative ideas of the blockchain technology, many countries have already seen a huge potential in it and gradually introduce it to various areas: digital identification of citizens, health care, land, and other property management, as well as document management and administrative services.

The first thing the blockchain is capable of is to eliminate the redundant bureaucratic processes that are characteristic of all government systems.

The inevitable consequence of the complication of state mechanisms is the need for automated processes. This is due to the fact that the effectiveness of the state system directly depends on the speed of its internal processes.

I am sure that you have noticed a huge number of intermediaries that exist within the framework of the complex interaction of state institutions and citizens, what as a result influences the increase in time spent and the cost of providing the service. We are talking about the high cost of transaction costs in the supply chain of administrative services. Also undeniable is the fact that there is a problem of sharing information between government agencies, which complicates their work, entails the risk of data loss, and is also often a time-consuming process.

But times change, we change our requirements — now everything must be done quickly and efficiently. Thus, the state apparatus has no choice but to go for reforms or lose positions in the trust rating.

One of the pioneers in implementing the effective implementation of the blockchain was Estonia, known for its X-Road — unified state electronic infrastructure, which for many countries has become a benchmark. The Estonian government has decided to abandon the complex centralized system and transfers workflow and citizen data to a decentralized open environment. The first experiments with blockchain technology began in 2008, and since 2012, KSI Blockchain technology has been introduced, which is used to protect public registries in medical, judicial and legislative systems. In the future, it is planned to expand the use of technology in private medicine and national cybersecurity.

Already at the initial stages, it became clear to the international community on the example of Estonia that it is time to transform outdated systems. The same is confirmed by analytics: already in 2016, 94% of Estonians became owners of electronic ID-cards; the country managed to save 2% of GDP due to the abandonment of paperwork; during the first year of system operation, more than 4,000 public services are provided to citizens online; Estonia is the world leader in paying taxes, and also ranks first in the digital economy index.

As a result of this approach, it becomes clear that the state infrastructure can and should begin to develop much faster, introducing new services that are based on the principles of transparency and security, ensuring a high level of public confidence.

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