“We need more courage for transparency and technology”

Mountains of files, bureaucratic processes, endless processing times: the democratic right of citizens to control the administration only exists on paper. In reality, it is a rocky road to get insights into the administrative processes in Germany. A technology that is too often reduced to cryptocurrencies, the distributed ledger technology, could provide a remedy. At the instigation of the FDP parliamentary group, the Office for Technology Assessment at the German Bundestag published a report on the opportunities and risks of artificial intelligence and distributed ledger technology (DLT) in public administration. The report was tabled in the German Bundestag on Thursday. The results are revealing.

Decentralized register management and types of DLT

DLT – or blockchain technology – describes a type of decentralized register management. The registry is stored on multiple nodes. Anyone can view the database and make register entries on public DLTs. This only seems appropriate for the administration in a few cases. Not because everyone can see the database, but can change it. Because the data stored on the DLT can be viewed by everyone, but not necessarily readable, since the data can be stored in encrypted form. On private DLTs, only a limited group of actors can view and change the database. A mixed form are so-called public permissioned networks, which represent publicly accessible databases with limited write permission. The last two types probably come primarily into consideration for administrative processes. The Office for Technology Assessment highlights the potential of DLT for administration. It can advance the automation of the registers at all administrative levels and thus increase transparency and efficiency in the registers. In public administration, many institutions at different administrative levels are often involved in maintaining registers. In standardized processes, data is used and changed, but not exchanged. An elegant use case for DLT solutions, as these are characterized by manipulation resistance and non-repudiation.

Enough theory, concrete applications

DLT applications can optimize many complex, previously paper-based processes in public administration and implement the verification of documents faster and more securely with fewer resources. In procurement, for example, compliance with and observance of human rights and environmental standards could be checked and payment initiated only if compliance is observed. The DLT ensures data integrity and automation; however, the integrity of the data source must be guaranteed. Notarial powers of attorney and certificates of inheritance could be issued via DLT and in this way it could be determined without a doubt whether a power of attorney or a certificate of inheritance is still valid at the given point in time.

German authorities are lagging behind

If you ask the German authorities, there is no such potential. In the Germany-wide official survey “Future Panel State & Administration”, a third of those questioned stated that they were unable to assess DLT. The highest decision-makers and authorities were questioned. The DLT was attested to be of low relevance at all administrative levels. Other countries are more advanced here and are already running pilot projects. For example, the e-identity in Estonia is not based on DLT, it has existed since 2002, but in the DLT-like application e-Estonia public administrative services are offered in digitized form. Estonians can already take part in electronic elections, register their place of residence digitally or register a car without going to the office. 95% of tax returns in Estonia are filed digitally and it takes three minutes on average. When the tax return is due every year, taxpayers in Germany would dream of it.

From education to football to cadastre

The Maltese Ministry of Education relies on a DLT solution for the verification of final diplomas and certificates. Participating institutions receive digital keys and it is registered on the blockchain that only they can issue certificates. Users receive a digital identity and can share their certificates via a (free) app. In Groningen, Netherlands, vouchers for low-income citizens are processed via a Zcash blockchain solution. Transactions are checked for validity using zero-knowledge mechanisms without revealing information about the identities of the partners involved. In Sweden, the land register and cadastre are implemented using DLT. Data such as purchase contracts or transfers of ownership are stored in the blockchain and can be viewed by the public. After all: In Germany, too, the coalition has agreed in the coalition agreement on a feasibility study for a land register on blockchain.

Use public infrastructure instead of digitizing the administration in a planned economy

Instead of relying on a lively developer community in the blockchain area, the last government gave us the online access network (OZG) in 2017. By the end of 2022, 575 administrative services should be available digitally. In August, 49 of these services were fully digitized, and 207 services have the “maturity level of a PDF file”. The reason for this is communal back and forth and probably also the reactance of the authorities, who are only too reluctant to do without their traditional working methods. We need an administrative modernization offensive and more courage for transparency, more courage for technology. Blockchain technology can offer an entry point for this.

Above

Frank Schäffler is a member of the Bundestag for the Free Democratic Party (FDP) and managing director of the Berlin think tank Prometheus – The Freedom Institute. Frank Schäffler is a member of the Budget Committee, the Committee for Digital Affairs and spokesman for FinTech and blockchain innovations of the FDP parliamentary group.