Most public sector challenges arise out of deciding the most efficient resource allocation between competing options. Should the government spend more on education, healthcare or infrastructure projects? And even within a sector, what kind of resource allocation would make most sense?
Take healthcare as an example. Governments must decide if it is more prudent to spend money on maternal and child health services or on hospitals providing advanced care?
And if it decides to prioritise hospitals then which ones should be prioritised more than the others.
I spent four years helping to solve these problems for various governments in Pakistan. This was a particularly opportune time in the country because the economy had started showing substantial improvements and governments generally had more cash than ever before to spend on development projects. The mood across different provincial governments was to finally implement serious reforms.
There was a rather significant challenge though. They did not know where to start and what to prioritise. They say ideas are dime a dozen and this phrase truly manifested itself in what was happening in the corridors of power during that time. But the way I saw it, a large part of this lack of focus was a dearth of a consistent stream of reliable data in the sectors that the government wanted to reform.
The government had antiquated data systems in place with the officials having quite a low confidence in the accuracy of whatever data was being collected, especially in the healthcare and education sectors. Even when other ingredients (political will, resources to spend and governance structures etc.) to successfully carry out a large-scale reform effort were largely in place, the lack of reliable data made it difficult to decide which regions to focus on, which sub-sectors within the health and education sectors were performing better than the others and what should be the current benchmark of performance as well as the aspired level of success. If it wasn’t clear what the current levels of service delivery were, how could the government determine “what would success look like?”
The reason the service delivery data from rural clinics, hospitals, schools and colleges was so unreliable was because the reality would reflect badly on the performance of the local governments. The provincial government would then have a cause to make changes in the local bureaucracy, directly threatening their interests. The main issue was the ability of the local administration to game the data coming from facilities to show results that were better than the ground reality. We spent years in making data collection, monitoring and validation systems that used management, psychological and behavioural techniques to ensure the data being reported to the provincial governments was as accurate as possible. But with every new iteration of the system, the staff and local administration only found more novel ways of gaming the data.
This was a particularly unfortunate hurdle because in any large-scale reform effort, it takes years to setup and operationalise data systems that provide a somewhat reliable data stream for decision making. And by the time it starts gaining momentum, it’s time for the political government to head into the next election cycle and lose the focus.
Now consider an alternate scenario. Here, it is possible to record the data of citizens from the time of their birth, all through schooling to every time they interact with the healthcare providers, going into their adulthood and beyond. In this scenario, this sensitive data is kept safe, cannot be meddled around with, has safeguards in place to ensure its reliability, is being generated in real time and can be accessed by decision makers across the country to get the latest picture at any point in time.
The possibilities for reform are suddenly endless.
Such a system can be designed using private blockchains maintained by the government. The ability to have data reliably recorded (by mixing blockchain technology with practical techniques to ensure accuracy at first point of entry) and immutable while being accessible by a controlled network opens thousands of possibilities to design and implement reforms and do better performance management in the public sector. The advantages offered by the technology far outweigh the concerns and challenges in implementation (addressed later in the blog).
For example, such a system will provide a transparent look into which health clinics require more maternal and child care resources, which ones are not functioning properly, which schools have children showing up and what marks are being achieved by the students in their exams (to determine learning outcomes). Additionally, the government will reliably get insights into which hospitals generate more traffic, where are the patients coming from and where did these patients receive healthcare prior to coming to the hospital. If aggregated, this system will provide a very realistic look into the disease patterns and will allow in disease surveillance at a regional and national level, which in turn will allow more efficient allocation of resources year after year. Other application areas of private blockchains include citizenship records, national identity databases, border control, smuggling control and digital land ownership records (to name only a few).
It is possible that these advantages can be achieved through a carefully designed massive database as well. But the ability of blockchain to make data immutable is the biggest advantage it offers to governance in this context. That one feature, trumps everything else when it comes to improving the data required to govern better. Reliable data – the dream of every government in a developing country serious about undertaking reforms.
Thoughts on implementation
While the advantages are many and possibilities are endless, this vision comes laden with implementation challenges. That is why, it is important to think of such efforts with a multi-year time frame in mind, with implementation being broken down into carefully designed phases (probably initially targeting low hanging fruits to gain trust and show value to the system). This approach will also help mitigate the other challenges – a limited understanding of blockchain technology within political and bureaucratic leadership in developing countries and a limited supply of blockchain developers.
Overall, the growing use of blockchain technology presents promising opportunities for developing countries. But imagine a world where such comprehensive data systems are adopted. On the one hand, it’ll enable a drastically better allocation of resources, but on the other it’ll provide too much power to the governments. Now the question is, what will result in objectively improved lives for the citizens in developing countries? I leave it you to think about what the answer might be.
Author: Mustafa Bajwa
Strategy in the Age of Decentralization 