Conversations around the role of technology in bettering government practices and economic systems seem to be increasingly gaining ground in developing and developed societies. This comes from the realization that human errors, prejudice, and personality differences, even in highly developed societies, have caused more harm than good. There is substantial evidence that technology has primarily improved public governance in democratic institutions, resulting in the widespread adoption of specific technologies. This progression hinges on the ability of technology to increase connectivity and its efficiency in the high computing of data with an upward curve in efficiency.
For developing countries, the adoption rate in technology for public governance is slightly sloppy compared to advanced countries. While it might be interesting to look for and into the reasons for developing countries' slow adoption rate, I'd rather not.
In Nigeria, for example, private citizens have a high adoption rate of blockchain technology. It is yet, ironic, that the laws governing involvement and participation in and around the Blockchain are deemed highly ambiguous. In this article and others after it, I will probe some current governmental practices vis-a-vis the Blockchain to highlight how the latter positively affects the former.
The Treasury single account and the Blockchain:
At the time of writing, the present government introduced the use of a single treasury account in Nigeria. However, as mentioned in the paragraphs before, this system which relies on technology, was already in practice in other countries buttressing the slow adoption rate of technology for public governance by developing countries or governments of developing countries. A treasury single account system (TSA) implies the practice of a public accounting system through a single account or linked accounts. According to the premium times, TSA ensures that income and expenditure are done through a consolidated revenue account (CRA) at the central bank of Nigeria. The use of this technological system (TSA), helps combat unnecessary frivolities in governance by ensuring accountability and serving as a watchdog against the human tendency to be financially deceitful. But there is indeed a problem. The CBN isn't run by fairytale angels but by humans, who naturally possess natural human flaws. Also, there is rhetoric about how public the TSA system is.
Nonetheless, it is accustomed to technology to improve and progress continuously. And in this particular case, an improvement on the TSA system can come through the introduction of the Blockchain to create a genuinely public single treasury account system.
The Hybrid TSA System
Foremost, the Blockchain can be described as a public ledger that records, processes, and stores transactions on a network. This definition highlights the features of the Blockchain, presenting a trusted, secure, decentralized, and efficient system to process and record the transactions of fungible and non-fungible assets. Unlike the TSA, the Blockchain is progressively efficient. The Blockchain's immutable nature (data stored on the Blockchain are permanent and indelible) supersedes the current TSA system operated using off-chain banking, alterable through a conspiracy by bad actors.
Furthermore, the traditional banking system experiences technological flaws and failures, a rarity of inefficient blockchain networks. The decentralized nature of the Blockchain allows for higher efficiency in transaction speed and confirmations. More importantly, is the transparent nature of the Blockchain. With as simple as the click of an explorer link, transaction details can be traced, evaluated, and audited by the public. I think this is the most outstanding feature of the Blockchain compared with the TSA system in the context of public governance. The blockchain introduces a decentralized management system reducing dependency on centralized control. And so, as public governance depends on the trust in representatives to function as expected, the blockchain further consolidates the trust in the conduct of financial activities.
How? Through the introduction of a private blockchain to modify the TSA system. A hybrid (Blockchain & status-quo) TSA system will function by adding Departments, bodies, and agencies to the network; unifying the network under a legally recognized blockchain. Issues such as idle balances will be reduced as checks and balances are now ensured by the network (everyone can see everyone). Moreso, multi-sigs are a thing in blockchain, and beyond transparency, will come in hand in the management of finances collected through a hybrid TSA system.
Without being clairvoyant, it will be expedient and a show of forward-thinking for the government to look towards the adoption of blockchain technology to better aspects of public governance, leveraging the features of the Blockchain while not being averse to the risks.