Blockchain technology and the governance of foreign aid

Reinsberg, B. (2019) Blockchain technology and the governance of foreign aid. Journal of Institutional Economics, 15(3), pp. 413-429. (doi: 10.1017/S1744137418000462)

Abstract

Blockchain technology has been considered a vehicle to foster development in poor countries by promoting applications such as secure delivery of humanitarian aid, digital identity services, and proof of provenance. This article examines whether (and if so, how) blockchain technology can enhance the effectiveness and efficiency of foreign aid governance, thereby moving beyond completely anonymous contexts. Foreign aid governance is plagued by lack of credible commitments among states, which are further exacerbated by information asymmetries and which often undermine aid effectiveness. In this context, blockchain technology holds two promises. First, through the guaranteed execution of smart contracts, it can strengthen the credibility of state commitments, for example collective burden-sharing rules among a group of donors or recipient country compliance with policy conditionality in return for aid. Second, through leveraging prediction markets, blockchain technology can allay information problems related to the verification of real-world events along the entire aid delivery chain.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Reinsberg, Dr Bernhard
• Authors: Reinsberg, B.
• College/School: College of Social Sciences > School of Social and Political Sciences > Politics
• Journal Name: Journal of Institutional Economics
• Publisher: Cambridge University Press
• ISSN: 1744-1374
• ISSN (Online): 1744-1382
• Published Online: 26 November 2018
• Copyright Holders: Copyright © 2018 Millennium Economics Ltd.
• First Published: First published in Journal of Institutional Economics 15(3):413-429
• Publisher Policy: Reproduced in accordance with the copyright policy of the publisher