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Can Blockchain save Democracy in a post-pandemic world?

INDEX

Make no mistake about it, global democracy is under threat.

In the 2019 Democracy Index, the average global score for democracy fell from 5.48 in 2018 to 5.44. This follows a decade long regression and culminates in the worst average global score since The Economist first produced the index in 2006.

According to The Economist Intelligence Unit, 48.4% of the world’s population lives in some kind of democracy, be it a ‘full democracy’ or a ‘flawed democracy.’ That number is shockingly small, especially when you consider the fact that only 5.7% reside in a “full democracy”, and that that number is down from 8.9% in 2015. The reason that number is down is as a result of the US demotion from a ‘full democracy’ to a ‘flawed democracy’ in 2016.

If less than half of the world lives in some kind of a democracy, how many under authoritarian rule? According to the index, 35.6% of the world population, more than one-third, live under Authoritarian rule. That is mostly due to the almost 1.4 billion people that live in China.

“The global march of democracy stalled in the 2000s and retreated in the second decade of the 21st century. But the recent wave of protest in the developing world and the populist insurgency in the mature democracies show the potential for democratic renewal.” Joan Hoey, Editor, The Democracy Index

When you consider that an earlier report from the Council of Foreign Relations showed that Democratic states are “less likely to breed terrorists or to be state sponsors of terrorism,” and are more likely to be “active participants in the global economy,” this slide away from democracy gives good reason for alarm.

The reasons for the declining democracy trend

This regressive trend away from democracy is clearly visible in the Democracy Index over the last 14 years since its inception. The Economist Intelligence Unit believes that this “democracy recession” has a number of causes:

1. An increasing emphasis on elite/expert governance rather than popular participatory democracy;
2. The growing influence of unelected, unaccountable institutions and expert bodies;
3. The removal of substantive issues of national importance from the political arena to be decided by politicians, experts or supranational bodies behind closed doors;
4. A widening gap between political elites and parties on the one hand and national electorates on the other; and
5. A decline in civil liberties, including media freedom and freedom of speech.

This regressive trend in developed democracies began in the 1990s onwards and picked up pace in the 2000s. In the end, this has given rise to populist movements that demand a new political contract between the people and the power.

It all points to a lack of trust in politics and power. And why would we trust those in power when they use what we believed to be private data to swing elections as with Cambridge Analytica? Why should we trust our leaders when they fail to postpone local elections in the midst of a pandemic, as was the case with President Macron in France?

Winston Churchill wrote that "at the bottom of all the tributes paid to democracy is the little man, walking into the little booth, with a little pencil, making a little cross on a little bit of paper — no amount of rhetoric or voluminous discussion can possibly diminish the overwhelming importance of that point".

What if we didn’t need to worry about Cambridge Analytica style data harvesting going undetected before it’s too late? What if we could change that? With ever lower voter turnouts, what if, instead of going to the voting booth, the voting booth came to the people?

How Blockchain technology can help rebuild trust

Today, there are dozens of serious projects with the shared goal of making voting safe, secure, easy, and incorruptible. The majority of these projects have identified Blockchain technology as the key to making this possible.

Using distributed ledger technology (DLT), each recorded vote is supposedly ‘un-tamperable’. That means no politician, party, or election official could ever possibly even dream of changing the vote. What’s more, any verified voter could vote wherever they are in the world, in seconds, from the mobile phone.

Countries like Holland and Denmark have begun blockchain trials to rebuild the missing trust in the voting system. They can immediately record voter participation from home using DLT to make it less susceptible to fraud and increase voter participation.

However, while the tech aspect is important, it is at least equally as important that citizens trust this new technology if it is going to have the desired effect. Citizens need to understand and believe that new technology can enhance the current situation. In that sense, Blockchain has three specific advantages over other potential tech solutions:

Transparency
Auditability
Immutability

One of the great promises of Blockchain technology is its transparency. Anyone who joins a Blockchain network can view all the information on it. That includes, for example, ownership of assets, who sold to whom, when, and how. The idea behind such transparency is that it makes fraud virtually impossible.

Due to its transparent nature, Blockchain makes auditing easy. Audits could mean financial audits, compliance audits, or regulatory audits. An auditor intends to confirm accuracy with supporting evidence. The great thing about Blockchain is that the evidence lies in the transaction, which is transparent. Vitally, Blockchain allows an auditor to base their judgement not only on a random sample of transparent data but all existing data on the chain. That boosts the assurance auditors can provide the public regarding the audit result.

When you consider that Blockchains are designed to be immutable, you understand why its transparency and auditability is so incredible. When you write a block into a chain, it’s not possible, realistically, for anyone to change it. Unlike, for example, a typical database where you can add rows or columns and modify the data.

Once a piece of information is added to the Blockchain, you can believe that its data is legitimate as a result of the network participants validating it using cryptography. This is what gives Blockchain its role as a harbinger of trust in society. It is important to note, however, that while many claim absolute immutability, it probably isn’t in fact 100% immutable. Nonetheless, the complexities around rewriting a Blockchain are so prohibitive that we can fairly consider it realistically immutable.

We can see real-world examples of this in many countries today.

In Estonia, they are restoring trust in democracy with Blockchain technology by improving the electoral process. Way back in 2007, before accusations of Russian interference in the UK or US, Estonia safeguarded their critical data from Russian cyberattacks by implementing an e-identity scheme called X-Road.

X-road includes a network of servers, including many located outside Estonian borders, with data distributed using DLT. To hack the government's servers, any would-be hacker would have to infiltrate multiple decentralised serves instead of one single central server. A further benefit of enormous importance is that, in Estonia, the individual owns their personal data and knows every time anyone, private or public, like a doctor, police officer, bank, or otherwise, accesses their data.

You can see how such an approach breeds faith in a ‘trustless’ society where trust isn’t based on judgement but immutable data. To date, not everyone is convinced by the power of Blockchain to bring true democracy into existence through the creation of a ‘trustless’ society where immutable data rules. Time will tell. At Blockchain Reply we believe Blockchain technology is a significant next step towards a more trusting society. And we’re working with many clients to help bring Blockchain-based solutions to life to solve some of the world’s most challenging, complex, and impactful problems.