Interview #16 Jurgen Goossens - Designing Blockchain for Public Governance: Safeguarding Public Values and Legal Compliance

The use of blockchain in digital public governance has the potential to transform how governments provide services, manage data, and ensure compliance with legal and regulatory requirements in the networked information society. However, designing blockchain systems with public values and legal compliance in mind from the outset is crucial to fully realize the benefits of blockchain in the context of digital public governance.

Safeguard public values
The Chain project, led by Jurgen Goossens (full professor Constitutional Law at the University of Utrecht), focuses on the exercise of public authority in distributed networks. It investigates how blockchain technology, combined with smart contracts, can be designed in a transparent and legitimate way. This in order to safeguard the public values of transparency, accountability, trust, and legitimacy, specifically, when implementing blockchain applications to address strategic policy objectives. The project investigates various real-life use cases, including two BLING projects: the Red Button project by the CJIB and the EnergyWallet by the municipality of Emmen.

The project deploys an interdisciplinary approach, working with legal, IT, and science and technology experts. Moreover, a citizen perspective, rule of law values perspective, and ‘by design approach’ are used. The BLING case studies are studied to find out how blockchain can be implemented in a socially and legally acceptable manner. Over 50 interviews with end-users and stakeholders were conducted, and many meetings were observed via the ‘fly on the wall method’ to identify the explicit and implicit values that underlie the projects and to understand how they were addressed in these cases.

Conflicting values
The Red Button project is a tech-driven innovation trajectory for the public good, focused on debt relief and the use of blockchain by the government in the context of debt assistance. One of the prominent public values that came to the forefront by exploring blockchain as a Self-Sovereign Identity solution was control over data. In addition, debt-relief was also identified as an important value. These two values, however, may be in conflict from a citizen perspective. When a citizen with major debt is in crisis, the first thing on their mind is not control over data, rather it is the need for help and debt rest. As a result, values and their importance for end-users need to be kept in mind, so they can be addressed in time before launching an application. Throughout the process, the embedment of a technological solution in social practice was deemed essential.

Compliance by design
The second use-case, the Energy Wallet, is a project by the municipality of Emmen that implements blockchain technology to distribute government subsidies. The blockchain for good project has clear public values such as sustainability, making sure subsidies reach citizens in an efficient manner, and energy-saving. When governments operate there are always certain laws and regulations in place (e.g. GDPR, general principals of good administration such as the duty of care and reason-giving, open government act, archiving act, etc.) through which a government must navigate. Nevertheless, compliance by design in practice is still a challenge. In both case studies there was a strong focus on the GDPR.

The EnergyWallet project, for example, primarily aimed to have ‘no personal data on the blockchain.’ From a GDPR point of view this is fantastic. However, from another point of view it also comes with challenges. For instance, in case of granting a subsidy through an administrative order Dutch government organizations are obliged to communicate with citizens how they could appeal a decision to grant or refuse a subsidy. But without personal data it can be very difficult or even impossible to communicate directly with citizens and comply with these regulations. As a result, to ensure legal compliance, blockchain systems must be designed with both public values and concrete legal requirements in mind. Blockchain developers and policy makers should work closely with legal experts starting in the early beginning of the design phase to ensure that their systems are designed in a way that complies with all applicable laws and regulations.

Fragile trust
Blockchain has been introduced as a ‘trustless machine’ or at least as a socio-technological system that reduces the need to trust in third parties. Nevertheless, the fact remains that we need trust, at the bare minimum we need to trust in the technology. Trust in new technologies however, is fragile and needs to be gained. Additionally, trust in government is fragile too. An example of this is the childcare benefit scandal in the Netherlands, in which technology also played a role. One needs to be aware that when working with new technologies in government trust is key, but it is fragile and deserves sufficient attention. Secondly, expectation management is crucial. When citizens interact with government through new technology they have certain expectations. They expect a user-friendly application that works and that they are treated equally.  

In conclusion, blockchain has emerged as a useful tool for digital public governance in the networked information society. However, it is essential to design blockchain systems with public values and legal compliance in mind from the outset to fully realize its benefits. The Chain project's interdisciplinary approach provides valuable insights into how blockchain technology can be designed in a transparent and legitimate way to safeguard public values and comply with legal requirements.

Bio Prof. mr. dr. Jurgen Goossens 
Jurgen Goossens is Full Professor of Constitutional Law and Head of the Insititute of Jurisprudence, Constitutional and Administrative Law at Utrecht University. His chair focuses on constitutional resilience in view of digital transformations and legal protection against government action. He is Principal Investigator of the interdisciplinary NWO-MVI Chain project: 'Blockchain in the network society: transparency, trust and legitimacy by design' (2020-2024). Goossens wrote several publications about blockchain in government, among others a (Dutch) monography with K. Verslype and E. Tjong Tjin Tai ‘Blockchain and smart contracts: reassessment of the role of trusted intermediaries in the algorithmic society.