Master Thesis
Program: Public Policy & Governance
Working Title: Constructing a Theory. Blockchain’s Added Value for Governments. Date: 22 June 2018
Author: Jesse Eradus Studentnumber: 10646884 Supervised by: Dr. A. M. C. Loeber
Second reader: Dr. R. J. Pistorius
2 Table of Contents
1. Chapter One: Introduction 4
1.1. Structure 7
2. Chapter Two: Governance 9
2.1. Proposition VI: Evolution of Governance 12
2.2. Proposition VII: Changing Roles of Government 13
2.3. Proposition VIII: Normative Governance 13
3. Chapter Three: e-Governance 16
3.1. e-Governance, e-Government and e-Participation Development 17
3.2. A Typology of e-Governance 18
3.3. e-Governance Origins and Advantages 20
3.4. Barriers and Risks of e-Governance Initiatives 22
4. Chapter Four: Blockchain Technology 24
4.1. BCT Fundamentals: Three Characteristics 25
4.2. BCT Applications and Advantages 28
5. BCT’s Theoretical Added Value 31
5.1. Accountability and Transparency 31
5.2. Performance: Effectiveness and Efficiency 35
5.3. Risks: Privacy and Security 38
5.4. Voice, Trust and Government Legitimacy 42
5.5. A Framework for BCT’s Added Value Assessment 44
6. Methods 46
6.1. Method 46
6.2. Case Selection 48
6.3. Data Selection and Analysis 49
7. Putting the Framework into Practice: An Analysis 51 7.1. Ex-Post Case One: Service Delivery – Municipality of Zuidhorn 51 7.2. Ex-Post Case Two: Administration within the Judicial Information Service 56 7.3. Ex-Ante Case One: Service Delivery – Municipality of Haarlemmermeer 60
8. Conclusion 64
8.1. Assessing BCT’s Added Value for Government Accountability 64 8.2. Assessing BCT’s Added Value for Government Performance 66
3 8.3. Assessing BCT’s Added Value for e-Governance Risks 68
8.4. Assessing for BCT’s Added Value 70
8.5. Implications of Research 71
8.6. Discussion and Recommendations for Future Research 72
Overview of Interviewed Practitioners 73
4 Abstract
Blockchain Technology (BCT) is increasingly being experimented with within various levels of government on a global scale. While there seems consensus about the potential of the technology, currently the empirical basis necessary to verify whether these expectations are accurate remains limited. Furthermore, a theoretical framework of the role BCT might play within governmental processes is to our best knowledge non-existent. Within this research, we construct such a framework. We seek to answer as to what BCT's added value is for governmental organizations and by which standards we might assess this. From governance and e-governance literature we subtract concepts in which we feel BCT's added value will concentrate. On the basis of this theoretical review, we have constructed an assessment framework that allows for post and ex-ante BCT implementation evaluation. We apply this framework two-time ex-post and one-time ex-ante on three cases of BCT applications in the Netherlands. We find that our framework is capable for systematic review of these applications and for assessment as to how they will contribute to existing e-governance processes.
Chapter One: Introduction
Small-scale experiments with and research into blockchain technology (BCT) applications within traditional information and communication technology (ICT) structures are on the rise globally. BCT is an innovation within this domain that possesses several novel technological characteristics by which it is considered to enable ‘the next generation of ICT' (Kogure et al, 2017). BCT is a ‘distributed database of records or public ledger of all transactions or digital events that have been executed and shared among actors within a network of participants' (Crosby et al, 2015). The technology enables digital, low-cost, decentralized, shared record-keeping within a network of actors in such a way that there is little to no trust required between the participants within it. Through its technological assets, BCT implementation within traditional ICT structures of various organizations offers promises and potential advantages. While these advantages as of yet remain prospective, they include improvements in strategic, organizational, economic, informational and technological levels (Ølnes et al, 2017). Organisations within various sectors and on various levels have begun experimenting and implementing the technology hoping to incorporate some of these advantages within their ICT structures. These organizations also include governmental organizations, as countries with a high IDI (internet development index) and EGDI (electronic government service delivery index) are experimenting with BCT implementation in e-government processes in order to assess the added value of the technology and possibly reap it's promised benefits. Some examples of these pilots conducted by governments are the administration of digital identities, the
5 transferring of real estate through a public ledger, issuing permits and storing them on the blockchain and the delivery of public services such as personal benefits. These pilots seem based on the belief that BCT might initiate the next generation of e-government services.
While the preliminary expectations of BCT implementation are optimistic and experimentations with the technology are underway, as of yet limited knowledge is available about what exactly constitutes the added value of BCT for governmental organizations. There seems to be both practical and academic consensus about the potential of the technology, but it remains unclear in what ways BCT will challenge or contribute to traditional governance and e-government practices. Consequently, it remains ambiguous by what means and what standards we can assess how BCT adds to existing e-government processes. The novelty of the technology itself likely explains the lack of knowledge surrounding the topic of BCT and e-government. Governmental organizations have only recently begun experimentations with the technology and as of yet a few implementations have been finalized. Many of the adoption pilots of BCT remain incomplete and theoretical. Therefore, there is only a limited empirical basis upon which we can draw conclusions about the added value of BCT. The potential of the technology therefore remains as prospective.
Besides an incomplete empirical basis, academic research into how BCT challenges contemporary governance and e-government practices also remains mostly absent. It appears that the topic of BCT as of yet has not been part of e-government literature and research (Ølnes, 2017). A google scholar search for articles that include a combination of blockchain with governance or government results in respectively 5.600 and 10.600 results. A more specified search that composes of the keywords blockchain and e-government results in only 677 hits. A systematic literature review into the scholarship surrounding the topic shows how ‘academic research in this area has only just started and issues discussed in the selected literature are still very limited' (Batubara et al, 2018). On the basis of this, it is recommended that:
‘Empirical studies using rigorous research protocols should be enforced in government context to study the various potential benefits of blockchain adoption. Empirical studies will increase the reliability and clarify the validity and limitations of the advantages and potential benefits of blockchain technology. This is relevant for the government practice as well as academic research’ (Batubara et al, 2018).
6 It is therefore clear that there is a limited academic basis to draw upon. Accompanied by an absent empirical basis, there also seems to be a lack of a theoretical framework that includes governance, e-government and BCT literature. Some articles exist that review the main proposed benefits and challenges that BCT incorporation within e-government faces (Ølnes et al, 2017; Batubara et al, 2018). However, to our best knowledge, no academic literature exists that researches whether BCT expectations are justified, through what means they are achieved and thus what the added value is of BCT adoption by governmental organizations. We aim to fill this gap by conducting such a research. We seek to provide an answer to the question: ‘by what standards and how can we assess blockchain technology’s (BCT) added value for governmental organisations?’.
The purpose of this research is to conduct a theoretical review through which we seek to locate where BCT's added value for governmental organizations might concentrate. We attempt to construct a conceptual framework that explores the relationships of governance, e-government, and BCT. By examining these literatures and their interrelationships, we discern some specific concepts of both governance and e-governance literatures in which we expect BCT is most likely to provide a valuable contribution to governmental processes in comparison to traditional ICT instruments. The goal is to process the insights that are gained from the theoretical review into a practical tool that enables ex-ante and ex-post added value assessments of specific BCT applications. We seek to operationalize the concepts derived from theory by combining them with our understanding of BCT theory that allows for the construction of indicators upon which cases can be assessed. This framework enables a structural review of conducted and future BCT implementations and provides insight into expected and realized primary effects of BCT adoption within governmental organizations.
We then proceed to apply the framework we have constructed to three cases of BCT applications within governmental organizations that have been developed within the Netherlands. Doing so might provide more insight into the validity, benefits, and inadequacies of the framework we attempt to construct. We conduct a qualitative multiple case study in which data is collected about these BCT applications through document analysis and semi-structured interviews with practitioners that have been involved with these implementations. Out of 40 domestic pilots, the three cases have been selected based on access and type of
7 implementation. Two of these cases have already been realized which allows for ex-post assessment: the child package within the municipality of Zuidhorn and the foreigners chain within the Judicial Information Service (JustID). The former concerns policy delivery on a local scale while the latter concerns administration processes on a national level. Our final case has not been implemented yet and entails the issuance of verification of information by the municipality of Haarlemmermeer. This case is also concerned with service delivery and allows for an ex-ante assessment. The results that we derive from these cases might be generalized beyond the Dutch context as the Netherlands is comparable to other countries with a high e-government development index (EGDI). We analyze these cases in two respects: first we provide a context analysis that shows some details about the application and what has been conducted before we apply our assessment framework.
With our research, we seek to contribute to the emerging scholarship that surrounds BCT and its application in governmental organizations in two ways. First, we aim to add to the as of yet limited theoretical knowledge about BCT within e-governance by constructing a theoretical framework. We attempt to connect the existing literatures on governance, e-governance, and BCT which structures an approach to researching BCT's added value. Additionally, we provide a practical tool that might be employed within the context of governmental BCT applications by practitioners that seek to assess whether or not BCT can provide added value in specific settings. This enables for knowledge building about the subject. Additional knowledge about BCT and how it relates to governance and e-governance practices might allow for designing BCT applications specifically tailored to meet specific goals. This might enhance the quality of BCT applications and therefore contribute to the existing broader governance and e-governance practices. If we ought to believe the optimism that surrounds BCT, being able to understand the technology better and to apply it within societal structures will benefit society as a whole.
Structure
We have structured our research in a way that allows us to answer our research question in eight chapters incrementally. In chapter two we explore governance theory primarily through five propositions of governance that are provided by Stoker (1999). We argue that these propositions fall short in the aspect of describing the dynamic character of governance, different
8 steering roles of governments and the increasing emphasis on ‘good' governance. These additions are added in the form of proposition six, seven and eight. Normative governance literature provides our research with tangible components of governance that allow for an assessment of the quality of governance and where improvements might be located. We therefore subtract the five principles of governance and discuss these as we argue that a few of these share a relationship with e-government in general and BCT adoption specifically. In chapter three, we review the relationship between governance and digitalization which combines in the concept of e-governance. e-Governance consists of a multitude of initiatives made by governments which are aimed at digitalizing governmental processes. We provide a typology of the concept and extract two critical barriers to successful e-governance initiatives: security and privacy. In chapter four we explain the emergence of BCT, it's technological characteristics and the advantages it promises to provide in comparison to existing traditional ICT processes. In chapter five, we conjoin all previously discussed literatures and review how BCT's added value in both governance and e-governance might take shape. In this chapter, we operationalize and problematize concepts of accountability, transparency, efficiency, effectiveness, privacy, and security and proceed to add our understanding of BCT to these concepts and how it specifically might reserve a role within them. This allows us to construct our framework which is introduced in this chapter. Following from the framework, we also introduce our expectations with regards to BCT's added value in the form of hypotheses. After chapter five our theoretical review concludes and we proceed to our analysis which starts with our methods in chapter six. We have chosen to apply our framework upon four cases of BCT implementation in the Netherlands. One of these cases is fully implemented while the other three remain theoretical. In chapter seven we therefore apply our assessment framework ex-post and ex-ante upon the stated cases and draw conclusions for each case. In chapter eight we summarize these and we broaden them up to provide an answer to what BCT's added value is for governmental organizations. By means of conclusion, we discuss the implications of our research and make recommendations for future research.
9 Chapter Two: Governance
We begin our theoretical review by discussing governance theory as e-governance and BCT incorporation within it are embedded within broader governance structures. Governance is a concept that lacks a precise definition and remains ambiguous due to it's multifaceted and dynamic character that makes application of it difficult (van Kersbergen & van Waarden, 2004; Jordan, 2008:23; Toikka, 2011; Kjaer, 2011:101). It is a concept that has academically been debated by various authors and which still lacks a single definition (Bovaird & Löffler, 2009). A most simple definition and one of the most influential has been provided by Rhodes (1997), whom broadly conceived governance as the shifting boundaries between the state and the civil society (Kjaer, 2011:108). With this definition, Rhodes highlights the changing role for government within the delivery of public services. Historically, the definition of the concept mainly overlapped with the definition of government but it has since developed beyond it (Keping, 2017). While governance still shares an overlap with government, there are also differences between them (Keping, 2011). A more recent definition of the concept defines governance as ‘referring to the activity and process of public authority for the realization of public interest' (Keping, 2011). Besides an overlap with government, it thus also seems to share similarities with public administration and public management literatures. As an application of the concept remains ambiguous by employing a single definition, we provide five core propositions of the concept which help shape its meaning provided by Stoker (1999:18).
I. Governance refers to a set of institutions and actors that are drawn from and also beyond government.
II. Governance identifies the blurring boundaries and responsibilities for tackling social and economic issues.
III. Governance identifies the power dependence involved in relationships between institutions involved in collective action.
IV. Governance is about autonomous self-governing networks of actors.
V. Governance recognizes the capacity to get things done which does not primarily rest on the power of government to use its authority. It sees government as able to use new tools and techniques to steer and guide (Stoker, 1999; Keping, 2017).
10 Governance is thus a concept in which public policy is embedded as it is concerned with addressing societal and economic issues. It can involve traditional government but might also include non-governmental organizations rather than solely relying on government and its authority. The concept of governance furthermore includes attention to ‘blurring boundaries and responsibilities’ for addressing the social and economic issues by shifting public authority beyond government towards the private sector and citizens themselves (Stoker, 1999:21). The power dependence that is incorporated within the relationships between the institutions that are involved with the addressing of societal problems entails that organizations are mutually interdependent and need to collaborate to achieve results (Stoker, 1999:22). These relationships and collaboration leads to the formation of regimes which are ‘informal yet relatively stable groups with institutional resources that enable them to have a sustained role in making governing decisions’ (Stoker, 1999:23). These regimes are independent self-governing networks composed of actors in a specific policy or societal domain which do not rely on the power of the government to function. This entails shifting roles for governments in which they can take up different roles rather than being a central hierarchical institution (Stoker, 1999:25).
Some aspects of governance are however not sufficiently highlighted within these propositions which are relevant for this paper. The above conceptualization of governance and the propositions from Stoker, while adequately capturing a simple definition of the concept of governance, date from 1999 and since then the scholarship surrounding the concept has developed towards a more thorough understanding of its components. Furthermore, important societal developments have taken place as well such as increased globalization and digitalization. This has resulted in additional knowledge about the concept which we have decided to add to the theory in the form of three new propositions. This allows for a more extensive capturing of the meaning of the concept and these propositions are displayed below as VI, VII and VIII. First of all, the original propositions pay limited attention to the dynamic character of governance through its evolution and existence of different modes. Governance is subject to change on the basis of societal developments and different modes of governance can be discerned that each is guided by different principles, steering mechanisms and roles for governments (Keast et al, 2006). Public governance is increasingly produced and delivered through combinations of these modes which include hierarchies, markets, and networks (Torfing, 2012). While proposition IV recognizes the ever more present network mode of
11 governance, it surpasses the development the concept has gone through to reach this and therefore oversees its dynamic character. This is therefore added as additional proposition VI. Second, following from the aforementioned evolution of governance there is a movement visible from vertical modes of governance that are structured around hierarchical relationships towards more horizontal ones in which actors are mutually dependent which results in different roles and tools for government within governance structures (Blom & Schillemans, 2010; Van der Steen et al, 2014). Proposition V to some extent recognizes this changing role and the additional roles governments can assume but neglects the movement of vertical modes towards horizontal ones. This development is essential within the scope of our research as it results in accountability to be restructured and take up different forms which can sometimes be problematic. We have therefore added this as additional proposition VII.
Most importantly, the original definitions and propositions neglect the emergence of the notion of normative governance. Normative governance has academically been developed and has reached the highest policy circles such as the United Nations. The scholarship surrounding the topic adds a normative dimension to the concept of governance that distinguishes between various components of it in which quality can be assessed, and improvements might be made in the search for ‘good' governance (Rothstein, 2012). As well as there is ‘bad' and ‘good' government, governance practices and structures might also be normatively assessed with the same distinction (Keping, 2011). Good governance in general and some of its principles specifically might also facilitate a higher degree of legitimacy (Keping, 2011; Keohane, 2011). As this literature provides us with tangible aspects of governance that might be affected by both e-governance and BCT implementation, we have added it as extra proposition VII. The aforementioned added propositions are displayed below, which are as follows:
VI. Governance as a concept is dynamic: it is subject to change where different modes of governance exist that are guided by different principles, steering mechanisms and roles for government, which can co-exist. Public governance is produced and delivered through combinations between hierarchies, markets, and networks. VII. Increasingly there’s a shift from more vertical modes of governance to more
horizontal modes of governance in which parties are mutually dependent. This entails different roles for government.
12 VIII. ‘Good' governance adds a normative dimension to the concept that is based upon several distinct elements which are generally viewed to improve the quality of governance.
2.1. Proposition VI: Evolution of Governance
Governance is a dynamic concept that over time has been subject to change with different modes of governance replacing one another while also being able to co-exist in different policy domains. Broadly, three ideal types of governance can be discerned that each is guided by a different steering mechanism and entails different roles for government: hierarchical, market and network governance (Keast et al, 2006). Hierarchical governance most resembles the traditional definition of government and entails the government as the primary provider of public policy guided by hierarchical relations between actors, with a strong reliance on the authority of the state as the basis for regulation between them (Bevir, 2011). Within this mode, there are clear roles for appointed individuals and thus it is apparent who is responsible for what which generates a high degree of accountability (Bevir, 2011:12). The characteristics of this mode, such as rigidity, service fragmentation, and top-down exclusive decision-making have led to the decline of hierarchical governance as it was found inadequate for the delivery of public policy (Keast et al, 2006). This dissatisfaction led to broad-ranging reforms mainly in the Thatcher- and Reagan-era in which the market replaced the bureaucracy as the primary deliverer of public services. Market governance substituted hierarchical relationships through contracts and contract-like relationships and broadened inclusion within policy delivery up to include private actors (Pollit, 2003:28; Keast et al, 2006). This has led to widespread reforms with a focus on concepts such as effectiveness and efficiency, labeled New Public Management (NPM). Whilst hierarchical governance was criticized for its ineffectiveness, the critique of market governance is mainly based on market failures such as monopolies and tragedies of the commons (Keast et al, 2006). The network mode of governance that is increasingly more present in contemporary society and means the creation and delivery of public policy through relations- and partnerships between government, business and civil society actors (Klijn, 2008). Network governance is characterized by inter-organizational relationships through public-private partnerships (PPP's) with a highly decentralized character that will include the state as a partner but might also surpass it (Provan & Kenis, 2007:234; Verver, 2014). It is based upon equal parties and mutual trust between actors (Verver, 2014:17).
13 2.2. Proposition VII: Changing Roles for Government
What this evolution illustrates is that there has been a movement from traditional vertical government towards modern horizontal multi-level governance. Within this evolution, the omnipotent central steering role of the government is in decline and has made place for the government as a partner, network manager or negotiator (Blom & Schillemans, 2010). However, this evolution and new forms of governance that have emerged with different roles for government are not always better, more efficient or more democratic than their predecessors (Capano et al, 2015). Furthermore, a discrepancy exists between policy domains: based on a case study in the Netherlands into five policy domains, the authors conclude that vertical and horizontal modes of governance can co-exist between domains and some tend to be more vertically structured (Blom & Schillemans, 2010). In some cases, there even appears to be a movement from more horizontal structures back to vertical hierarchical ones (Giessen et al, 2016). What becomes apparent from this is that due to new emerging governance structures the government is now able to take up different roles: they can employ authority through hierarchical governance, open up policy domains for market structures and take up a role of facilitator or network manager in PPPs. Accompanied with this are different steering principles and mechanisms that government can employ (Van der Steen et al, 2014; Blom & Schillemans, 2010).
2.3. Proposition VIII: Normative Governance
Besides attention for the differing governance modes with various roles for governments in public administration and management, a normative dimension might also be added to the concept in the form of normative governance. Normative governance is substantial literature that is involved with discerning aspects of governance in which quality can be assessed and improved through establishing ‘good' governance. Efforts to reach good governance practices are widespread globally on various societal levels in both public and private organizations and has reached the highest policy circles including various councils of the United Nations (Aguilera & Cuervo-Cazurra, 2009; Rothstein, 2012). This is not a remarkable development as for as long as there has been government, there have been attempts to improve its quality. Similar to the concept it seeks to improve, there is no clear-cut simple definition of good governance. It is clear that it involves adding a normative dimension to various forms of governance that allow for an assessment of quality (Weiss & Steiner, 2006). Striving towards good governance
14 practices thus concerns the incorporation or facilitation of specific elements that result in a way of governing that is good (Weiss & Steiner, 2006). A result of an enhanced quality of governance might be improved legitimacy of government (Keohane, 2007; Keping, 2011). Based on a literature review of some articles concerned with the topic, the realization of good governance practices seems to concentrate around five core principles that can be divided into nine sub-principles (UNESCAP, n.d.; Agere, 2000; Graham, 2003; Weiss & Steiner, 2006; Keping, 2011). These are displayed in table 2.1.
Principle Sub-Principles
1. Legitimacy and Voice
Participation: all individuals have a voice in decision-making, either directly or through legitimate institutions.
Consensus Orientation: GG mediates differing interests to reach a broad consensus and what is in the best interest of the group.
2. Direction Strategic Vision: leaders and public have a broad and long-term perspective on good governance and human development.
3. Performance
Responsiveness: institutions and processes try to serve all stakeholders. Effectiveness & Efficiency: processes and institutions produce results that meet needs while making the best use of resources.
4. Accountability
Accountability: decision-makers in government, the private sector & civil society organizations are accountable to the public as well as to institutional stakeholders.
Transparency: Processes, institutions and information directly accessible to those concerned with them & enough information provided to monitor them.
5. Fairness
Equity: all individuals have equal opportunities to improve their well-being
Rule of Law: legal frameworks should be enforced fair and impartially Table 2.1: Principles of Good Governance & Sub-Principles. Source: (Graham, 2003; UNESCAP, n.d.;
15 What becomes apparent from this table is that good governance results from the incorporation of five core principles which are legitimacy and voice, direction, performance, accountability, and fairness. Besides these broad concepts, the literature also provides our research with even more specific sub-principles and their definitions. We use these as they offer an approach to both an assessment of governance practices as well as offering narrow elements of these practices for which it becomes possible to evaluate both the added value of e-governance in general and BCT adoption more specific. We expect that the added value generated by BCT adoption within governmental processes does not affect or contribute to all aspects of good governance. We have juxtaposed the principles of good governance besides the advantages of e-governance that are discussed in chapter three in table 3.3. This shows that e-governance inclusion within governmental processes provides advantages or improvements within some of the principles of good governance, but not all. These advantages seem to concentrate primarily on legitimacy and voice performance and accountability. As BCT is purely a new instrument within the repertoire of ICT practices that can be employed within e-governance, BCT's added value will almost certainly also concentrate on these aspects of good governance. After all, BCT adoption solely occurs within e-governance practices. Therefore, we can drop some concepts of normative governance that hold no relevance for an assessment of BCT's added value. Both direction and fairness are two principles that do not seem to share a relationship with e-governance incorporation and BCT adoption as they are aspects of governance practices that are established and pursued on a broader society-wide institutional level rather than being specific facets of governance practices within organizations themselves. We elaborate further upon the relationship between the three concepts as mentioned earlier of which we expect BCT can provide an added value in chapter five.
16 3. Chapter Three: e-Governance
Contemporary society is increasingly digital which raises questions as to how ICT and governance practices relate. ICT as technological innovation can be considered as a tool for public governance modernization and a key driver of state transformation (Saparniene, 2013; Zwahr et al, 2005). Governments increasingly seek to digitalize their internal and external processes to fit better the changing demands of the digital society in which they operate. Examples of such digitalization within administration and service delivery processes include being able to review and pay taxes online, review personal information as recorded in governmental administration databases and the ability to view local council meetings real-time. The concept of e-governance describes all of these digital efforts made by governmental organizations. Similar to governance this concept is often defined ambiguously in a synonymous way with e-government (Bannister & Conolly, 2012). e-Governance encompasses the use of ICT in government in ways that either but not exclusively (1) alter governance structures or processes (2) create new governance structures or processes or (3) reifies previously theoretical ideas or issues of normative governance (Bannister & Conolly, 2012:11). In this quite theoretical definition, there is a particular emphasis on how ICT exactly affects governance processes and structures. It recognizes how ICT able to alter and create new governance practices through digitalization.
Another, perhaps more practical definition that clarifies the distinction between e-governance and e-government reads e-governance as the use of ICT in public administration to (1) improve the information provision and public service delivery, (2) encourage citizen's participation in the decision-making process and (3) making the government more accountable, transparent and effective (Budd & Harris, 2009). The first two components of this definition are conceptualized as e-government and e-participation. The former is primarily concerned with improving information provision and public service delivery through ICT, and thus with ICT employment within government services. The latter entails the inclusion of citizens within the democratic process and the use of ICT to either improve or enable this. Therefore, e-governance composes both e-government and e-democracy but cannot be used identically as there are differences between these electronic initiatives. What both the theoretical and the practical definitions share is attention for the normative dimension of governance and how ICT might influence this. e-Governance can make a significant contribution to the achievement of
17 good governance goals by enabling improvements in concepts such as efficiency, effectiveness, transparency, accountability, and participation (Heeks, 2001; Sapru & Sapru, 2005). Three things of e-governance are thus of importance: (1) whether or not ICT can restructure or create new governance structures and processes, (2) in what ways e-governance takes shape through e-government and e-democracy and (3) the normative dimension of to what extent ICT incorporation is able to contribute to the principles of normative governance positively. We employ the concept of e-governance in favor of the more specific ones, as by using the concept we wish to indicate both e-government and e-democracy practices, as well as the incorporation of a normative dimension.
3.1. e-Governance, e-Government and e-Participation Development
Worldwide, ICT is increasingly being employed by various governments and for various governmental activities. Progress with regards to global e-governance development is being monitored through bi-yearly reports by the United Nations. These reports indicate that more and more countries are employing ICT within governmental processes and that progress is being made consistently, although geographically uneven (UNDESA, 2014; 2016). These growing digital efforts made by governments seem related to the broader societal developments of digitalization, globalization and the increase in networking structures (Wirtz & Daiser, 2015). e-Governance, e-government and e-participation development can be tracked through three UN established indexes: the government development index (EGDI), the participation index (EPI) and the online service index (OSI). The EGDI seems to indicate e-governance development as a whole and consists of a formula containing the latter two indexes as well as a human capital index (HCI). The EPI focusses on the use of ICT to facilitate the provision of information by governments to citizens (e-information), interaction with stakeholders (e-consultation) and incorporation in the decision-making processes (e-decision-making) (UNDESA, 2016:141). It is therefore an index that describes the interaction between citizens and government through ICT instruments. The OSI measures the use of ICT by governments to deliver public services on a national level (UNDESA, 2016:79). An overview with the top 10 countries per index is displayed in table 3.1. From this table, it becomes apparent that e-governance development mainly concentrates in industrialized, western countries. Nonetheless, some south-east Asian countries are included as well which illustrates the global character of e-governance development.
18
EGDI EPI OSI
United Kingdom (0.9193) United Kingdom (1.000) United Kingdom (1) Australia (0.9143) Japan (0.9831) Australia (0.9783) Republic of Korea (0.8915) Australia (0.9831) Singapore (0.9710)
Singapore (0.8828) Republic of Korea (0.9661) Canada (0.9565) Finland (0.8817) Netherlands (0.9492) Republic of Korea (0.9420) Sweden (0.8704) New Zealand (0.9492) Finland (0.9420) Netherlands (0.8659) Spain (0.9322) New Zealand (0.9420) New Zealand (0.8653) Singapore (0.9153) France (0.9420)
Denmark (0.8510) Canada (0.9153) Netherlands (0.9275)
France (0.8456) Italy (0.9153) United States of America (0.9275).
Table 3.1: Top 10 Countries for each index. Source: (UNDESA, 2016)
3.2. A Typology of e-Governance
Different types of e-governance initiatives exist which can be classified alongside three dimensions: (1) the field of stakeholders they are concerned with, (2) what type of interaction it entails and (3) in what stage the development is. Together, these aspects of e-governance constitute a typology that helps for a broader understanding of the concept. We offer such a typology as not all e-governance initiatives are alike and the added value of BCT might differ per specific application. Since e-governance concerns ICT employment they always have a recipient as it is primarily a form of information provision and communications technology. This can either occur between governments themselves or in combination with a variety of actors or individuals within civil society. With regards to the field of stakeholders, five categories can be discerned which are displayed in table 3.2 (Belanger & Hiller, 2006; Alsehri & Drew, 2010; Wirtz & Daiser, 2015). The communication that occurs with the various stakeholders is not exclusively unilateral but can also be bilateral. Within G2C for example, governments might create a tax portal that enables them to provide citizens with information while citizens are also able to return information in the form of tax declarations. In G2G, governments might make use of the same administration management software that enables inter-governmental communication about citizens or companies. Each type of interaction
19 requires different approaches to ICT employment, and therefore it is important to distinguish between the stakeholders.
Types of E-Governance Description
Government-to-Government (G2G)
Linkage of government and public sector bodies for collaboration and cooperation.
Government-to-Business (G2B)
The provision of information and services as well as interaction between governmental and profit-oriented non-governmental organizations.
Government-to-PO (G2PO)
Interaction between governmental and profit non-governmental organizations such as public organizations. Government-to-Citizen
(G2C)
The relationship between the government and its citizens with respect to public service provision and e-democracy. Government-to-Employee
(G2E)
Digital relationship between agencies and their employees and their employees within.
Intra-government (IG) Provision of information within individual government agencies regarding processes, knowledge, and employees (Wilkinson, n.d.).
Table 3.2: Types of E-Government and their Definition. Source: (Belanger & Hiller, 2006; Wirtz & Daiser, 2015).
Besides a dimension of with whom and for whom e-governance initiatives are developed, a second dimension concerns the maturity of the provided services. Multiple scholars have argued that e-governance evolution occurs chronologically and that five broad stages can be discerned that indicate the current stage of the development: (1) presentation/information, (2) communication, (3) transaction, (4) participation and (5) open integration (Wirtz & Daiser, 2015:138-143). Each stage entails a higher level of complexity and a higher degree of interaction. The first stage is mainly concerned with the provision of information to all types of stakeholders. The second is digital two-way communication between governments and stakeholders. The third is the conducting of online transactions and a back-office integration of these transactions: i.e., the automatic updating of administrative databases with regards to an address change. Stage four is concerned with stakeholder participation in administrative processes. In this stage, users can exercise a shaping role. In the last stage, open integration, the stakeholders are integrated into public processes. Wirtz & Daiser state how in this stage: ‘user
20 … manages interconnected administrative procedures that support an automated execution of multiple transactions. … the user is engaged with public administration, openly sharing data and public input through various devices and channels while cooperating and collaborating with the respective public entities' (Wirtz & Daiser, 2015:143). Being able to reach this final stage of e-governance development results in the highest standard of e-governance activities. To our best knowledge however, an example of an e-governance initiative has not reached such a stage. We consider this dimension of e-governance stages as important since BCT adoption is generally considered to facilitate the next step in ICT development and thus in e-governance development. How it might do so is discussed in chapter four.
3.3. e-Governance Origins and Advantages
The growing development of e-governance initiatives is not remarkable as the employment of ICT provides substantial benefits within existing policy delivery and public administration processes for both users and governments themselves (Wirtz & Daiser, 2015; Alsehri & Drew, 2010). The deployment of ICT within government services finds it's origins to a large extent in the NPM type reforms in which the citizen is more or less treated as a customer or client of the various levels of government (Bernhard, 2014). Accompanied with this governance philosophy in which an emphasis on markets is inherent there is a focus upon more efficient public services and making the administration thereof more citizen-oriented, efficient, transparent and responsive (Bernhard, 2014). Citizens make use of these services as there is ‘willingness to use the online service delivery option if organizations develop trust relationships with individuals, assure them that their details are secure, …, and save individuals time and money’ (Gilbert et al, 2004). Governments employ ICT within their processes as it results in financial benefits and administrative simplification (Lau, n.d.). e-Governance employment within governance practices therefore benefits both it’s users and governments themselves and using it leads to a myriad of advantages which are displayed in figure 3.1.
The advantages of e-governance employment in governance practices take up many forms and include societal, economic, democratic and organizational benefits. It becomes apparent from figure 3.1 that e-governance incorporation can enhance accountability, transparency, efficiency, effectiveness, public sector interaction, information provision, participation, collaboration, and trust. These advantages seem to share an overlap with some of the principles provided by
21 normative governance that have been discussed in chapter 2.3. In table 3.3, we have juxtaposed the advantages proposed in figure 3.1 with the principles of good governance as described in table 2.1. This shows a confirmation of our belief that e-governance, in general, does relate to good governance practices and concentrates around concepts of legitimacy, accountability, transparency, efficiency, and effectiveness. e-Governance itself is thus related to the principles of good governance, which has already been mentioned in the two definitions of the concept that we provided. Even though the question remains what BCT adoption within e-governance practices adds to this, this analysis allows us to focus our attention towards the aspects of legitimacy, voice, performance, and accountability.
22 Normative Governance
Principles e-Government Advantages
Legitimacy and Voice
Provides a Toolset for e-Democracy
Strengthens Citizen Trust in the Government Can renew the image of the Government and Public Sector
Direction No apparent advantages
Performance
Fosters Efficiency and Effectiveness
Advances Public Service Orientation and Provision Improves public sector interaction
Generates various societal benefits
Helps to promote natural resource management
Accountability
Augments Transparency and Accountability Improves control over Government Bureaucracy Eases access to public sector information
Fairness No apparent advantages
Table 3.3: Normative Governance Principles and e-Government Advantages. Source: Own.
3.4. Barriers and Risks of e-Governance initiatives
Aside from the advantages of e-governance employment within service delivery, some barriers exist as well that might delay or even prevent successful implementation of ICT within governmental processes. Exploring these barriers are of importance as similar to ICT implementations BCT might also be affected by such barriers. They can be divided into four categories: technical, organizational, social and financial (Alsehri & Drew, 2010). We focus upon the technical barriers of e-government implementation as the other categories are less relevant for our framework. Organizational, social and financial barriers are still important facets that require attention but are more related to e-governance employment in general rather than BCT adoption within e-governance processes. These elements are therefore excluded from our framework as we do not expect BCT to provide added value with regards to these barriers. The remaining technical barriers concern ICT infrastructure, privacy, and security. ICT
23 infrastructure concerns whether or not sufficient individuals have access to the internet and how developed this infrastructure is. e-Government and BCT implementations however mainly take place within countries that generally have high ICT development indexes (ICTI) wherefore it can be safely assumed that the standard of ICT infrastructure is sufficient for BCT adoption (ICT, 2017). This leaves two main, often argued as critical, barriers for e-government implementation: privacy and security. Privacy entails the guarantee of a sufficient level of protection regarding information attributed to an individual (Alsehri & Drew, 2010). e-Governance should be approached with particular focus upon this issue, as without a sufficient level of privacy citizen confidence in e-government application declines which renders the project unfeasible (Alsehri & Drew, 2010). Another critical barrier is security, which concerns the protection of all information and systems against disclosure to unauthorized access or modifications (Alsehri & Drew, 2010). It entails the protection of information systems and the control of access to the information itself (Alsehri & Drew, 2010). This is also considered to be a vital element of the trust relationship between citizens and government (Alsehri & Drew, 2010). We have therefore decided to add these to our assessment framework as we expect that BCT adoption might contribute positively to these barriers. Furthermore, if specific concerns regarding these issues are not met this will negatively impact the success of e-governance and BCT adoption.
24 4. Chapter Four: Blockchain Technology
Blockchain technology (BCT) is a new ICT development that was invented and developed by Satoshi Nakamoto as the underlying technological framework of the digital cryptocurrency Bitcoin (Nakamoto, 2008). The digital coin itself has gained immense popularity and spurred the creation of a market in digital currencies and platforms with a current market capitalization of 396 billion US Dollars (Coinmarketcap, 2018). While Bitcoin was the first digital coin, the global cryptocurrency market now consists of 1596 currencies or platforms each functioning on their adaption of BCT. BCT forms the technological infrastructure upon which these currencies can function. It does so by offering a solution to the Byzantine Generals problem, a leading ICT and cryptography-related problem. This problem concerns ensuring that a network of actors agrees on the reliability of specific data while coping with actors amongst them that might provide false information (for an introduction see Lamport et al, 1982). BCT can eliminate this problem by creating a distributed, possibly decentralized, digital database of records or transactions with identical copies kept across different entities. Within financial applications the technology can facilitate peer to peer transactions without the need for a central intermediary within the network, is nearly insusceptible to fraud due to the consensus protocol necessary to reach additions and offers a high amount of privacy to users due to its cryptographic basis.
Besides the development and rise in popularity of the currencies, the technology itself is also gaining worldwide momentum with BCT being considered to be the next significant development within ICT (Ølnes et al, 2017). BCT seems to meet most of the requirements for it to be considered an information infrastructure which defines as ‘a shared, open and unbounded, heterogeneous, and evolving socio-technical system consisting of a set of IT capabilities and their user, operations, and design communities’ (for an explanation see Ølnes, 2016). Information infrastructures go beyond mere digital platforms as they are more complex and allow for innovative derivates to be built upon it and a prime example of it is internet itself (Ølnes, 2016). This means that the potential of the technology for broad application is high, which upholds as well for the public sector (Ølnes, 2016). It is therefore not strange that many governmental organizations have started experimenting with BCT adoption within their e-governance ICT systems. These pilots seem to be primarily conducted within countries that have high EGDI, EPI, OSI and IDI indexes such as the United States, United Kingdom,
25 China, India, Netherlands, Germany, France but also countries such as Papua New Guinea and Kenya (Smolenski, 2017). An explanation for the growing number of pilots is that BCT holds high technological potential for information exchange processes and conducting transactions that require authentication and trust (Ølnes et al, 2017). Applications of BCT within these processes is broad and can include asset registry, inventory administration and tangible and intangible information exchange (Swan, 2015). BCT applications seem to have a universal character and might be adopted on various levels and for various goals. This is illustrated by an analysis that shows the characteristics of BCT.
4.1. BCT Fundamentals: Three Characteristics
We have defined BCT as a distributed digital database technology that contains information about transactions within a shared peer-to-peer (P2P) network which is added to a shared ledger in the form of ‘blocks', which when linked constitute the blockchain (Ølnes et al, 2017; Seebacher & Schüritz; 2018). This process is displayed graphically in figure 4.1, which shows the process from transaction to storage on the chain. BCT possesses some novel characteristics with regards to other ICT instruments which might affect contemporary e-governance practices if employed. We discuss three assets of BCT which we think are elementary for being able to assess the added value it might possess within e-governance practices: (1) it's cryptographic origins that facilitate privacy and authentication in the digital realm, (2) it's decentralizing properties through P2P networks and (3) it's immutability which can prevent both fraud and manipulation. These assets are what distinguishes BCT from other forms of database management and ICT processes and what provides it with its novel properties.
BCT finds its origins in cryptography which focusses with facilitating private communication within the public realm. BCT makes use of both hashes and a public key system which are both derived from this scholarly field. Hashing entails applying specific pre-defined algorithms on data that converts it into a predefined and fixed length string of alphanumerical characters (Prpic, 2017). These hashes ensure private communication as they consist of sometimes up to 256 letters and numbers instead of the original text or personally identifiable information. Data thus goes through a process of encryption and decryption while being shared within the blockchain which means that while the information contained in it is only visible to sender and recipient, the information regarding the transaction is publicly available. Public key
26 cryptographic systems operate by providing actors within the system with both a public and a private key. Using these within a cryptographic system can facilitate both privacy and authentication (for an explanation see Diffie & Hellman, 1979). Such cryptographic systems that enable both privacy through encryption and authentication through digitally verifiable signatures were however already existent before the discovery of BCT. BCT makes use of a public key system and bundles ‘chains of digital signatures’ (Nakamoto, 2008) in blocks. These blocks contain information and transactions that have been executed within the network and are verified by a third party, often labeled ‘miners' who dedicate computer power to facilitating the network and receive rewards for this. These blocks are then added to a chain which constitutes the blockchain: the overall historical chain of information which contains every transaction ever created and verified (Prpic, 2017).
Figure 4.1: Graphical representation of the Blockchain Process. Source: (Buterin, 2017).
BCT by nature possesses decentralizing properties. The blockchain is distributed amongst all actors within a shared network and updates occur simultaneously across all entities once a new block is added. This entails that instead of centralized data storage, data stored in the chain is stored amongst multiple entities which enables decentralization. This property is what has provided the technology with success in financial applications and is considered to be one of its main characteristics (Seebacher & Schüritz, 2018). The decentralizing properties eliminate the need for a trusted central organization that facilitates transactions, monitors these and in general
27 keep a ledger of events within a network. Instead, organizations or individuals can conduct transactions P2P and are simultaneously keep a record of the transactions that have been conducted within the shared network. Therefore, BCT can replace centralized private ledger storage with decentralized public ledger storage. This property of BCT might contribute to improved transparency within a specific domain or network as all participants keep a copy of the ledger which generates more openness in comparison to centralized storage by one entity. While the decentralizing properties of BCT are advantageous in some respects, in some cases of e-governance applications this might be problematic. Decentralization by nature challenges state authority and therefore:
Decentralization of government services through permissioned blockchains is possible and desirable since it can increase public administration functionality. Decentralization of governance through open, distributed blockchains like Bitcoin, however, presents serious risks and drawbacks, which offset the benefits' (Atzori, 2015:31).
Decentralization within governmental processes should thus occur in a controlled manner by governmental organizations in closed networks, rather than decentralizing governance as a whole through open networks. This is possible by establishing either open or closed BCT networks (Ølnes et al, 2017). Within application design access to the network can be regulated by authorizing selected organizations or individuals. Closed BCT networks do decrease the extent to which it is purely distributed, but still possess a more decentralized character than centralized database storage. These properties can be applied at which in some cases and might prove advantageous in some BCT applications. This, in turn, might provide a valuable contribution as it increases openness and thus seems to facilitate transparency.
A final novel characteristic of BCT is immutability. Once a transaction is incorporated within a block and added to the blockchain, the information or transaction contained within it cannot be reversed or altered (Seebacher & Schüritz, 2018). This immutability is generated through consensus mechanisms which in their essence concern that all relevant actors within a network need to agree on the addition of a block to the blockchain from afore established and agreed upon algorithms. An example of such a consensus mechanism is proof-of-work which can be conceptualized as a mathematical puzzle which takes computational power to solve but can be easily verified by others (Seebacher & Schüritz, 2018). If an actor finds the solution, it is shared within the network by which other entities can verify the validity and thus reach consensus upon
28 it (Seebacher & Schüritz, 2018). This is considered to establish both trust and resilience against manipulation (Seebacher & Schüritz, 2018). As multiple entities need to agree on the content of a block and the transactions within it, it becomes virtually impossible for malicious actors to broadcast false information or try to manipulate the chain as it is easily verifiable whether the provided solution to the computational puzzle is correct. In its essence, this is the solution to the Byzantine Generals problem that we introduced.
4.2. BCT Applications and Advantages within e-Governance
We have introduced three characteristics of BCT that provide it with novel properties which might be of added value within e-governance practices. Additionally, a myriad of advantages is put forward within the literature of BCT. Research into the added value of BCT in general to traditional ICT instruments is primarily based upon applications experience within the private sector, as completed BCT adoptions within governmental organizations are sharply limited. Nonetheless, it is argued that BCT can enable e-governance to new heights through reduced costs, diminished complexity, increased trust in shared processes and improved auditability of transactions (Palfreyman, 2015). Potential applications within the sector seem broad and can concern administration processes, governmental service delivery and aspects of participation. BCT might eliminate multiple different databases kept across various governmental organizations and replace it with a shared, distributed database. Applications might be created that enable the administration of digital identities, judicial decisions, business licenses and identification documents (Ølnes et al, 2017). Applications might also be specified for governmental service delivery, such as creating a platform for government benefits as is illustrated by one of our cases. Other applications specified for e-participation might be the creation of a digital voting platform based on digital identity or keeping real-time public records about votes visible through the internet. Applications of BCT within e-governance is broad and might take up different forms and with different goals.
The potential advantages that are currently put forward in literature about BCT are displayed in table 4.1. As becomes apparent, these include advantages on various levels. These are based mainly upon experiences with BCT adoption in the private sector and on theory, as there currently is no empirical basis for assessing what the added value is of BCT specifically within e-governance practices. Accompanied with this, there is no theoretical basis upon which we can
29 draw what the advantages of BCT adoption within e-governance application are. We have however already put forward some aspects of governance where BCT's added value will likely concentrate based on the juxtaposition we provided in table 3.3. These are accountability, transparency, legitimacy, voice, efficiency, and effectiveness. Within e-governance literature, we have also emphasized privacy and security as two barriers that implementation of it faces. Through discussing the characteristics of BCT, we have however discovered that by nature BCT can construct a higher degree of privacy due to its use of cryptographic systems and possibly enhance security through its immutability. We therefore expect BCT's added value for e-governance applications to concentrate in the specific governance principles and e-governance barriers.
If we review the promised benefits of BCT adoption displayed below, we see that these share an overlap with the concepts that we focus BCT's added value upon. In literature, proposed advantages of BCT include benefits within (1) transparency, (2) auditability, (3) increased control, (4) access to information, (5) increased trust, (6) costs, (7) predictive capabilities, (8) reducing human errors, (9) data integrity, (10) privacy, (11) security and (12) fraud and manipulation reduction as can be viewed below. Advantages one to three seem to relate to both accountability and transparency as defined within the principles of good governance. Benefits four and five relate to legitimacy and voice. Advantages six through nine relate to both efficiency and effectiveness. Privacy (10) is also put forward as a benefit of BCT adoption. Finally, eleven and twelve seem to relate to security. We are therefore confirmed in our beliefs that BCT adoption possesses added value for governmental processes and that this value is located within both aspects of governance practices and e-governance barriers. We provide a more in-depth analysis of the relationship between BCT and these concepts in chapter five that form the basis for our assessment framework.
30 Category Benefits & Promise Explanation
Strategic
Transparency Democratized access to data. History of transactions remains visible. Every node has overview of transactions. Fraud &
manipulation reduction
Unauthorized changes difficult harder due to multiple ledgers.
Reducing corruption BCT ledgers have established rules in the code, which counters unauthorized transactions or false ones.
Organizational
Increased trust Immutable recordkeeping and verification by multiple nodes enhances trust in process.
Transparency &
auditability Traceable transaction history and auditable trails. Predictive capacity Historic information enables predictive capabilities. Increased control Consensus needed to add transactions.
Clear ownership Codes clearly define ownership and how information can be changed.
Economical
Reduced costs Transaction validation and conduction costs eliminated due to it being automatic.
Increased resilience Higher levels of resilience and security result in lower data protection costs.
Informational
Data integrity and
quality Consensus voting generates higher data quality.
Reducing human
errors Automatic transactions enable human mistakes.
Access to information Information is stored in multiple places which enhances access and the speed of access.
Privacy User can be anonymous due to encryption and can be
ensured that others cannot access information.
Reliability Data stored at multiple places: algorithms ensure only
information is changed when all parties agree.
Technological
Resilience Resilient to malicious behavior due to multiple actors in network.
Security Manipulation is more difficult due to multiple databases.
Hacking them all at the same time is less likely.
Immutability Once data is stored in BCT hard to delete without
noticing.
Reduced energy Increased efficiency and transaction mechanisms reduces energy consumption
31 5. BCT’s Theoretical Added Value
In the previous theoretical sections, we have established and briefly discussed that BCT's added value for governmental organizations would most likely concentrate within certain specific elements of both governance and e-governance. In this section, we elaborate further upon how BCT adoption within e-governance practices shares a relationship with these concepts. We operationalize each concept, highlight some contemporary problematic aspects of them and review through what means BCT might assume a role within them. Reviewing how exactly BCT can add to existing e-governance processes in regard to the stated concepts essentially functions as an operationalization of our understanding of BCT theory. This results in useful indicators for which BCT's added value within specific e-governance applications might be assessed. On the basis of this operationalization and analysis, we introduce our assessment framework which is displayed in table 5.5. We supplement this framework with hypotheses of BCT's added value, which we aim to verify in our analysis.
5.1. Accountability and Transparency
The first two concepts that we operationalize are grounded in normative governance and concern accountability and transparency. Accountability has multiple definitions rooted in various scholarships, but there is a shared understanding of it as a relational concept that binds an executive entity to an evaluative entity who possesses the power to punish or reward on the basis of behavior (Schillemans et al, 2013). Accountability provides information which enables for an assessment of government performance such as effectiveness, integrity, democracy, and transparency (Schillemans, 2008). It composes of three distinct phases: (1) the information phase where the accountable entity provides information on its actions, (2) the debating phase where the evaluative entity discusses the information it has received and (3) the sanctions phase where the evaluative entity reaches a judgment and makes use of instruments to redress behavior (Schillemans et al, 2013). Accountability is therefore a matter of control between two or more parties which can be facilitated either within organizations, between organizations or between the broader public and governmental organizations. This control might be exercised alongside a horizontal or a vertical dimension. Horizontal accountability constitutes the ability of one part of government to find out, stop or correct what other sectors are doing (Johnston, n.d.). It is the extent to which state institutions can check and correct other governmental organizations as well as the requirement for sideways reporting (Stapenhurst & O'Brien, n.d.). The horizontal
32 dimension concerns mechanisms of accountability that address peers, equals and stakeholders (Schillemans, 2008). Vertical, or ‘hierarchical’, accountability is the degree to which different layers of government are hierarchically accountable to both the minister and the parliament (Meijer, 2014). It is the accountability mechanism that holds government organizations responsible to both the minister initiated and democratic control. An instrument that strengthens both forms of accountability is transparency (Meijer, 2014). It is a concept that is related to openness about followed procedures, taken actions and achieved results that provides recipients with information upon which judgments can be made. A literature reviewed definition of the concept reads it as ‘the availability of information about an actor allowing other actors to monitor the workings or performance of this actor’ (Meijer, 2014). It relates to the aforementioned information phase of accountability mechanisms and is required for these to function properly (Meijer, 2014). Enhanced transparency and accountability might result in overall increased government legitimacy and trust (Meijer, 2014).
Within contemporary new modes of governance that are frequently more horizontally structured, accountability might be problematic (Newman, 2004; Papadopoulos, 2005; Harlow & Rawlings, 2006; Bogason & Musso, 2006). Whilst actors within network governance are subject to various horizontal forms of accountability, problems arise with regards to vertical accountability. This is the case as relations between actors ‘are weakly exposed to public scrutiny, and to the scrutiny of the legitimate, democratic and representative bodies’ (Papadopoulos, 2005). It occurs mainly due to the inherent properties of network governance in which there is a weak presence of citizen representatives, a lack of visibility from the democratic circuit, the multi-level aspect of governance and the abundance of horizontal accountability (Papadopoulos, 2005). For this issue, various potential solutions exist that might be employed to overcome it. These solutions might include contracting structures between actors, clarification of roles and responsibilities, well-defined interest parties, a good information supply, debate opportunities and sanctioning options (Hansson & Longva, 2014; Michels & Meijers, 2008). Therefore, increased transparency towards both horizontally and vertically emplaced actors seem to be able to contribute to both dimensions of accountability (Meijer, 2014).
