Given the ongoing national issue over how public funds, particularly those relating to flood control projects, have been actually spent an interesting proposal recently came up: to put the national budget and government financial transactions on blockchain for greater transparency. But why do we want more transparency? And how can putting the “national budget” into the blockchain help us achieve the “why” or “whys” we have identified?

 

When something is transparent, say a clear glass window, it means it allows an observer (for instance, the layman yet interested public) on one side of the window to clearly see what is happening (the situation) on the other side of the window (for instance, the observed / the public official). If the latter knows that he can clearly be seen through the transparent glass window he/she would probably think twice before engaging in anything that could evidently provide evidence of wrongdoing.

 

As an example, we can use the case of an alleged traffic violation (as the situation) and the use of CCTV camera (as the technological solution) to address a particular problem or issue (as the “why”, in our earlier question; let us say, extorsion). Let’s say a traffic enforcer who, moments after apprehending a motorist, furtively extended his hand and appeared to receive a sum of money from the motorist, and then after receiving that money immediately pocketed the same. If the traffic enforcer knew that such body gestures can be clearly caught on CCTV camera, then the officer might be dissuaded from engaging in such kind of behavior.

 

Therefore, transparency in this particular instance can help create public trust - trust that the observed would not engage in a particular behaviour. However, from this same example, we are sure that a playful mind can think of ways for a traffic enforcer to avoid the clear conclusion (if not the impression) that he is engaged in that behaviour. We all know that camera view, camera angle, resolution, time of the day, temporary obstruction/s, etc. can significantly influence the utility of the CCTV camera and therefore its utility as public-trust-enhancing transparency tool. In other words, the presence of the CCTV camera may create a semblance of trust but not necessarily the kind of public trust we need. In short, a transparent glass window (in our example, through the CCTV camera) is not enough if we want to create more than a semblance of trust.

 

Let us think of a second scenario. What if the traffic enforcer knew there was a CCTV camera but he also knew how to significantly lessen its utility (say, asking the motorist to park where the officer knows the camera view or angle is obstructed)? However, let us also say that he did not know that there was another video camera (say, from a curious citizen) ready to capture clearly his body gestures at that moment. If the traffic enforcer engages in the same body gestures that can be clearly caught on video camera, then the transparency afforded by the video camera can help create accountability.

 

But in our example, the use of CCTV/video camera to enhance transparency only solves a particularly identified issue (extorsion). It does not solve (at least to the same extent) the separate problem of motorist likewise not obeying traffic laws and regulations partly because of the lack of clarity and consistency in the regulations themselves and in their enforcement (e.g. sometimes you can turn right even when the traffic light for vehicles going up is red, but sometimes you cannot). In this example, the technological solution (the CCTV camera) fails to address the deeper root/s of the problem. So, one of the questions this second scenario might seriously raise is “what particular problem are we really trying to solve in the first place when we install the CCTV camera?”

 

The other function of transparency is to ensure the public’s informed participation in public or quasi-public (or even private but regulated) affairs. In what way could a CCTV camera enhance the public’s informed-decision making? While I can think of a few possible answers, it is obvious that while a CCTV camera may have a trust-enhancing and accountability-enhancing transparency utility, it does not have the same informed-decision-making-enhancing transparency utility under the second scenario.

 

The foregoing scenarios show that when relying on a technological solution, identifying first the specific problem/s sought to be addressed is crucial to the solution’s utility; equally important is that knowing how such problem/s situate/s itself in both general and specific contexts can help identify the limitation/s of the proposed solution.

 

For obvious reasons, the simplicity of our CCTV camera example can be starkly contrasted to the complexity of the process of crafting an appropriations law, the budget execution process,[1] and of congress’ historical post-enactment role/s in said execution.[2] In one case, the Supreme Court said that lump-sum appropriations in the law that “allow legislators to wield any form of post-enactment authority in the implementation or enforcement of the budget, unrelated to congressional oversight” are unconstitutional for violating the doctrine of separation of powers. It added that such post-enactment authority taints Congress’ oversight power because in effect, Congress will be “checking on activities in which they themselves participate.” It also explained that even without legislative post-enactment identification of projects, a lump-sum appropriation that would be further divided among the individual legislators for multiple purposes is still unconstitutional for circumventing the President’s item-veto power. But more importantly, the Court added that “informal practices, through which legislators have effectively intruded into the proper phases of budget execution” are likewise unconstitutional.

 

Given the obvious complexity of the process (from the submission of the National Expenditure Program by the President, to budget deliberation, and then to budget execution, and auditing), it would be helpful first to provide the public, particularly the layman yet interested public, with a concise yet informative, simplified yet comprehensive, structured, intuitive, and engaging infographic of this complex process, including the relevant practices involving the “what” “ how” and the “who.” If this can be achieved, then we can next perhaps identify which portion or portions of that process as articulated in the infographic is/are perceived to lack transparency. [For instance, what were those “informal practices” that the Supreme Court was referring to? Being “informal” how can that be documented and tracked?] Would providing more transparency to those portion / portions achieve any or all of the purposes of transparency (i.e., increases public trust, improves accountability, and enhances informed-decision making)? If yes, how? If yes, what constitutional objections, if any, could the desired greater transparency raise? If no, is it ideal to maintain the status quo for that portion or portions? And, who gets to definitively answer these and similar other questions arising from these?

 

Accurate answers to these questions may not be easy to obtain, but once we get them, only then can we start exploring the question asked at the start: how can putting the “national budget and government financial transactions” – whatever that could specifically mean -- into the blockchain help achieve any objectives of aiming for greater “transparency,” which blockchain purports to provide? At the end of the day, more transparency could only be potentially helpful if the layman yet interested public clearly, completely, and accurately understands the complex matter staring at them whether at the current transparency levels, or greater.   

 

 

             

 

 


[1] budget execution "covers the various operational aspects of budgeting" and accordingly includes "the evaluation of work and financial plans for individual activities," the "regulation and release of funds" as well as all "other related activities" that comprise the budget execution cycle (See Belgica v Executive Secretary, G.R. No. 208566, November 19, 2013)

[2] Historically, there have been legislative participation post-enactment of the law, initially in the areas of fund release and realignment, and then subsequently to project identification that involve lump sum funds. There has been at least one legislative instance (1997) where the list of projects so identified are required to be published by the DBM. Apart from this type of legislative participation post-enactment, there is also the so-called congressional insertion legislators had the power to direct how, where and when these appropriations were to be spent. (See Belgica v Executive Secretary G.R. No. 208566, November 19, 2013)