Case Study #2 Use of Blockchain to Combat Corruption

Updated: Jul 13

Corruption is one of the most troubling societal challenges confronting managers today, accounting for approximately 10% of the global cost of doing business. More than 100 organizations have formed a nongovernmental organization (NGO) to work toward "the vision of a corruption-free maritime industry." Blockchain has recently been promoted as a revolutionary technology capable of reducing uncertainty, insecurity, and ambiguity in business transactions by providing a single truth for all network participants.

As a result, thought leaders like Santiso have asked, "Can it (blockchain) be a game-changer in the global fight against corruption?" Blockchain has two distinguishing characteristics that make it an effective anti-corruption tool. For starters, it offers an unprecedented level of security and integrity to the records it manages, ensuring their authenticity. It also aids in breaking down data silos in traditional bureaucracies, where public entities are hesitant to share information with one another. This research was conducted in the global shipping context, where a major shipping company made a strategic decision to adopt this technology.

The research discovered that the potential for corruption in the international shipping of agricultural products is related to the numerous steps in the supply chain where specific actors have delegated authority. Every link in the chain has the potential for corrupt behavior. Corruption primarily occurs in relation to either speeding up/delaying the flow of goods or the certificates and declarations required to process export and import declarations.

Blockchain technology has the potential to combat both process and document-related corruption on a global scale across continents and economies. Anti-corruption bodies and organizations have traditionally relied on policies and legal frameworks to combat corruption. Institutional entrepreneurs have tapped into new emerging resources such as blockchain and social enablers like policies and laws. Amazing possibilities for the future, no?

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