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Technology could provide essential data on the effectiveness of regulations.
Blockchain technology could be used to change the Federal Regulations Code (CFR) from static documentation of regulations into a dynamic source of reliable regulatory impact information. With a simple search, anyone can determine the duration of the approval of permits, which companies or industries are most affected, which regulations require most of the documents and all the data available on the benefits of regulation.
A blockchain is simply a distributed ledger of any kind of information, not just financial information like Bitcoin, known as "block". In one important respect, it is similar to a Google document in read-only mode. All members of the chain can view the block, but once created, the blocks can not be changed without the consent of the majority of the chain members. Unlike a Google Doc, however, all members of the chain maintain copies of the blocks, so that there is not a single storage source that is subject to piracy or tampering.
To see how blockchain technology could transform regulation and improve public understanding of regulatory impacts, consider a recent article by Richard Parker of the School of Law at the University of Connecticut, who criticized an alleged statistic that regulation costs the economy $ 2 trillion annually – a statistic often trumped as justification by the Trump administration and by the Republicans in Congress to justify their current movement to restore regulatory protections. Parker notes that the value of $ 2 trillion costs can be found in a study by the National Association of Manufacturers (NAM) which based the figure on the opinion of business men in 34 member countries of the United States. Organization for economic cooperation and development.
The NAM study identified the timing of regulatory permission and the complexity of regulatory compliance as key factors contributing to the cost of regulation. But the NAM study never had any direct measure of weather permitting or regulatory complexity. If the regulations were linked via blockchain to allow, there would be data on actual delivery times for all permit approvals for all regulations. Likewise, regulatory complexity could be assessed by analyzing all transactions performed for a single permit application or the number of permit requests filed in different regulations for a single project.
Recent pilot projects around the world also reveal the promise that blockchain technology could be used to reduce the cost and complexity of regulatory compliance, as well as enabling better assessment of regulatory impacts.
For example, Irish funds, a mutual fund category association, have created a pilot blockchain program to improve the process of creating complex financial reporting documentation and securely communicating compliance documentation to regulatory authorities.
The audit and consulting firm Deloitte, which ran the Irish pilot project, found that the blockchain structure was effective in "secure data exchange" and that it had been shown to "improve the quality and integrity of data and increase efficiency ". Even more importantly, Deloitte concluded that the pilot created "a rich and reliable data set to apply for analysis."
There are several pilot projects around the world that use blockchain technology for property records. Verifying land transactions is a tedious and expensive process. More participants, both public, such as real estate registries and tax offices, and individuals, such as the buyer, the seller and the insurance companies, need access to information, which has historically been paper-based and hard to find. In addition, land transactions can be located for crime and fraud, so security is crucial
To address these challenges, the city of South Burlington, Vermont, is experimenting with blockchain technology to record land transactions. The country of Georgia and the Indian state of Andhra Pradesh are pursuing similar projects
Govtech reported that the deed of South Burlington is "the same to any other deed of property, except at the end of the legalese there is a long series of letters and numbers followed by a QR code, both can be used by anyone to find the position of the property on the blockchain of Ethereum. "According to Govtech the objectives of the pilot blockchain include greater transparency making transactions publicly available online, increasing efficiency and protection against frauds
But blockchain-enabled acts could also bring out other interesting data to evaluate regulatory effectiveness. For example, determining the number of public bodies that perform transactions related to the same piece of property could identify opportunities to consolidate approvals and identify bottlenecks.
President Donald Trump and the majority in Congress seem interested in a complete overhaul of the US regulatory system. They aim to reduce economic costs and eliminate unnecessary bureaucracy. But without a serious and accurate analysis, their efforts also have the potential to negatively affect the health, safety and environment of all Americans. To ensure that any regulatory reform can maximize the net benefits for society, it would be wise to collect as much as possible actual data.
To achieve greater accuracy in pursuing regulatory reform, the federal government should consider establishing blockchain pilot programs for some of the industry's "most hated" standards. The data collected in these pilot programs could be compared with data from more traditional channels such as Freedom of Information Act requests, cost benefit analysis and existing regulatory databases to understand if existing data are consistent with effective experience.
In addition, the blockchain pilot programs would help to determine if the technology could be useful in reducing the costs and complexity of regulation in general and could establish a framework for assessing the regulations to be amended and how to do so. Over time, the use of blockchain data would only become more complete and robust, providing only the kind of concrete data that Parker and others rightly suggest to better understand the true impacts of government regulation.
