Web3, DAOs and Public Policy Innovation

In recent months, like many people, I have fallen down the web3 rabbit hole. Whatever one may think of its merits or lack thereof, there is an undeniable energy and enthusiasm in the space virtually unmatched in any other field or industry. As a public sector employee who has a keen interest in governance and how work in the public sector can be improved, I have been observing with interest, and more recently participating in a number of DAOs (Decentralized Autonomous Organizations) and web3-based blockchain governance experiments.

Among the most interesting experiments in this space from a governance and public goods perspective is GitcoinDAO. GitcoinDAO’s mission is to help fund and support open-source public goods and the people who dedicate their time to creating and maintaining these goods. GitcoinDAO interests me as a public servant for a number of reasons. Firstly, the maintenance of open-source public goods is an area which, while very much a publicly-minded project, is a tricky one for any particular government to fund. As these goods are typically online, they are used by people across the world. Therefore, national governments are disincentivized to fund these, as they are not necessarily primarily for the benefit of their citizens, even if they will undoubtedly benefit from their sustained funding.

Other DAOs are providing experimentation on problems as varied as universal basic income and even the creation of entire new cities, such as UBI DAO and CityDAO respectively. While experiments with a Universal Basic Income are not new, DAOs provide a new way for these experiments to be funded and trialled. Innovative policy experiments which may not get initial voter support or buy-in could be trialled through a DAO and if proven successful be then taken up by government, this time with more buy-in from voters than previously.

At first sight, it can seem unclear what, if anything, government can learn from these experiments. After all, they’re operating in completely different circumstances and with widely varying, sometimes conflicting goals. However, scratching below the surface, I believe there are some principles and processes which could be used to benefit the work that traditional governments and bureaucracies do. The aforementioned DAOs and blockchain-based organisations are examples of what I see as governance and public policy incubators. These organisations, albeit on much smaller scales than that of a nation-state, innovate and experiment with governance and public policy choices. Forward-thinking government agencies could then implement the processes developed within DAOs as appropriate.

There are examples of governments taking on board some of the processes and principles of decentralized organisations into their practice. One of the most notable examples of this is Taiwan, whose vTaiwan initiative takes advantage of participatory governance and the use of technology similar to what is happening in many DAOs.
In a similar vein, Estonia’s e-Estonia initiative has successfully digitalized virtually the entire bureaucratic infrastructure of the state. In their own words, e-Estonia is about creating a digital society. While not using blockchain specifically, it nonetheless relies on automated processes and reducing bureaucratic overhead, in a similar way to what DAOs aim to do.

Unlike many people who are involved with DAOs, I do not see it as a foregone conclusion or even particularly likely that DAOs will become the primary form of organization over traditional corporations or government services. Certainly in the short-to-medium term, at least, governments and traditional businesses and startups are here to stay. I believe that issues of scaling as well as the barriers to entry, not only technical but in terms of needing to be a part of the right networks or hold a specific token (which can be expensive) limit the extent to which DAOs will play a primary role in public and private sector governance. I believe, instead, that DAOs can be highly useful and powerful incubators of innovation and organization for smaller-scale operations, both civically and profit-minded.

While I don’t envision government bureaucracy replicating DAO structures any time soon, it is worth keeping an eye on them nonetheless to see when good ideas come from this space. In a time of ever-increasing innovation and change, any tool in a policymaker’s toolkit to help support good governance can only be beneficial.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: