Value for money analysis (or benefit-cost analysis, cost-economy, cost-effectiveness, cost-efficiency, or cost-feasibility) is defined as an evaluation of the best use of scarce resources to achieve a desired outcome. In this panel, participants examined the value for money of blockchain by taking on an aspect of an adapted value-for-money framework. The framework takes into account resources, activities, outputs, and outcomes. Panel members were specifically asked to explain what they gained and lost by using blockchain as well as whether they had to use blockchain at all.
Ben Joakim is the founder and CEO of Disberse, a new financial institution built on distributed ledger technology. Disberse aims to ensure greater privacy and security for the aid sector — which serves some of the most vulnerable communities in the world. Joakim notes that in the aid sector, traditional banks are often slow and expensive, which can be detrimental during a humanitarian crisis. In addition, traditional banks can lack transparency, which increases the potential for the mismanagement and misappropriation of funds. Disberse works to tackle those problems by creating a financial institution that is not only efficient but also transparent and decentralised, thus allowing for greater impact with available resources. Additionally, Disberse allows for multi-currency accounts, foreign currency exchanges, instant fund transfers, end-to-end traceability, donation capabilities, regulatory compliance, and cash transfer systems. Since inception, Disberse has delivered pilots in several countries including Swaziland, Rwanda, Ukraine, and Australia.
David Mikhail of UNCDF discussed the organization’s usage of blockchain technologies in the Nepal remittance corridor. In 2017 alone, Nepal received $6.9 billion in remittances. These funds are responsible for 28.4% of the country’s GDP. One of the main challenges for Nepali migrant families is a lack of financial inclusion characterized by credit interest rates as high as 30%, lack of a documented credit history, and lack of sufficient collateral. Secondarily, families have a difficult time building capital once they migrate. Between the high costs of migration, high-interest rate loans, non-stimulative spending that impacts their ability to save and invest, and lack of credit history make it difficult for migrants to break free of the poverty cycle. Due to this, the organization asked itself whether it could create a new credit product tied to remittances to provide capital and fuel domestic economic development. In theory, this solution would drive financial inclusion by channeling remittances through the formal sector. The product would not only leverage blockchain in order to create a documented credit history, but it would also direct the flow of remittances into short and long-term savings or credit products that would help migrants generate income and assets.
Tara Vassefi presented on her experience at Truepic, a photo and video verification platform that aims to foster a healthy civil society by pushing back against disinformation. They do this by bolstering the value of authentic photos through the use of verified pixel data from the time of capture and through the independent verification of time and location metadata. Hashed references to time, date, location and exact pixelation are stored on the blockchain. The benefits of using this technology are that the data is immutable and it adds a layer of privacy and security to media. The downsides include marginal costs and the general availability of other technologies. Truepic has been used for monitoring and evaluation purposes in Syria, Jordan, Uganda, China, and Latin America to remotely monitor government activities and provide increased oversight at a lower cost. They’ve found that this human-centric approach, which embeds technology into existing systems, can close the trust gap currently found in society.
The blog post inspired a barrage of unanticipated discussion online. Unfortunately, in some cases readers (and re-posters) misinterpreted the point as disparaging of blockchain. Rather, the post authors were simply asserting ways to cope with uncertain situations related to piloting blockchain projects. Perhaps the most important outcome of the session and post, however, is that they motivated a coordinated response from several organizations who wanted to delve deeper into the blockchain learning agenda.
To do that, on March 5, 2019, Chemonics, Truepic, and Consensys hosted a roundtable titled “How to Successfully Apply Blockchain in International Development.” All three organizations are applying blockchain in different and complementary ways relevant to international development — including project monitoring, evaluation, learning (MEL) innovations as well as back-end business systems. The roundtable enabled an open dialogue about how blockchain is being tested and leveraged to achieve better international development outcomes. The aim was to explore and engage with real case studies of blockchain in development and share lessons learned within a community of development practitioners in order to reduce the level of opacity surrounding this innovative and rapidly evolving technology.
Three case studies were highlighted:
1. “One-click Biodata Solution” by Chemonics
Chemonics’ Blockchain for Development Solutions Lab designed and implemented a RegTech solution for the USAID foreign assistance and contracting space that sought to leverage the blockchain-based identity platform created by BanQu to dramatically expedite and streamline the collection and verification of USAID biographical data sheets (biodatas), improve personal data protection, and reduce incidents of error and fraud in the hiring process for professionals and consultants hired under USAID contracts.
Chemonics processes several thousand biodatas per year and accordingly devotes significant labor effort and cost to support the current paper-based workflow.
Chemonics’ technology partner, BanQu, used a private, permissioned blockchain on the Ethereum network to pilot a biodata solution.
Chemonics successfully piloted the solution with BanQu, resulting in 8 blockchain-based biodatas being fully processed in compliance with donor requirements.
Improved data protection was a priority for the pilot. One goal of the solution was to make it possible for individuals to maintain control over their back-up documentation, like passports, diplomas, and salary information, which could be shared temporarily with Chemonics through the use of an encrypted key, rather than having documentation emailed and saved to less secure corporate digital file systems.
Following the pilot, Chemonics determined through qualitative feedback that users across the biodata ecosystem found the blockchain solution to be easy to use and succeeded at reducing level of effort on the biodata completion process.
Chemonics also compiled lessons-learned, including refinements to the technical requirements, options to scale the solution, and additional user feedback and concerns about the technology to inform decision-making around further biodata pilots.
2. Project i2i presented by Consensys
Problem Statement: 35% of the Filipino population is unbanked, and 56% lives in rural areas. The Philippines economy relies heavily on domestic remittances. Unionbank sought to partner with hundreds of rural banks that didn’t have access to electronic banking services that the larger commercial banks do.
In 2017, to continue the Central Bank of the Philippines’ national strategy for financial inclusion, the central banks of Singapore and the Philippines announced that they would collaborate on financial technology by employing the regulatory sandbox approach. This will provide industry stakeholders with the room and time to experiment before regulators enact potentially restrictive policies that could stifle innovation and growth. As part of the agreement, the central banks will share resources, best practices, research, and collaborate to “elevate financial innovation” in both economies.
Solution design assumptions for Philippines context:
It can be easily operated and implemented with limited integration, even in low-tech settings;
It enables lower transaction time and lower transaction cost;
It enables more efficient operations for rural banks, including reduction of reconciliations and simplification of accounting processes.
Unionbank worked with ConsenSys and participating rural banks to create an interbank ledger with tokenization. The payment platform is private, Ethereum-based.
In the initial pilot, 20 steps were eliminated in the process.
Technology partners: ConsenSys, Azure (Microsoft), Kaleido, Amazon Web Services.
Truepic is a technology company specializing in digital image and video authentication. Truepic’s Controlled Capture technology uses cutting-edge computer vision, AI, and cryptography technologies to test images and video for signs of manipulation, designating only those that pass its rigorous verification tests are authenticated. Through the public blockchain, Truepic creates an immutable record for each photo and video captured through this process, such that their authenticity can be proven, meeting the highest evidentiary standards. This technology has been used in over 100 countries by citizen journalists, activists, international development organizations, NGOs, insurance companies, lenders and online platforms.
One of Truepic’s innovative strategic partners, the UN Capital Development Fund (another participant of the roundtable), has been testing the possibility of using this technology for monitoring and evaluation of development projects. For example, the following Truepic tracks the date, time, and geolocation of the latest progress of a factory in Uganda.
Controlled Capture requires Wifi or at least 3G/4G connectivity to fully authenticate images/video and write them to the public blockchain, which can be a challenge in low connectivity instances, for example in least-developed countries for UNCDF.
As a work around to connectivity issues, Truepic’s partners have used Satellite Internet connections – such as a Thuraya or Iridium device to successfully capture verified images anywhere.
Public blockchain – Truepic is currently using two different public blockchains, testing cost versus time in an effort to continually shorten the time from capture to closing chain of custody (currently around 8-12 seconds).
Cost – The blockchain component is not actually too expensive; the heaviest investment is in the computer vision technology used to authenticate the images/video, for example to detect rebroadcasting, as in taking a picture of a picture to pass off the metadata.
Rights of the image is the owner’s – Truepic does not have rights over the image/video but keeps a copy on its servers in case the user’s phone/tablet is lost, stolen, or broken. And most importantly, so that Truepic can produce the original image on its verification page when shared or disseminated publicly.
Court + evidentiary value: the technology and public-facing verification pages are designed to meet the highest evidentiary standards.
Tested in courts; currently being testing at the international level but cannot disclose specifics due to confidentiality reasons.
Privacy and security are key priorities, especially for working in conflict zones, such as Syria. Truepic does not use 2-step authentication because the technology is focused on authenticating the images/video; it is not relevant who the source is and this way it keeps the source as anonymous as possible. Truepic works with its partners to educate on best practices to maintain high levels of anonymity in any scenario.
Biggest challenge is usage by implementing partners – it is very easy to use, however the behavioral change to use the platform has been challenging.
Other challenge: you bring the solution to an implementer, and the implementer says you have to get the donor to integrate it into their RFP scopes; then the donors recommend that we speak to implementing partners.
Storage capacity issues? Storage is not currently a problem; Truepic has plans in place to address any storage issues that may arise with scale.
How did implementers measure success in their blockchain pilots?
Measurement was both quantitative and qualitative
The organizations worked with clients to ensure people who needed the MEL were able to access and use it
Concerns with publicizing information or difficulties with NDAs were handled on a case-by-case basis
The original search for evidence on the impact of blockchain sought a level of data fidelity that is difficult to capture and validate, even under the least challenging circumstances. Not finding it at that time, the research team sought the next best solution, which was not to discount the technology, but to suggest ways to cope with the knowledge gaps they encountered by recommending a learning agenda. The roundtable helped to stimulate robust conversation of the three case studies, contributing to that learning agenda.
Most importantly, the experience highlighted several interesting takeaways about innovation in public-private partnerships more broadly:
The initial MERL Tech session publicly and transparently drew attention to the gaps that were identified from the researchers’ thirty thousand-foot view of evaluating innovation.
This transparency drew out engagement and collaboration between and amongst those best-positioned to move quickly and calibrate effectively with the government’s needs: the private sector.
This small discussion that focused on the utility and promise of blockchain highlighted the broader role of government (as funder/buyer/donor) in both providing the problem statement and anchoring the non-governmental, private sector, and civil society’s strengths and capabilities.
One year later…
So, a year after the much-debated blockchain blogpost, what has changed? A lot. There is a growing body of reporting that adds to the lessons learned literature and practical insights from projects that were powered or supported by blockchain technology. The question remains: do we have any greater documentation or evidence of the results blockchain was purported to have achieved in these claims? It seems that while reporting has improved, it still has a long way to go.
It’s worth pointing out that the international development industry, with far more experts and funding dedicated to working on improving MERL than emerging tech companies, also has some distance to go in meeting its own evidence standards. Fortunately, the volume and frequency of hype seems to have decreased (or perhaps the news cycle has simply moved on?), thereby leaving blockchain (and its investors and developers) the space they need to refine the technology.
In closing, we, like the co-authors of the 2018 post, remain optimistic that blockchain, a still emerging technology, will be given the time and space needed to mature and prove its potential. And, whether you believe in “crypto-winter” or not, hopefully the lull in the hype cycle will prove to be the breathing space that blockchain needs to keep evolving in a productive direction.
Shailee Adinolfi: Shailee works on Public Sector solutions at ConsenSys, a global blockchain technology company building the infrastructure, applications, and practices that enable a decentralized world. She has 20 years of experience at the intersection of technology, financial inclusion, trade, and government, including 11 years on USAID funded projects in Africa, Asia and the Middle East.
John Burg: John was a co-author on the original MERL Tech DC 2018 blog, referenced in this blog. He is an international development professional with almost 20 years of cross-sectoral experience across 17 countries in six global regions. He enjoys following the impact of emerging technology in international development contexts.
Tara Vassefi: Tara is Truepic’s Washington Director of Strategic Initiatives. Her background is as a human rights lawyer where she worked on optimizing the use of digital evidence and understanding how the latest technologies are used and weighed in courts around the world.
There is no real
evidence base about what does and does not work for applying blockchain
technology to interventions seeking social impacts. Most current blockchain interventions are
driven by developers (programmers) and visionary entrepreneurs. There is little
thinking in current blockchain interventions around designing for “social”
impact (there is an over abundant trust in technology to achieve the outcomes
and little focus on the humans interacting with the technology) and integrating
relevant evidence from behavioral economics, behavior change design, human
centered design, etc.
To build the needed evidence base, Monitoring, Evaluation, Research and Learning (MERL) practitioners will have to not only get to know the broad strokes of blockchain technology but the specifics of token design and tokenomics (the political economics of tokenized ecosystems). Token design could become the focal point for MERL on blockchain interventions since:
If not all, the vast majority of blockchain interventions will involve some type of desired behavior change
The token provides the link between the ledger (which is the blockchain) and the social ecosystem created by the token in which the behavior change is meant to happen
Hence the token is the “nudge” meant to leverage behavior change in the social ecosystem while governing the transactions on the blockchain ledger.
(While this blog will focus on these points, it will not go into a full discussion of what tokens are and how they create ecosystems. But there are some very good resources out there that do this which you can review at your leisure and to the degree that works for you. The Complexity Institute has published a book exploring the various attributes of complexity and main themes involved with tokenomics while Outlier Ventures has published, what I consider, to be the best guidance on token design. The Outlier Ventures guidance contains many of the tools MERL practitioners will be familiar with (problem analysis, stakeholder mapping, etc.) and should be consulted.)
Hence it could be that by understanding token design and its requirements and mapping it against our current MERL thinking, tools and practices, we can develop new thinking and tools that could be the beginning point in building our much-needed evidence base.
What is a “blockchain intervention”?
As MERL practitioners
we roughly define an “intervention” as a group of inputs and activities meant
to leverage outcomes within a given eco-system.
“Interventions” are what we are usually mandated to asses, evaluate and
When thinking about MERL and blockchain, it is useful to think of two categories of “blockchain interventions”.
1) Integrating the blockchain into MERL data collection, entry, management, analysis or dissemination practices and
2) MERL strategies for interventions using the blockchain in some way shape or form.
Here we will focus on the #2 and in so doing demonstrate that while the blockchain is an innovative, potentially disruptive technology, evaluating its applications on social outcomes is still an issue of assessing behavior change against dimensions of intervention design.
Designing for Behavior Change
We generally design
interventions (programs, projects, activities) to “nudge” a certain type of behavior (stated as
outcomes in a theory of change) amongst a certain population (beneficiaries,
stakeholders, etc.). We often attempt to
integrate mechanisms of change into our intervention design, but often do not
for a variety of reasons (lack of understanding, lack of resources, lack of
political will, etc.). This lack of due
diligence in design is partly responsible for the lack of evidence around what
works and what does not work in our current universe of interventions.
Enter blockchain technology, which as MERL practitioners, we will be responsible for assessing in the foreseeable future. Hence, we will need to determine how interventions using the blockchain attempt to nudge behavior, what behaviors they seek to nudge, amongst whom, when and how well the design of the intervention accomplishes these functions. In order to do that we will need to better understand how blockchains use tokens to nudge behavior.
The Centrality of the Token
We have all used tokens before. Stores issue coupons that can only be used at those stores, we get receipts for groceries as soon as we pay, arcades make you buy tokens instead of just using quarters. The coupons and arcade tokens can be considered utility tokens, meaning that they can only be used in a specific “ecosystem” which in this case is a store and arcade respectively. The grocery store receipt is a token because it demonstrates ownership, if you are stopped on the way out the store and you show your receipt you are demonstrating that you now have rights to ownership over the foodstuffs in your bag.
Whether you realize
it or not at the time, these tokens are trying to nudge your behavior. The store gives you the coupon because the
more time you spend in their store trying to redeem coupons, the greatly
likelihood you will spend additional money there. The grocery store wants you to pay for all
your groceries while the arcade wants you to buy more tokens than you end up
If needed, we could design
MERL strategies to assess how well these different tokens nudged the desired
behaviors. We would do this, in part, by thinking about how each token is
designed relative to the behavior it wants (i.e. the value, frequency and
duration of coupons, etc.).
Thinking about these ecosystems and their respective tokens will help us understand the interdependence between 1) the blockchain as a ledger that records transactions, 2) the token that captures the governance structures for how transactions are stored on the blockchain ledger as well as the incentive models for 3) the mechanisms of change in the social eco-system created by the token.
Figure #1: The inter-relationship between the blockchain
(ledger), token and social eco-system
Token Design as Intervention Design
Just as we assess
theories of change and their mechanisms against intervention design, we will
assess blockchain based interventions against their token design in much the
same way. This is because blockchain
tokens capture all the design dimensions of an intervention; namely the problem
to be solved, stakeholders and how they influence the problem (and thus the
solution), stakeholder attributes (as mapped out in something like a
stakeholder analysis), the beneficiary population, assumptions/risks, etc.
Outlier Ventures has adapted what they call a Token
Utility Canvas as a milestone in
their token design process. The canvas
can be correlated to the various dimensions of an evaluability
assessment tool (I am using the evaluability
assessment tool as a demonstration of the necessary dimensions of an
interventions design, meaning that the evaluability assessment tool assesses
the health of all the components of an intervention design). The Token Utility Canvas is a useful
milestone in the token design process that captures many of the problem
diagnostic, stakeholder assessment and other due diligence tools that are
familiar to MERL practitioners who have seen them used in intervention
design. Hence token design could be
largely thought of as intervention design and evaluated as such.
Comparing Token Design with Dimensions of Program Design (as represented in an
This table is not meant to be exhaustive and not all of the fields will be explained here but in general, it could be a useful starting point in developing our own thinking and tools for this emerging space.
The Token as a Tool
for Behavior Change
Coming up with a taxonomy of blockchain interventions and relevant tokens is a necessary task, but all blockchains that need to nudge behavior will have to have a token.
Consider supply chain management. Blockchains are increasingly being used as the ledger system for supply chain management. Supply chains are typically comprised of numerous actors packaging, shipping, receiving, applying quality control protocols to various goods, all with their own ledgers of the relevant goods as they snake their way through the supply chain. This leads to ample opportunities for fraud, theft and high costs associated with reconciling the different ledgers of the different actors at different points in the supply chain. Using the blockchain as the common ledger system, many of these costs are diminished as a single ledger is used with trusted data, hence transactions (shipping, receiving, repackaging, etc.) can happen more seamlessly and reconciliation costs drop.
However even in “simple” applications such as this there are behavior change implications. We still want the supply chain actors to perform their functions in a manner that adds value to the supply chain ecosystem as a whole, rewarding them for good behavior within the ecosystem and punishing for bad.
What if those shippers trying to pass on a faulty product had
already deposited a certain value of currency in an escrow account (housed in a
contract on the blockchain)? Meaning that if they are found to be
attempting a prohibited behavior (passing on faulty products) they surrender a
certain amount automatically from the escrow account in the blockchain smart
contract. How much should be deposited
in the escrow account? What is the ratio
between the degree of punishment and undesired action? These are behavior questions around a
mechanism of change that are dimensions of current intervention designs and will
be increasingly relevant in token design.
The point of this is to demonstrate that even “benign”
applications of the blockchain, like supply chain management, have behavior
change implications and thus require good due diligence in token design.
There is a lot that could be said about the validation function
of this process, who validates that the bad behavior has taken place and should
be punished or that good behavior should be rewarded? There are lessons to be learned from results
based contracting and the role of the validator in such a contracting
vehicle. This “validating” function will
need to be thought out in terms of what can be automated and what needs a
“human touch” (and who is responsible, what methods they should use,
Implications for MERL
If tokens are fundamental to MERL strategies for blockchain
interventions, there are several critical implications:
MERL practitioners will need to be heavily integrated into the due diligence processes and tools for token design
MERL strategies will need to be highly formative, if not developmental, in facilitating the timeliness and overall effectiveness of the feedback loops informing token design
New thinking and tools will need to be developed to assess the relationships between blockchain governance, token design and mechanisms of change in the resulting social ecosystem.
The opportunity cost for impact and “learning” could go up the less MERL practitioners are integrated into the due diligence of token design. This is because the costs to adapt token design are relatively low compared to current social interventions, partly due to the ability to integrate automated feedback.
Blockchain based interventions present us with significant learning opportunities due to our ability to use the technology itself as a data collection/management tool in learning about what does and does not work. Feedback from an appropriate MERL strategy could inform decision making around token design that could be coded into the token on an iterative basis. For example as incentives of stakeholder’s shift (i.e. supply chain shippers incur new costs and their value proposition changes) token adaptation can respond in a timely fashion so long as the MERL feedback that informs the token design is accurate.
There is need to determine what components of these feedback
loops can be completed by automated functions and what requires a “human
touch”. For example, what dimensions of
token design can be informed by smart infrastructure (i.e. temp gauges on
shipping containers in the supply chain) versus household surveys completed by
enumerators? This will be a task to
complete and iteratively improve starting with initial token design and lasting
through the lifecycle of the intervention.
Token design dimensions, outlined in the Token Utility Canvas, and decision-making
will need to result in MERL questions that are correlated to the best strategy
to answer them, automated or human, much the same as we do now in current
While many of our current due diligence tools used in both
intervention and evaluation design (things like stakeholder mapping, problem
analysis, cost benefit analysis, value propositions, etc.), will need to be
adapted to the type of relationships that are within a tokenized eco-systems. These include the relationships of influence
between the social eco-system as well as the blockchain ledger itself (or more
specifically the governance of that ledger) as demonstrated in figure #1.
This could be our, as MERL practitioners, biggest priority. While blockchain interventions could create incredible opportunities for social experimentation, the need for human centered due diligence (incentivizing humans for positive behavior change) in token design is critical. Over reliance on the technology to drive social outcomes is already a well evidenced opportunity cost that could be avoided with blockchain-based solutions if the gap between technologists, social scientists and practitioners can be bridged.
Guest post by Michael Cooper, a former DoS, MCC Associate Director for Policy and Evaluation who now runs Emergence. Mike advises numerous donors, private clients and foundations on program design, MEL, adaptive management and other analytical functions.
International development projects using the blockchain in
some way are increasing at a rapid
rate and our window for developing evidence around what does and does not
work (and more importantly why) is narrow before we run into un-intended
consequences. Given that blockchain is a
highly disruptive technology, these un-intended consequences could be significant,
creating a higher urgency to generate the evidence to guide how we design and
evaluate blockchain applications.
Our window for developing evidence around what does and does not work (and more importantly why) is narrow before we run into un-intended consequences.
To inform this discussion, Emergence has put out a working
paper that outlines 1.) what the blockchain is, 2.) how it can be used to
leverage behavior change outcomes in international development projects and 3.)
the implications for how we could design and evaluate blockchain based
interventions. The paper utilizes systems
and behaviorism principles in comparing how we currently design behavior change
interventions to how we could design/evaluate the same interventions using the
blockchain. This article summarizes the
main points of the paper and its conclusions to generate discussion around how
to best produce the evidence we need to fully realize the potential of
blockchain interventions for social impact.
Given the scope of possibilities surrounding the blockchain,
both in how it could be used and in the impact it could leverage, the
implications for how MEL is conducted are significant. The time is long gone where value adding MEL practitioners
are not involved in intervention design.
Blockchain based interventions will require additional integration of
MEL skill sets in the early design phases since so much will need to be
“tested” to determine what is and is not working. While rigid statistical evaluations will
needed for some of these blockchain based interventions, the level of
complexity involved and the lack of an evidence base indicate that more
flexible, adaptive and more formative MEL approaches will be needed. The more these approaches are proactive and
involved in intervention design, the more frequent and informative the feedback
loops will be into our evidence base.
The Blockchain as a Decentralizing
At its core, the blockchain is just a ledger but the
importance of ledgers in how society functions cannot
be understated. Ledgers, and the
control of them, are crucial in how supply chains are managed, financial
transactions are conducted, how data is shared, etc. Control of ledgers is a primary factor in
limiting access to life changing goods and services, especially for the worlds’
poor. In part, the discussion over decentralization
is essentially a discussion over who owns and how ledgers are managed.
has been a prominent theme in international development and there is strong
evidence of its positive impact across various sectors, especially regarding
local service delivery. One of the
primary value adds of decentralization is empowering those further from traditional
concentrations of power to have more authority over the problems that impact
them. As a decentralizing technology,
the blockchain holds a lot of potential in reaching these same impacts from
decentralization (empowerment, etc.) in a more efficient and effective manner partly
due to its ability to better align interests around common problems. With better aligned interests, less resources
(inputs) are needed to try and facilitate a desired behavior change.
Up until now, efforts of international development actors have
focused on “nudging” behavior change amongst stakeholders and in very rare
cases, such as in results based financing, give loosely defined parameters to
implementers with less emphasis on the manner in which outcomes are
achieved. Both of these approaches are
relevant in the design and testing of blockchain based interventions but they
will be integrated in unique new ways that will require new thinking and skills
sets amongst practitioners.
Current Designing and
Evaluating for Behavior Change
MEL usually starts with the relevant theory of change,
namely what mechanisms bring about targeted behavior change and how. Recent years have seen a focus on how
behavior change is achieved through an understanding
of mindsets and how they can be nudged
to achieve a social outcome. However the
international development space has recognized the limitations of designing
interventions that attempt to nudge behavior change. These limitations center around the level of
complexity involved, the inability to recognize and manage this complexity and lack
of awareness about the root causes of problems.
Hence the rise in things like results
based financing where the type of prescribed top-down causal pathway
(usually laid out in a theory of change) is not as heavily emphasized as in
more traditional interventions. Donors
using this approach can still mandate certain principles of implementation
(such as the inclusion of vulnerable populations, environmental safeguards,
timelines, etc.) but there is much more flexibility to create a causal pathway
to achieve the outcome.
Or, for example, take the popular PDIA approach where the focus is on
iteratively identifying and solving problems encountered on the pathway to
reform. These efforts do not start with
a mandated theory of change, but instead start with generally described
targeted outcomes and then the pathway to those outcomes is iteratively
created, similar to what Lant Pritchett has called “crawling
the design space”. Such an approach
has large overlaps with adaptive management practices and other more
integrative MEL frameworks and could lend themselves to how blockchain based
interventions are designed, implemented and evaluated.
How the Blockchain
Could Achieve Outcomes and Implications for MEL
Because of its decentralizing
effects, any theory of change for a blockchain based intervention could
include some possible common attributes that influence how outcomes are
Empowerment of those closest to problems to
inform the relevant solutions
Alleviation of traditional intermediary services
and relevant third party actors
Assessing these three attributes, and how they influence
outcomes, could be the foundation of any appropriate MEL strategy for a
blockchain-based intervention. This is
because these attributes are the “value add” of a blockchain-based
intervention. For example, traditional
financial inclusion interventions may seek to extend financial services of a
bank to rural areas through digital money, extension agents, etc. A blockchain-based solution, however, may cut
out the bank entirely and empower local communities to receive financial
services from completely new providers from anywhere in the world on much more
affordable terms in and in a much more convenient manner. Such a solution could see an alignment of
interests amongst producers and consumers of these services since the new
relationships are mutually serving.
Because of this alignment there is a less of a need, or even less of a
benefit, of having donors script out the causal pathway for the outcomes to be
achieved. Because of this alignment of
interests, those closest to the problem(s) and solutions can work it out
because it is in their interest to do so.
Hence while a MEL framework for such a project could still use more standardized measures around outcomes like increased access to financial services and could even use statistical methods to evaluate questions around attributable changes in poverty status; there will need to be adaptive and formative MEL that assess the dynamics of these attributes given their criticality to whether and how outcomes could be achieved. The dynamics between these attributes and the surrounding social eco-system have the potential to be very fluid (going back to the disruptive nature of blockchain technology), hence flexible MEL will be required to respond to new trends as they emerge.
Table: Blockchain Intervention Attributes and the Skill Sets
to Assess Them
Empowerment of those closest to problems to inform the
Problem driven design and MEL approach,
stakeholder mapping (to identify relevant actors) Decentralization focused MEL (MEL that focuses
on outcomes associated with decentralization)
Alignment of interests
Political economy analysis to identify
incentives and interests Adaptive MEL to assess shifting alignment of interest
between various actors
Alleviation of traditional intermediary services
Political economy analysis to inform risk
mitigation strategy for potential spoilers and relevant MEL
While there will need to be standard accountability and
other uses, feedback from an appropriate MEL strategy could have two primary
end uses in a blockchain based intervention: governance and trust.
The Role of
Governance and Trust
governance sets outs the rules for how consensus (ie. agreement) is achieved
for deciding what transactions are valid on a blockchain. While this may sound mundane it is critical
for achieving outcomes since how the blockchain is governed decides how well
those closest to the problems are empowered to identify and achieve solutions
and aligned interests. Hence the governance framework for the blockchain will
need to be informed by an appropriate MEL strategy. A giant learning gap we currently have is how
to iteratively adapt blockchain governance structures, using MEL feedback, into
increasingly more efficient versions.
Closing this gap will be critical to assessing the cost effectiveness of
blockchain based solutions over other solutions (ie. alternatives/cost benefit
analysis tools) as well as maximizing impact.
A giant learning gap we currently have is how to iteratively adapt blockchain governance structures, using MEL feedback, into increasingly more efficient versions.
Another focus of an appropriate MEL strategy would be to
facilitate trust in the blockchain-based solution amongst users much the same
as other technology-led solutions like mobile money or pay as you go metering
for service delivery. This includes not
only the digital interface between the user and the technology (a phone app,
SMS or other interface) but other dimensions of “trust” that would facilitate
uptake of the technology. These
dimensions of trust would be informed by an analysis of the barriers to uptake
of the technology amongst intended users, given it could be an entirely new
service for beneficiaries or an old service delivered in a new fashion. There is already a good evidence base around
what works in this area (ie. marketing and communication tools for digital
financial services, assistance in completing registration paperwork for pay as
you go metering, etc.).
The Road Ahead
There is A LOT we need to learn and a short time to do it in
before we feel the negative effects from a lack of preparedness. This risk is heightened when you consider
that the international development industry has a poor
track record of designing and evaluating technology-led solutions
(primarily due to the fact that these projects usually neglect uptake of the
technology and operate on the assumption that the technology will drive
outcomes instead of users using the technology as a tool to drive the
The lessons from MEL in results based financing could be
especially informative to the future of evaluating blockchain-based solutions
given their similarities in letting solutions work themselves out and the role
of the “validator” in ensuring outcomes are achieved. In fact the blockchain has already
been used in this role in some simple output based programming.
As alluded to, pre-existing MEL skill sets can add a lot of
value to building an evidence base but MEL practitioners will need to develop a
greater understanding of the attributes of blockchain technology, otherwise our
MEL strategies will not be suited to blockchain based programming.
We attended the MERL Tech DC 2018 conference held on Sept. 7, 2018 and led a session related to the creation of a learning agenda to help MERL practitioners gauge the value of blockchain technology for development programming.
As a trio of monitoring, evaluation, research, and learning, (MERL) practitioners in international development, we are keenly aware of the quickly growing interest in blockchain technology. Blockchain is a type of distributed database that creates a nearly unalterable record of cryptographically secure peer-to-peer transactions without a central, trusted administrator. While it was originally designed for digital financial transactions, it is also being applied to a wide variety of interventions, including land registries, humanitarian aid disbursement in refugee camps, and evidence-driven education subsidies. International development actors, including government agencies, multilateral organizations, and think tanks, are looking at blockchain to improve effectiveness or efficiency in their work.
Naturally, as MERL practitioners, we wanted to learn more. Could this radically transparent, shared database managed by its users, have important benefits for data collection, management, and use? As MERL practice evolves to better suit adaptive management, what role might blockchain play? For example, one inherent feature of blockchain is the unbreakable and traceable linkages between blocks of data. How might such a feature improve the efficiency or effectiveness of data collection, management, and use? What are the advantages of blockchain over other more commonly used technologies? To guide our learning we started with an inquiry designed to help us determine if, and to what degree, the various features of blockchain add value to the practice of MERL. With our agenda established, we set out eagerly to find a blockchain case study to examine, with the goal of presenting our findings at the September 2018 MERL Tech DC conference.
What we did
We documented 43 blockchain use-cases through internet searches, most of which were described with glowing claims like “operational costs… reduced up to 90%,” or with the assurance of “accurate and secure data capture and storage.” We found a proliferation of press releases, white papers, and persuasively written articles. However, we found no documentation or evidence of the results blockchain was purported to have achieved in these claims. We also did not find lessons learned or practical insights, as are available for other technologies in development.
We fared no better when we reached out directly to several blockchain firms, via email, phone, and in person. Not one was willing to share data on program results, MERL processes, or adaptive management for potential scale-up. Despite all the hype about how blockchain will bring unheralded transparency to processes and operations in low-trust environments, the industry is itself opaque. From this, we determined the lack of evidence supporting value claims of blockchain in the international development space is a critical gap for potential adopters.
What we learned
Blockchain firms supporting development pilots are not practicing what they preach — improving transparency — by sharing data and lessons learned about what is working, what isn’t working, and why. There are many generic decision trees and sales pitches available to convince development practitioners of the value blockchain will add to their work. But, there is a lack of detailed data about what happens when development interventions use blockchain technology.
Since the function of MERL is to bridge knowledge gaps and help decision-makers take action informed by evidence, we decided to explore the crucial questions MERL practitioners may ask before determining whether blockchain will add value to data collection, management, and use. More specifically, rather than a go/no-go decision tool, we propose using a learning agenda to probe the role of blockchain in data collection, data management and data use at each stage of project implementation.
“Before you embark on that shiny blockchain project, you need to have a very clear idea of why you are using a blockchain.”
Typically, “A learning agenda is a set of questions, assembled by an organization or team, that identifies what needs to be learned before a project can be planned and implemented.” The process of developing and finding answers to learning questions is most useful when it’s employed continuously throughout the duration of project implementation, so that changes can be made based on what is learned about changes in the project’s context, and to support the process of applying evidence to decision-making in adaptive management.
We explored various learning agenda questions for data collection, management and use that should continue to be developed and answered throughout the project cycle. However, because the content of a learning agenda is highly context-dependent, we focused on general themes. Examples of questions that might be asked by beneficiaries, implementing partners, donors, and host-country governments, include:
What could each of a project’s stakeholder groups gain from the use of blockchain across the stages of design and implementation, and, would the benefits of blockchain incentivize them to participate?
Can blockchain resolve trust or transparency issues between disparate stakeholder groups, e.g. to ensure that data reported represent reality, or that they are of sufficient quality for decision-making?
Are there less-expensive, more appropriate, or easier to execute, existing technologies that already meet each group’s MERL needs?
Are there unaddressed MERL management needs blockchain could help address, or capabilities blockchain offers that might inspire new and innovative thinking about what is done, and how it gets done?
This approach resonated with other MERL for development practitioners
We presented this approach to a diverse group of professionals at MERL Tech DC, including other MERL practitioners and IT support professionals, representing organizations from multilateral development banks to US-based NGOs. Facilitated as a participatory roundtable, the session participants discussed how MERL professionals could use learning agendas to help their organizations both decide whether blockchain is appropriate for intervention design, as well as guide learning during implementation to strengthen adaptive management.
Questions and issues raised by the session participants ranged widely, from how blockchain works, to expressing doubt that organizational leaders would have the risk appetite required to pilot blockchain when time and costs (financial and human resource) were unknown. Session participants demonstrated an intense interest in this topic and our approach. Our session ran over time and side conversations continued into the corridors long after the session had ended.
Our approach, as it turns out, echoes others in the field who question whether the benefits of blockchain add value above and beyond existing technologies, or accrue to stakeholders beyond the donors that fund them. This trio of practitioners will continue to explore ways MERL professionals can help their teams learn about the benefits of blockchain technology for international development. But, in the end, it may turn out that the real value of blockchain wasn’t the application of the technology itself, but rather as an impetus to question what we do, why we do it, and how we could do it better.
MERL Tech DC kicked off with a pre-conference workshop on September 5th that focused on what the Blockchain is and how it could influence MEL.
The workshop was broken into four parts: 1) blockchain 101, 2) how the blockchain is influencing and could influence MEL, 3) case studies to demonstrate early lessons learned, and 4) outstanding issues and emerging themes.
This blog focuses and builds on the fourth area. At the end, we provide additional resources that will be helpful to all interested in exploring how the blockchain could disrupt and impact international development at large.
Workshop Takeaways and Afterthoughts
For our purposes here, we have distilled some of the key takeaways from the workshop. This section includes a series of questions that we will respond to and link to various related reference materials.
Who are the main blockchain providers and what are they offering?
Any time a new “innovation” is introduced into the international development space, potential users lack knowledge about what the innovation is, the value it can add, and the costs of implementing it. This lack of knowledge opens the door for “snake oil salesmen” who engage in predatory attempts to sell their services to users who don’t have the knowledge to make informed decisions.
We’ve seen this phenomenon play out with blockchain. Take, for example, the numerous Initial Coin Offerings (ICO’s) that defrauded their investors, or the many instances of service providers offering low quality blockchain education trainings and/or project solutions.
Education is the best defense against being taken advantage of by snake oil salesmen. If you’re looking for general education about blockchain, we’ve included a collection of helpful tools in the table below. If your group is working to determine whether a blockchain solution is right for the problem at hand, the USAID Blockchain Primer offers easy to use decision trees that can help you. Beyond these, Mercy Corp has just published Block by Block, which outlines the attributes of various distributed ledgers along some very helpful lines that are useful when considering what distributed ledger technology to use.
Words of warning aside, there are agencies that provide genuine blockchain solutions. For a full list of providers please visit www.blockchainomics.tech, an information database run by The Development CAFE on all things blockchain.
Bottom Line: Beware the snake oil salesmen preaching the benefits of blockchain but silent on the feasibility of their solution. Unless the service provider is just as focused on your problem as you are, be wary that they are just trying to pitch a solution (viable or not) and not solve the problem. Before approaching the companies or service providers, always identify your problem and see if Blockchain is indeed a viable solutions.
How does governance of the blockchain influence its sustainability?
In the past, we’ve seen technology-led social impact solutions make initial gains that diminished over time until there is no sustained impact. Current evidence shows that many solutions of this sort fail because they are not designed to solve a specific problem in a relevant ecosystem. This insight has given rise to the Digital Development Principles and the Ethical Considerations that should be taken into account for blockchain solutions.
Bottom Line: Impact is achieved and sustained by the people who use a tool. Thus, blockchain, as a tool, does not sustain impacts on its own. People do so by applying knowledge about the principles and ethics needed for impact. Understanding this, our next step is to generate more customized principles and ethical considerations for blockchain solutions through case studies and other desperately needed research.
How do the blockchain, big data, and Artificial Intelligence influence each other?
The blockchain is a new type of distributed ledger system that could have massive social implications. Big Data refers to the exponential increase in data we experience through the Internet of Things (IoT) and other data sources (Smart Infrastructure, etc.). Artificial Intelligence (AI) assists in identifying and analyzing this new data at exponentially faster rates than is currently the case.
Blockchain is a distributed ledger, in essence, a database of transactions, just like any other database, it’s a repository, and it is contributing to the growth of Big Data. AI can be used to automate the process of data entry into the blockchain. This is how the three are connected.
The blockchain is considered a leading contender as the ledger of choice for big data because: 1) due to its distributed nature it can handle much larger amounts of data in a more secure fashion than is currently possible with cloud computing, and 2) it is possible to automate the way big data is uploaded to the blockchain. AI tools are easily integrated into blockchain functions to run searches and analyze data, and this opens up the capacity to collect, analyze and report findings on big data in a transparent and secure manner more efficiently than ever before.
Bit by Bit is a very readable and innovative overview of how to conduct social science research in the digital age of big data, artificial intelligence and the blockchain. It gives the reader a quality introduction into some of the dominant themes and issues to consider when attempting to evaluate either a technology lead solution or use technology to conduct social research.
Given its immutability, how can an adaptive management system work with the blockchain?
This is a critical point. The blockchain is an immutable record, it is almost impossible (meaning it has never been done and there are no simulations where current technology is able to take control of a properly designed blockchain) to hijack, hack, or alter. Thus the blockchain provides the security needed to mitigate corruption and facilitate audits.
This immutability does not mitigate any type of adaptive management approach, however. Adaptive Management requires small iterative course corrections informed by quality data around what is and is not working. This data record and the course corrections provide a rich data set that is extremely valuable to replication efforts because they subvert the main barrier to replication — lack of data on what does and does not work. Hence in this case the immutability of the blockchain is a value add to Adaptive Management. This is more of a question of good adaptive management practices rather than whether the blockchain is a viable tool for these purposes.
It is important to note that you can append information on blocks (not amend), so there will always be a record of previous mistakes (auditability), but the most recent layer of truth is what’s being viewed/queried/verified, etc. Hence, immutability is not a hurdle but a help.
What are the first steps an organization should take when deciding on whether to adopt a blockchain solution?
Each problem that an organization faces is unique, but the following simple steps can help one make a decision:
Identify your problem (using tools such as Developmental Evaluation or Principles of Digital Development)
Understand the blockchain technology, concepts, functionality, requirements and cost
See if your problem can be solved by blockchain rather than a centralized database
Consider the advantages and disadvantages
Identify the right provider and work with them in developing the blockchain
Consider ethical principles and privacy concerns as well as other social inequalities
Deploy in pilot phases and evaluate the results using an agile approach
What can be done to protect PII and other sensitive information on a blockchain?
Blockchain uses cryptography to store its data. That PII and other information cannot be viewed by anyone other than those who have access to the ‘keys’. While developing a blockchain, it’s important to ensure that what goes in is protected and that access to is regulated. Another critical step is promoting literacy on the use of blockchain and its features among stakeholders.
References Correlated to Take Aways
This table organizes current reference materials as related to the main questions we discussed in the workshop. (The question is in the left hand column and the reference material with a brief explanation and hyperlink is in the right hand column).
Resources and Considerations
Who are the main blockchain platforms? Who are the providers and what are they offering?
IBM, ConsenSys, Microsoft, AWS, Cognizant, R3, and others, are offering products and enterprise solutions.
Block by Block is a valuable comparison tool for assessing various platforms.
How does governance of the blockchain influence its sustainability?
See Beeck Center’s Blockchain Ethical Design Framework. Decentralization (how many nodes), equity amongst nodes, rules, transparency are all factors in long-term sustainability. Likewise the Principles for Digital Development have a lot of evidence behind them for their contributions to sustainability.
How do the blockchain, big data and Artificial Intelligence influence each other?
They can be combined in various ways to strengthen a particular service or product. There is no blanket approach, just as there is not blanket solution to any social impact problem. The key is to know the root cause of the problem at hand and how the function of each tool used separately and in conjunction can address these root causes.
Given its immutability, how can an adaptive management system work with the blockchain?
Ask how mistakes are corrected when creating a customized solution, or purchasing a product. Usually, there will be a way to do that, through an easy to use, user interface.
What are the first steps an organization should take when they are deciding on whether to adopt a blockchain solution?
Participate in demos, and test some of the solutions for your own purposes or use cases. Use the USAID Blockchain Primer and reach out to trusted experts to provide advice. Given that the blockchain is primarily open source code, once you have decided that a blockchain is a viable solution for your problem, GitHub is full of open source code that you can modify for your own purposes.
This year at MERL Tech DC, in addition to the regular conference on September 6th and 7th, we’re offering two full-day, in-depth workshops on September 5th. Join us for a deeper look into the possibilities and pitfalls of Blockchain for MERL and Big Data for Evaluation!
What can Blockchain offer MERL? with Shailee Adinolfi, Michael Cooper, and Val Gandhi, co-hosted by Chemonics International, 1717 H St. NW, Washington, DC 20016.
Tired of the blockchain hype, but still curious on how it will impact MERL? Join us for a full day workshop with development practitioners who have implemented blockchain solutions with social impact goals in various countries. Gain knowledge of the technical promises and drawbacks of blockchain technology as it stands today and brainstorm how it may be able to solve for some of the challenges in MERL in the future. Learn about ethical design principles for blockchain and how to engage with blockchain service providers to ensure that your ideas and programs are realistic and avoid harm. See the agenda here.
Big Data and Evaluation with Michael Bamberger, Kerry Bruce and Peter York, co-hosted by the Independent Evaluation Group at the World Bank – “I” Building, Room: I-1-200, 1850 I St NW, Washington, DC 20006
Join us for a one-day, in-depth workshop on big data and evaluation where you’ll get an introduction to Big Data for Evaluators. We’ll provide an overview of applications of big data in international development evaluation, discuss ways that evaluators are (or could be) using big data and big data analytics in their work. You’ll also learn about the various tools of data science and potential applications, as well as run through specific cases where evaluators have employed big data as one of their methods. We will also address the important question as to why many evaluators have been slower and more reluctant to incorporate big data into their work than have their colleagues in research, program planning, management and other areas such as emergency relief programs. Lastly, we’ll discuss the ethics of using big data in our work. See the agenda here!
Enabling trust in an efficient manner is the primary innovation that the blockchain delivers through the use of cryptology and consensus algorithms. Trust is usually a painstaking relationship building effort that requires iterative interactions to build. The blockchain alleviates the need for much of the resources required to build this trust, but that does not mean that stakeholders will automatically trust the blockchain application. There will still need to be trust building mechanisms with any blockchain application and MEL practitioners are uniquely situated to inform how these trust relationships can mature.
Function of trust in the blockchain
Trust is expensive. You pay fees to banks who provide confidence to sellers who take your debit card as payment and trust that they will receive funds for the transaction. Agriculture buyers pay fees to third parties (who can certify that the produce is organic, etc.) to validate quality control on products coming through the value chain Often sellers do not see the money from debit card transaction in their accounts automatically and agriculture actors perpetually face the pressures resulting from being paid for goods and/or services they provided weeks previously. The blockchain could alleviate much of these harmful effects by substituting trust in humans by trust in math.
We pay these third parties because they are trusted agents, and these trusted agents can be destructive rent seekers at times; creating profits that do not add value to the goods and services they work with. End users in these transactions are used to using standard payment services for utility bills, school fees, etc. This history of iterative transactions has resulted in a level of trust in these processes. It may not be equitable but it is what many are used to and introducing an innovation like blockchain will require an understanding of how these processes are influencing stakeholders, their needs and how they might be nudged to trust something different like a blockchain application.
How MEL can help understand and build trust
Just as microfinance introduced new methods of sending/receiving money and access to new financial services that required piloting different possible solutions to build this understanding, so will blockchain applications. This is an area where MEL can add value to achieving mass impact, by designing the methods to iteratively build this understanding and test solutions.
MEL has done this before. Any project that requires relationship building should be based on understanding the mindset and incentives for relevant actions (behavior) amongst stakeholders to inform the design of the “nudge” (the treatment) intended to shift behavior.
Many of the programs we work on as MEL practitioners involve various forms and levels of relationship building, which is essentially “trust”. There have been many evaluations of relationship building whether it be in microfinance, agriculture value chains or policy reform. In each case, “trust” must be defined as a behavior change outcome that is “nudged” based on the framing (mindset) of the stakeholder. Meaning that each stakeholder, depending on their mindset and the required behavior to facilitate blockchain uptake, will require a customized nudge.
The role of trust in project selection and design: What does that mean for MEL
Defining “trust” should begin during project selection/design. Project selection and design criteria/due diligence are invaluable for MEL. Many of the dimensions of evaluability assessments refer back to the work that is done in the project selection/design phrase (which is why some argue evaluability assessments are essentially project design tools). When it comes to blockchain, the USAID Blockchain Primer provides some of the earliest thinking for how to select and design blockchain projects, hence it is a valuable resources for MEL practitioners who want to start thinking about how they will evaluate blockchain applications.
What should we be thinking about?
Relationship building and trust are behaviors, hence blockchain theories of change should have outcomes stated as behavior changes by specific stakeholders (hence the value add of tools like stakeholder analysis and outcome mapping). However, these Theories of Change (TOC) are only as good as what informs them, hence building a knowledge base of blockchain applications as well as previous lessons learned from evidence on relationship building/trust will be critical to developing a MEL Strategy for blockchain applications.
Michael Cooper is a former Associate Director at Millennium Challenge Corporation and the U.S. State Dept in Policy and Evaluation. He now heads Emergence, a firm that specializes in MEL and Blockchain services. He can be reached at firstname.lastname@example.org or through the Emergence website.
Technology solutions in development contexts can be runaway trains of optimistic thinking. Remember the play pump, a low technology solution meant to provide communities with clean water as children play? Or the Soccket, the soccer ball that was going to help kids learn to read at night? I am not disparaging these good intentions, but the need to learn the evidence from past failure is widely recognized. When it comes to the blockchain, possibly the biggest technological innovation on the social horizon, the learning captured in guidance like the Principles for Digital Development or Blockchain Ethical Design Frameworks, needs to not only be integrated into the design of blockchain applications but also into how MEL practitioners will need to assess this integration and test solutions. Data driven feedback from MEL will help inform the maturation of human centered blockchain solutions that mitigate endless/pointless pilots which exhaust the political will of good natured partners and creates barriers to sustainable impact.
The Blockchain is new but we have a head start in thinking about it
The blockchain is an innovation, and it should be evaluated as such. True the blockchain could be revolutionary in its impact. And yes this potential could grease the wheels of the runaway train thinking referenced above, but this potential does not moot the evidence we have around evaluating innovations.
Keeping the risk of the runaway train at bay includes MERL practitioners working with stakeholders to ask : is blockchain the right approach for this at all? Only after determining the competitive advantage of the blockchain solutions over other possible solutions should MEL practitioners work with stakeholders to finalize design of the initial piloting. The USAID Blockchain Primer is the best early thinking about this process and the criteria involved.
Michael Quinn Patton and others have developed an expanded toolkit for MERL practitioners to best unpack the complexity of a project and design a MERL framework that responds to the decision making requirements on the scale up pathway. Because the blockchain is an innovation, which by definition means there is less evidence on its application but great potential, it will require MEL frameworks that iteratively test and modify applications to inform the scale up pathway.
The Principles for Digital Development highlight the need for iterative learning in technology driven solutions. The overlapping regulatory, organizational and technological spheres further assist in unpacking the complexity using tools like Problem Driven Iterative Adaptation (PDIA) or other adaptive management frameworks that are well suited to testing innovations in each sphere.
How Blockchain is different: Intended Impacts and Potential Spoilers
There will be intended and unintended outcomes from blockchain applications that MEL should account for. This includes general intended outcomes of increased access to services and overall costs savings while “un-intended” outcomes include the creation of winners and losers.
The primary intended outcomes that could be expected from blockchain applications are an increase in cost savings (by cutting out intermediaries) which results in increased access to whatever service/product (assuming any cost savings are re-invested in expanding access). Or a possible increase in access that results from creating a service where none existed before (for example creating access to banking services in rural populations). Hence methods for measuring the specific type of cost savings and increased access that are already used could be applied with modification.
However, the blockchain will be disruptive and when I say “un-intended” (using quotation marks) I do so because the cost savings from blockchain applications are the result of alleviating the need for some intermediaries or middlemen. These middlemen are third parties who could be some form of rent-seeker in providing a validation, accreditation, certification or other type of service meant to communicate trust. For example, with m-Pesa, banking loan and other services from banks were expanded to new populations. With a financial inclusion blockchain project these same services could be accessed by the same population but without the need for a bank, hence incurring a cost savings. However, as is well known in many a policy reform intervention, creating efficiencies usually means creating losers and in our example the losers are those previously offering the services that the blockchain makes more efficient.
The blockchain can facilitate efficiencies, not elimination of all intermediary functions. With the introduction of any innovation, the need for new functions will emerge as old functions are mooted. For example mPesa experienced substantial barriers in its early development until they began working with kiosk owners who, after being trained up, could demonstrate and explain mPesa to customers. Hence careful iterative assessment of the ecosystem (similar to value chain mapping) to identify mooted functions (losers) and new functions (winners) is critical.
MERL practitioners have a value add in mitigating the negative effects from the creation of losers, who could become spoilers. MERL practitioners have many analytical tools/skills that can not only help in identifying the potential spoilers (perhaps through various outcome mapping and stakeholder analysis tools) but also in mitigating any negative effects (creating user personas of potential spoilers to better assess how to incentivize targeted behavior changes). Hence MEL might be uniquely placed to build a broader understanding amongst stakeholders on what the blockchain is, what it can offer and how to create a learning framework that builds trust in the solution.
Trust, the real innovation of blockchain
MERL is all about behavior change, because no matter the technology or process innovation, it requires uptake and uptake requires behavior. Trust is a behavior, you trust that when you put your money in a bank it will be available for when you want to use it. Without this behavior, stemming from a belief, there are runs on banks which in turn fail which further erodes trust in the banking system. The same could be said for paying money to a water or power utility and expecting that they will provide service, The more use, the more a relationship matures into a trustful one. But it does not take much to erode this trust even after the relationship is established, again think about how easy it is to cause a run on a bank or stop using a service provider.
The real innovation of the blockchain is that it replaces the need for trust in humans (whether it is an individual or system of organizations) with trust in math. Just as any entity needs to build a relationship of trust with its targeted patrons, so will the blockchain have to develop a relationship of trust not only with end users but with those within the ecosystem that could influence the impact of the blockchain solution to include beneficiaries and potential loser/spoilers. This brings us back to the importance of understanding who these stakeholders are, how they will interact with and influence the blockchain, and their perspectives, needs and capacities.
MERL practitioners who wish to use blockchain will need to pick up the latest thinking in behavioral sciences to understand this “trust” factor for each stakeholder and integrate it into an adaptive management framework. The next blog in this series will go into further detail about the role of “trust” when evaluating a blockchain application.
The Blockchain is different — don’t throw the baby out with the bath water
There will inevitably be mountains of pressure go to “full steam ahead” (part of me wants to add “and damn the consequences”) without sufficient data driven due diligence and ethical review, since blockchain is the next new shiny thing. MERL practitioners should not only be aware of this unfortunate certainty, but they also need to pro-actively consider their own informed strategy on how they will respond to this pressure. MERL practitioners are uniquely positioned to advocate for data driven decision making and provide the data necessary to steer clear of misapplication of blockchain solutions. There are already great resources for MEL practitioners on the ethical criteria and design implications for blockchain solutions.
The potential impact of blockchain is still unknown but if current thinking is to be believed, the impact could be paradigm shifting. Given this potential, getting the initial testing right to maximize learning will be critical to cultivating the political will, the buy-in, and the knowledge base to kick start something much bigger.
Michael Cooper is a former Associate Director at Millennium Challenge Corporation and the U.S. State Dept in Policy and Evaluation. He now heads Emergence, a firm that specializes in MEL and Blockchain services. He can be reached at email@example.com or through the Emergence website.
Technological solutions, however, need uptake in order for their effects to be truly known. This is no different for the blockchain. Technology solutions are not self-implementing — their uptake is dependent on social structures and human decision making. Hence, while on paper the blockchain offers many benefits, the realization of these benefits in the monitoring, evaluation and learning (MEL) space requires close working with MEL practitioners to hear their concerns, excitement, and feedback on how the blockchain can best produce these benefits.
The blockchain is a data management tool for achieving data integrity, transparency, and addressing privacy concerns. It is a distributed software network of peer-to-peer transactions (data), which are validated through consensus, using pre-established rules. This can remove the need for a middleman or “intermediaries”, meaning that it can “disintermediate” the holders of a traditional MEL database, where data is stored and owned by a set of actors.
Hence the blockchain solves two primary problems:
It reduces the need for “middlemen” (intermediaries) because it is peer-to-peer in nature. For MEL, the blockchain may thus reduce the need for people to be involved in data management protocols, from data collection to dissemination, resulting in cost and time efficiencies.
The blockchain maintains data integrity (meaning that the data is immutable and is only shared in the intended manner) in a distributed peer-to-peer network where the reliability and trustworthiness of the network is inherent to the rules established in the consensus algorithms of the blockchain.
So, what does this mean? Simply put, a blockchain is a type of distributed immutable ledger or decentralized database that keeps continuously updated digital records of data ownership. Rather than having a central administrator manage a single database, a distributed ledger has a network of replicated databases, synchronized via the internet, and visible to anyone within the network (more on control of the network and who has access permissions below).
Advantages over Current Use of Centralized Data Management
Distributed ledgers are much less vulnerable to loss of control over data integrity than current centralized data management systems. Loss of data integrity can happen in numerous ways, whether by hacking, manipulation or some other nefarious or accidental use. Consider the multiple cases of political manipulation of census data as recorded in Poor Numbers: How We Are Misled by African Development Statistics and What to Do about It because census instruments are designed and census data analyzed/managed in a centralized fashion with little to no transparency.
Likewise, within the field of evaluation there has been increasing attention on p-hacking, where initial statistical results are manipulated on the back side to produce results more favorable to the original hypothesis. Imagine if cleaned and anonymized data sets were put onto the blockchain where transparency, without sacrificing PII, makes p-hacking much more difficult (perhaps resulting in increased trust in data sets and their overall utility/uptake).
Centralized systems can have lost and/or compromised data (or loss of access) due to computer malfunctions or what we call “process malfunctions” where the bureaucratic control over the data builds artificially high barriers to access and subsequent use of the data by anyone outside the central sphere of control. This level of centralized control (as in the examples above regarding manipulation of census design/data and p-hacking) introduces the ability for data manipulation.
Computer malfunctions are mitigated by the blockchain because the data does not live in a central network hub but instead “lives’ in copies of the ledger that are distributed across every computer in the network. This lack of central control increases transparency. “Hashing” (a form of version control) ensures that any data manipulations in the blockchain are not included in the blockchain, meaning only a person with the necessary permissions can change the data on the chain. With the blockchain, access to information is as open, or closed, as is desired.
How can we use this technology in MEL?
All MEL data must eventually find its way to a digital version of itself, whether it is entered from paper surveys or it goes through analytical software or straight into an Excel cell, with varying forms/rigor of quality control. A benefit of blockchain is its compatibility with all digital data. It can include data files from all forms of data collection and analytical methods or software. Practitioners are free to collect data in whatever manner best suits their mandates with the blockchain becoming the data management tool at any point after collection, as the data can be uploaded to the blockchain at any point. Meaning data can be loaded directly by enumerators in the field or after additional cleaning/analysis.
MEL has specific data management challenges that the blockchain seems uniquely suited to overcome including 1. protection of Personally Identifiable Information (PII)/data integrity, 2. mitigating data management resource requirements, and 3. lowering barriers to end use through timely dissemination and increased access to reliable data.
Let’s explore each of these below:
1. Increasing Protection and Integrity of Data: There might be a knee jerk reaction against increasing transparency in evaluation data management, given the prevalence of personally identifiable information (PII) and other sensitive data. Meeting internal quality control procedures for developing and sharing draft results is usually a long arduous process — even more so if delivering cleaned data sets. Hence there might be hesitation in introducing new data management techniques given the priority given to the protection of PII balanced against the pressure to deliver data sets in a timely fashion.
However, we should learn a lesson from our counterparts in healthcare records management, one of the more PII and sensitive data laden data management fields in the world. The blockchain has seen piloting in healthcare records management precisely because it is able to secure the integrity of sensitive data in such an efficient manner.
Imagine an evaluator completes a round of household surveys, the data is entered, cleaned and anonymized and the data files are ready to be sent to whomever the receiver is (funder, public data catalog, etc.) The funder requires that the data uploaded to the blockchain is done using a Smart Contract. Essentially a Smart Contract is a set of “if……then” protocols on the Ethereum network (a specific type of blockchain) which can say “if all data has been cleaned of PII and is appropriately formatted….etc….etc…, it can be accepted onto the blockchain.” If the requirements written into the Smart Contract are not met, the data is rejected and not uploaded to the blockchain (see point 2 below). So, in the case where proper procedures or best or preferred practices are not met, the data is not shared and remains safe within the confines of a (hopefully) secure and reliable centralized database.
This example demonstrates one of the unsung values of the blockchain. When correctly done (meaning the Smart Contract is properly developed) it can ensure that only the data that is appropriate is shared and is in fact shared only with those meant to have it in a manner where the data cannot be manipulated. This is an advantage over current practice where human error can result in PII being released or unuseable or incompatible data files being shared.
The blockchain also has inherent quality control protocols around version control that mitigate against manipulation of the data for whatever reason. Hashing is partly a summary labelling of different encrypted data sets on the blockchain where any modification to the data set results in a different hash for that data set. Hence version control is automatic and easily tracked through the different hashes which are one way only (meaning that once the data is hashed it cannot be reverse engineered to change the original data). Thus, all data on the blockchain is immutable.
2. Decreasing Data Management Resources: Current data management practice is very resource intensive for MEL practitioners. Data entry, creation of data files, etc. requires ample amounts of time, mostly spent guarding against error, which introduces timeliness issues where processes take so long the data uses its utility by the time it is “ready” for decision makers. A future post in this series will cover how the blockchain can introduce efficiencies at various points in the data management process (from collection to dissemination). There are many unknowns in this space that require further thinking about the ability to embed automated cleaning and/or analytical functions into the blockchain or compatibility issues around data files and software applications (like STATA or NIVIVO). This series of posts will highlight broad areas where the blockchain can introduce the benefits of an innovation as well as finer points that still need to be “unpacked” for the benefits to materialize.
3. Distributed ledger enables timely dissemination in a flexible manner: With the increased focus on the use of evaluation data, there has been a correlated increase in discussion in how evaluation data is shared.
Current data dissemination practices include:
depositing them with a data center, data archive, or data bank
submitting them to a journal to support a publication
depositing them in an institutional repository
making them available online via a project or institutional website
making them available informally between researchers on a peer-to-peer basis
All these avenues of dissemination are very resource intensive. Each avenue has its own procedures, protocols, and other characteristics that may not be conducive to timely learning. Timelines for publishing in journals is long with incentives towards only publishing positive results, contributing to a dismal utilization rates of results. Likewise, many institutional evaluation catalogs are difficult to navigate, often incomplete, and generally not user friendly. (We will look at query capabilities on the blockchain later in the blog series).
Using the blockchain to manage and disseminate data could result in more timely and transparent sharing. Practitioners could upload data to the chain at any point after collection, and with the use of Smart Contracts, data can be widely distributed in a controlled manner. Data sets can be easily searchable and available in much timelier and user-friendly fashion to a much larger population. This creates the ability to share specific data with specific partners (funders, stakeholders, the general public) in a more automated fashion and on a timelier basis. Different Smart Contracts can be developed so that funders can see all data as soon as it is collected in the field, while a different Smart Contract with local officials allows them to see data relevant to their locality only after it is entered, cleaned, etc.).
With the help of read/write protocols, anyone can control the extent to which data is shared. Use of the data is immutable, meaning it cannot be changed (in contrast to current practice where we hope the PDF is “good enough” to guard against modification but most times data are pushed out in excel sheets, or something similar, with no way to determine what the “real” data when different versions appear).
Where are we?
We are in the early stages of understanding, developing and exploring the blockchain in general and with MEL in particular. On September 5th, we’ll be leading a day-long Pre-Conference Workshop on What Blockchain Can Do For MERL. The Pre-Conference Workshop and additions to this blog series will focus on how:
The blockchain can introduce efficiencies in MEL data management
The blockchain can facilitate “end use” whether it is accountability, developmental, formative, etc.
To work with MEL practitioners and other stakeholders to improve the uptake of the blockchain as an innovation by overcoming regulatory, organizational and cultural barriers.
This process is meant to be collaborative so we invite others to help inform us on what issues they think warrant further exploration. We look forward to collaborating with others to unpack these issues to help develop thinking that leads to appropriate uptake of blockchain solutions to MEL problems.
Where are we going?
As it becomes increasingly possible that blockchain will be a disruptive technology, it is critical that we think about how it will affect the work of MEL practitioners. To this end, stay tuned for a few more posts, including:
How can MEL inform Blockchain maturation?
Evaluating for Trust in Blockchain applications
How can we integrate blockchain into MEL Practices?
We would greatly benefit from feedback on this series to help craft topics that the series can cover. Please comment below or contact the authors with any feedback, which would be greatly appreciated.
Michael Cooper is a former Associate Director at Millennium Challenge Corporation and the U.S. State Dept in Policy and Evaluation. He now heads Emergence, a firm that specializes in MEL and Blockchain services. He can be reached at firstname.lastname@example.org or through the Emergence website.
Shailee Adinolfi is an international development professional with over 15 years of experience working at the intersection of financial services, technology, and global development. Recently, she performed business development, marketing, account management, and solution design as Vice President at BanQu, a Blockchain-based identity platform. She held a variety of leadership roles on projects related to mobile banking, financial inclusion, and the development of emerging markets. More about Shailee