How Blockchain Technology Could Help Developing Countries Part 12

Situational ethics and transparency.


Situational psychology states that for a crime to occur (corruption being one of such crimes), three things need to happen. The first one is a need or a want or a perceived need. This means that, for instance, a person would only take a bribe if he or she believes that he or she needs more money. Somebody is not going to take the money if they think they don’t need it.

The second one is rationalization, which is having a story about how even though a person is committing a crime, the person is still a good person. For example, when stealing paper or office supplies, an office worker could be thinking that the company is large and a theft of a few realms of paper is not a big deal. A government official can tell himself or herself a story about how the government is a large corrupt machine and the official has a family to take care of, and that makes taking a bribe okay.

The final factor that has an impact on whether a crime is going to occur is whether the person believes that he or she will get caught. This is the reason people do not commit crimes in front of the police officers or in public places with video recording and ample light. Criminals tend to hide in the dark and it has to do with getting caught.


How a government can lower the corruption rates

The problem with three factors described above is that two out of three of them are internal. A person may have three new luxury cars in the garage, yet still think that he or she needs another car. What people think about their needs or wants is completely about them.

The second factor, rationalization, is also all about the internal dialogue and a person telling an internal story about how committing a crime is okay.

Out of three factors, only one factor is external and this factor is the ability to get away with a crime and beliefs about being able to get away.


Situational ethics

Human ethics and human behavior depend significantly on the external conditions, which is why transparency and openness are so important. Here is an example. Let’s say you to go a grocery store to buy some food. You go to a huge supermarket on a busy day and park far away from the store. You get through the line, and as you are exiting the store you realize that the cashier has given you $5 more in change than he or she should have. Would you go back to return the money? Almost every person would answer yes. Now, imagine the same situation, but at the end of a very long day, your spouse is waiting for you at home, and you have three kids with you. Would you go back now? Even if you answered yes to this question, imagine that your spouse is waiting for you, your three kids are with you, the weather is terrible and it’s raining really heavily outside and you realize that you received $5 more by the time you get to your car all the way in the back of the parking lot, and one of the grocery bags with food is tearing apart, so you are having a hard time moving groceries from the cart to the trunk of your car. Would you go back now?

Even if you have answered yes, there is a scenario, such as adding the cashier being rude to you and one of your children having a birthday on top of that, in which even the most honest person would decide that going back to return the money is not worth it and that is what situational ethics is about.


Countries, states and municipalities have police and enforcement so that people obey the law.

One of the ways to get people believing that they will get caught if they commit a crime is having transparency. Criminals do not like to act in bright daylight in front of other people because it increases the risks of getting caught.

In the digital world, one of the ways to have transparency is to have open ledgers that anyone can access similarly to how on the Bitcoin blockchain anyone can see the full history of transactions since the inception of the network in 2009.

This is exactly how blockchain technology could help the developing countries fight corruption and mismanagement of funds. Governments across the world could be using blockchains to record how specifically they are using funds. Government officials could be publishing on blockchains data and stats about their work and its results.