## CRUSADERS

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**Canonical URL:** [CRUSADERS](https://www.imf.org/-/media/files/publications/fandd/article/2018/march/wellisz.pdf)

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### Case studies and deployments
- Ukraine — ProZorro.Sale
  - Created an electronic auction system for sales of public assets ranging from bank loans to scrap metal.
  - In its first 13 months, the system handled $210 million, “almost as much as the money raised from conventional privatization sales in the past five years,” says Max Nefyodov.
  - Ukraine population cited as 44 million.
  - Ukraine ranked 131st among 176 countries on Transparency International’s Corruption Perceptions Index 2016.
  - Transparency International Ukraine was in talks with the European Bank for Reconstruction and Development to adapt the system for use elsewhere in Europe.
- AID:Tech (Dublin-based)
  - Platform uses blockchain to ensure integrity of charitable contributions and social welfare payments; company provides technology but doesn’t handle money.
  - Irish Red Cross pilot: 500 electronic vouchers worth $20 apiece were redeemed in Lebanon with no funds lost.
  - Company raising between $3 million and $5 million from investors and plans to open offices in Singapore and Dubai.
  - Goal: have at least 100,000 people on the platform by June.
  - Contracts mentioned: remittances to Serbia, social welfare payments in Jordan, aid to homeless women in Ireland.
- Bitfury Group / Georgia
  - Contract to register land titles using blockchain technology (blockchain described as a distributed ledger that registers transactions, encrypted and stored across a network so they cannot be altered or stolen).
- Signatura and Teneris (Gonzalo Blousson)
  - Signatura: platform to sign and notarize documents among multiple people; used to make financial disclosure forms visible and immutable in Córdoba, Argentina.
  - Teneris: procurement platform to solicit bids from suppliers of goods and services.
- Supercivicos (Mexico — Diego Mendiburu)
  - Mobile app for citizens to report substandard public services using short videos; uses GPS to pinpoint date and location and builds a database for civic groups and agencies.

### Technologies and mechanisms
- Blockchain / distributed ledger technology
  - Functions as a means of exchange and a database that automatically registers transactions; records are encrypted and stored across a network of computers rather than in a central location, so they cannot be altered or stolen.
  - Uses cited: land title registration, direct transfer of donations to beneficiaries, immutable public financial disclosures, procurement platforms.
  - Benefits highlighted: immutability, reduced intermediaries, prevention of fraud (example: “no more people claiming benefits for dead parents or brothers and sisters who have emigrated”).
- Big data
  - Aggregates and analyzes government spending and contracting to identify signs of waste, fraud, and corruption; enables spotting patterns such as “whose brother-in-law got too many contracts.”
- Mobile technology, QR codes, GPS, and dashboards
  - QR-coded plastic cards used as beneficiary “bank accounts” in Lebanon pilot; scanned at supermarket checkouts.
  - Dashboards allow real-time tracking of recipient spending and insights into needs.
  - Smartphone video reporting with GPS metadata builds evidence and public pressure to address local service failures.

### Impacts, scale, and costs
- Global estimates and economic consequences
  - Bribery alone estimated to cost as much as $2 trillion a year.
  - Comparison figures: about equal to the GDP of Italy and many times the $142 billion in global development aid.
  - IMF 2016 study referenced: “Corruption: Costs and Mitigating Strategies” — corruption discourages private investment, curbs economic growth, channels public funds to wasteful projects, depletes funds for health and education, and reduces incentives for skill acquisition.
  - Susan Rose-Ackerman: “Countries that are less corrupt have higher growth rates, have higher levels of GDP, and have higher levels on the Human Development Index of the United Nations.”
- Direct program metrics
  - ProZorro.Sale handled $210 million in its first 13 months.
  - AID:Tech pilot redeemed 500 vouchers worth $20 apiece in Lebanon.
  - AID:Tech fundraising target between $3 million and $5 million; platform growth target 100,000 users by June.

### Limitations, governance, and institutional considerations
- Technological limits
  - Blockchain cannot prevent corruption that occurs after procurement awards (example: contractors using shoddy materials).
  - Technology provides tools but not complete solutions to all forms of corruption.
- Institutional requirements and political constraints
  - Digital tools require government support and robust institutions to be effective.
  - IMF and World Bank criticized Ukraine for undermining its National Anti-Corruption Bureau and for failing to create an independent anti-corruption court.
  - Quoted assessment: “E-tools are important, but institutions are far more important,” says Viktor Nestulia, director of the Innovation Projects Program at Transparency International Ukraine.

### Policy implications and recommendations
- Combine technology with institutional reform
  - Deploy blockchain, big data, and mobile reporting to increase transparency, traceability, and citizen engagement.
  - Strengthen independent anti-corruption institutions (e.g., anti-corruption bureaus, independent courts) to enforce accountability beyond what e-tools can deliver.
- Promote citizen participation and data transparency
  - Use mobile apps, GPS-stamped evidence, and public dashboards to mobilize civic oversight and pressure officials to act.
  - Make financial disclosures and procurement records publicly visible and tamper-proof via distributed ledgers.
- Leverage pilot programs and scale proven solutions
  - Expand successful pilots (for example, ProZorro.Sale and AID:Tech projects) to broader geographic and functional contexts, adapting to local institutional capacities.

*Chris Wellisz, “CRUSADERS,” Finance & Development, March 2018.*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2018/march/wellisz.pdf_