Legislation generally requires public agencies to account for their activity to the public. Among the many duties imposed by legislatures around the world are requirements for transparency in procurement of services, budgeting and presentation of accounts. However, agencies in countries with high corruption problems have trouble complying with the legislation, especially in smaller agencies. Moreover, it is typically infeasible for national auditors to audit all the accounts rendered, and instead, they select a small sample for audit based on their level of risk. Another problem is that the presentation of accounts occurs once a year for all agencies, leading to a seasonal demand with significant lag time between auditing and accounting period. In this study, we present a non-technical framework based on the emerging technology of blockchain that could be a solution to all these concerns. We apply it within the context of Brazilian legislation and the Federal Court of Accounts of Brazil (TCU), although the proposal is applicable across a wide range of countries facing severe corruption.

An exemplary paradigm of how an AI can be a disruptive technological paragon via the utilization of blockchain comes straight from the world of deep learning. Data scientists have long struggled to maintain the quality of a dataset for machine learning by an AI entity. Datasets can be very expensive to purchase, as, depending on both the proper selection of the elements and the homogeneity of the data contained within, constructing and maintaining the integrity of a dataset is difficult. Blockchain as a highly secure storage medium presents a technological quantum leap in maintaining data integrity. Furthermore, blockchain’s immutability constructs a fruitful environment for creating high quality, permanent and growing datasets for deep learning. The combination of AI and blockchain could impact fields like Internet of things (IoT), identity, financial markets, civil governance, smart cities, small communities, supply chains, personalized medicine and other fields, and thereby deliver benefits to many people.

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This chapter sets out some critical reflections on the creation of the ‘Ricardian Contract’, the most direct antecedent for the ‘smart legal contract’, and more recent developments in blockchain-based ‘smart contracts’. In the halcyon days of 1995, Ian Grigg looked for a way to capture the nature of financial agreements in order to create an instrument that could be traded on the Internet. By way of the zero coupon bond, he discovered that the legal prose contract is close to the semantic essence of all financial instruments; the way to issue any instrument reduces to the way to capture any contract, digitally and cryptographically. The Ricardian Contract emerged as the design pattern for that capture: a human-readable, contractually significant document, digitally signed and including sufficient but simple markup tokens such that a computer program could extract out the handful of important values including face, rates, issuer, etc. The document could then be hashed cryptographically, providing a secure, unique, and cost-free identifier. With Bitcoin’s drive to decentralize all of finance, the design pattern is now emerging as the way to efficiently tie a legal intent into a financial agreement.