Governance and Smart Contract for Election Campaign Vouchers - Uwe Serdült

Transcript

[Applause] yes hello everybody uh would like to talk about democracy and elections so I'm not a technical person uh but I started with this project idea five years ago it was maybe a bit premature and I would like to relaunch it this year also here at ethereum Zurich um I would like to first uh Define the problem a bit and then move on and sketch out a potential uh solution with blockchain technology that's why I would

like to present it here today so elections yeah elections take place worldwide uh they we have many elections on National level state level local level all around the glob and there's a certain uneasiness with elections uh there's a certain uneasiness with democracy in general and uh the yeah one there are several problematic uh parts of course with elections and democracy but one is about campaign financing right so we always have these scandals about campaign

finances and this is the problem I would like to address here so campaign finances were are mainly regulated by national law or election laws so we have uh campaign spending rules we have transparency rules and even Switzerland very late though has now introduced transparency rules for uh election campaign financing um usually you have to the regulations have like an upper spending limit or you have to everyone involved all the stakeholders political parties

candidates and uh campaign groups have to declare the money they received uh in some some public way uh this puts a lot of burden on the Regulators so they have to verify whether the the the the all these actors involved in elections comply with these rules so it's quite heavy on the control side of campaign financing and I actually I I verified this uh myself how this is being done so uh I'm originally Political Science Now

increasingly work as an information scientist but uh in my uh political science uh years I actually went to the state of Geneva and uh everyone who lives there me at the time living there is allowed to check what political parties uh declared as their campaign uh spending right so I went there I looked at the documents and it's uh when you look at the compliance with these rules it's laughable of what you find and see so typically what happens is that political parties declare the use of funding late and is very incomplete and you also have

some a very Creative Accounting going on like the uh like all funding that is declared for a political party is mainly declared by the the finance head of the political party so which clearly is not uh very yeah legitimate uh it certainly happened that the finance person of the political party received money and then declared it in state of someone else and this is not only the problem in Geneva uh political scientists have studied this problem at

length and uh world worldwide so pip noris a very uh well-known political scientist studied exactly that on a International scale so for uh a lot of countries 45 countries they studied campaign financing rules and compliance with these rules the real result is shocking actually and uh the main conclusion was that violation of these rules is the norm right so here we have one major problem with elections which are a very important part of democracies

so if violation of the rules is the norm we really have a problem and I think this also backfires is also part of the frustration people have with elections and democracies and increasingly in the last couple of years we also move into an era where people with a lot of money have a lot of influence over election results because they are the ones that can Finance donate uh to the politicians or political parties they like most uh we we of course we know this from uh the US which is mainly a very prominent case and we see how much money is being spent

uh but we can also look at Switzerland here you might know we have these uh uh frequent referendum votes like it's a bit crazy three four times a year we have these referendum votes and this takes money as well right so it's not elections it's these referendum votes you can see the pro and the con side they also spent considerable amounts of money so if you so if the solution to this problem is regulating more controlling more uh I fear it's not going to do a very good job so some smart people in the uh us maybe mainly legal Scholars and economists

came up with the idea to use vouchers to finance election campaigns right so you can quickly read here about Lawrence des's idea and you might think that this is a bit science fictions using vouchers for uh to finance election campaigns however there is one city currently in the US it's Seattle uh that already is already using such vouchers it was a bit difficult at the beginning because they used to send them out in the mail paper version it got mixed up with the with the discounts for pizza and supermarket and people didn't really

find it uh lost it didn't really use it uh and it was only um donation based so what's the main idea about using these vouchers so for me is a way to readed democratize elections so we give back campaign financing to the people it's a distributed a decentralized approach to finance elections so the idea is to give everyone vouchers to individuals uh originally Seattle this was done uh with donations but now it comes out of the City budget uh of course this is one of the big uh looming questions where does the money come from

uh so it's done currently practiced in one city in the US but uh as with frequently with Democratic Innovation we see this uh for other Democratic Innovation features such as um uh participatory budgeting for example started in one city in Brazil and now it's being done across the globe and is promoted by uh Global organizations so this idea could take Route and travel worldwide because we have elections worldwide and if people are fed enough with elections and election campaign financing we might see

more Seattles uh coming down the road so it seems obvious that Wicked vouchers could be coins we could take this it's decentralized approach we could take this to the the blockchain so here is a possible use case scenario to take campaign vouchers to the blockchain we need someone to emit the coins right somebody needs so though this could be I think a legitimate actor to do this in on a nation level would eventually be central banks it's all kinds of legal questions uh this by the way this I think this

will not happen overnight but uh uh I'm I'm willing to uh develop this further and I'm also here today to find people who would maybe join the cause so in the US they call it democracy vouchers H could be any other name and you distribute this to everybody who has the right to uh take part in an election and uh in my use case scenario you could then uh do several things with your coins you could either donate them directly to political parties or candidates or if you're not so familiar

with politics or even if you hate politics it's a a dirty game I don't want to have anything to do with it but my neighbor or my uncle or my friend knows much better you could pass them on to a third uh person and then they donate it to a political party or a candidate the boldest uh part would even to allow this to go into a market where you could trade those coins and if you need more uh you could buy more also as a political party if you haven't received enough uh you could buy more in a market but that's it's all of these parameters here and elements are just

it's just a big debate starting uh now and you would of course need to force all other uh stakeholders that produce services in a campaign you need to force them and regulate it in a way that they need they cannot sell ads for example for money they would need to use the coins and then they would get it back so this is a bit the use case uh scenario of course there's as I mentioned there's legal question questions there's technical questions for example I would like to see this coin to be anonymous for the first donation um I would like to protect uh the single citizen who receives a coin

and then the first uh transaction would be anonymous technically possible and it would in a way protect the people so that like with vote secrecy you you you gave your coin to uh liberal party or a leftwing party so this is not be this cannot be seen in The Ledger it would only go public later on from the second donation onward so you have bit protection for the uh individual some kind of secrecy there uh so there's technical questions involved and that's why I'm reaching out to you guys here there's legal questions but there's also behavioral question so how would people actually use such a

coin um how would they use it would they just give it to their would they just give everything the 100 or 50 bucks to their preferred candidate or party or do they somehow is there some inherent uh sense of uh justice that or fairness that okay I cannot give 100 to uh the same party I should give something to the smaller guys as well do people act like that would they act like that is not known but luckily just in uh couple of months ago I was able to at least run a survey and ask people so we do these post elction or post referendum surveys

in our Center as well had a very nice representative big sample and I asked people this question how would you use the coin there's more detail in the data but here I'm just giving you the the overview and uh we can see that most people the biggest share of people would which is not uncommon in Switzerland because they have a multi-party system so I would have to dig a bit deeper into the data but we can see that it's by far not the case that people just give everything to the same party um and also this was a bit of a surprise only a small fraction would try to sell it or and use the money uh to to to buy ice

cream or whatever so uh this was a bit of a surprise of course this needs more studying and uh uh is at the beginning uh but I just wanted to relaunch the idea here and discuss it with you in the remaining five minutes of my talk thank you very much for listening thank you okay we have hey costan hi thank you um I have a question um a little bit of a background I'm from Sicily um which is in the very south of Italy where there is a lot of Mafia and elections are far from Fair okay so how would the system

actually prevent corruption because if I try to sell my voucher to the market um the first thing that came to my mind that maybe some of the other Italians in the room can confirm is buying literally buying votes yeah it's not it's to have it's not necessarily we don't need to have this Market no it's uh not really necessary it's maybe you cannot do this in all context and it's very heavily context dependent so I think there's not an a solution for all electoral systems and that's why for for such kind of ideas

the political scientists and the technical people need to work closely together to define the coin or the smart contract in the coin to avoid such corruption Behavior right so but I think at least it's it's on it's in The Ledger it's uh uh at some point public you you see what's going on you see how the money flows and this transparency is completely new right so with real money you don't see where it goes but with a coin you would see how it flows and where it goes at least because the second thing that will come to my mind is that then let's assume um this big Mafia

girl like um instead of just like you know going to people and pointing a gun at them for giving money I just run for politics and I tell them well you need to pay me in this way so that everything is more legit rather than having to go through money laundering but it's it's a limited of what you can do with a voucher right so uh those uh people here the ones that produce Services also have to be regulated and you can Define in the coin itself who is allowed to receive these coins right of course you could still have somebody could pay a premium right

like let's say there's some kind of black market and you would pay pay more but again at least it would go you would see that there's a huge clust there's a person accumulating all the coins so and it's transparent you could address these people at least so it it comes to the public I will follow up later for that more people ask question yes hi um I'm actually also a political scientist or political Economist so um it it talks a lot to to where I'm kind of coming from um and I think like one um one thing is I think if we like so heavily would regulate the campaign

products and services then I think kind of we don't actually need kind of the unre regulated kind of blockchain trust based technology in the in the first place so I think to some extent if like the general idea of the voucher I I think is great but I think we need to find a system where you we don't actually need that heavy regulation at the end um because otherwise like there's not the upside is not there and with that I also think that um if we would just have a voting mechanism for Distributing funds to political parties we actually don't need a token for that a separate token we just Implement an a fair voting mechanism for party

financing and then we see what parties do with that and we actually don't need to regulate what what parties do with the money there are some transparency um stuff for sure but I think just like this V mechanism putting that transparently on chain and then having um like liquid democracy aspects like you introduced and stuff like that is definitely interesting and I think there's like a design field that is interesting to explore I'm not convinced about like the market aspect partly because of the reasons that constan said and then on the end the the heavy regulation part um diminishes the the positive aspects here I think very quickly because of time I guess so okay you don't like the

regulation part no uh people in general don't like that at least the the the companies that are being regulated don't like that however whenever in democracies it's about something crucial and important we do regulate we do regulate a lot if democracy is very important to us we might regulate also uh the the ones that make commercial gains in in a in a campaign in electoral campaign so it's up to the will of the people whether they would want to regulate or not uh I would not the other point of the argument your argument uh I would not

underestimate the kind of the symbolic nature of this you are re-engaged in democracy you get a stake in an electoral campaign you get coins that you can uh use right so this is this is a huge symbolic power and I think it's ALS so helping to we have very low turnout rates in the mo in elections these days right it's going down worldwide and I think an indirect nice effect of this could be that you are re-engaged you have a a state a real stake you have these coins this could drive up a turnout that's just the hope of mine

yes hi uh political scientist in the room I think it's a bunch of us um I I like the idea of uh in general I think it's very interesting to look at the very concrete real world let's say use case um and uh and I know your Center quite a bit so um what I think it's a great conceptual um exercise to do I think at this point you know um in the crypto in the blockchain sector there's a lock of a lot going on with tokenizing and Dows Etc and that's a great place to look into already these um prototypes let's say and look what is happening there before you go and try to implement it into the you know like um

world in which crypto is probably just seen as something very negative particularly in the last week There's been quite a move on that um but see what would happen if you would propose party and candidates and everything within those structures and see what happens there before you put it in a sector or in a the real world in which there are already these regulations which basically all of the system that is being trying to be built is go beyond uh National states that are defined in a certain in a certain place we we're doing well short answer we're doing that we have a three-year Dow project and democracy now okay I think we have uh it's last may be the last one

y so in the United States the citizens united Supreme Court case classified political donations under the category of political speech and therefore um free speech um so this seems to go directly against that idea whether you agree or disagree with that opinion um have you thought of a voucher model which actually works with the citizens united framework no I think it might be possible using like quadratic voting um we could discuss afterwards but it'd be interesting to look at a hybrid model okay thank you for the

input okay thank you very much U big Applause [Applause] [Music]