So, USAID is eyeing blockchain for procurement. Not for getting help to starving children, mind you, but for monitoring purchase orders. Sounds…efficient? Or does it just read like another tech-bro fantasy getting stuffed down the gullet of a federal agency that’s already choked on plenty of red tape?

Tech Fixes for Systemic Rot?

Let's be blunt: throwing blockchain at USAID's procurement issues is like putting a fresh coat of paint on a condemned building. The issue here isn’t their tracking mechanisms—that’s the red herring thrown by their defenders—the real issue is where this money goes, who receives it and why. Are we really supposed to fall for the notion that a technology, called a distributed ledger, is going to drain the swamp?

Keep in mind we’re discussing the national agency that under every administration for 50 years has been accused of everything from being wasteful to counterproductive to... I dunno, satanic. That $240 billion in improper government payments you may recall from last year around this time. Just slapping a blockchain on top of that mess won’t suddenly make everyone honest. It simply produces a more onerous and likely costlier method of tracking bad actors.

Think about it: The problem isn't the ledger. It's the people manipulating the ledger. After all, no matter how fool-proof or tamper-proof the system, a system can still be compromised. If the folks plugging that data into the system are corrupt, that data will be corrupted too. Garbage in, immutable garbage out.

Blockchain's Libertarian Paradox

Blockchain, in its purest form, is supposed to be decentralized, trustless, and empowering. It’s about removing the middleman and empowering people. When the government adopts blockchain? That inherent libertarian ethos gets twisted.

Suddenly, they control the ledger. They set the rules. They decide who gets access. This has nothing to do with decentralization and everything to do with centralized control under the guise of technological advancement. It’s the digital panopticon except this time it’s fueled by cryptography.

And let's not forget the cost. Turning a whole state’s or federal agency’s operations onto a blockchain? Training staff? Onboarding vendors? Maintaining the damn thing? That's taxpayer money being funneled into a project that might, might, improve efficiency, but will definitely enrich consultants and tech companies. You know those “Building Blocks” savings — the savings of $3.5 million? That might sound wonderful until you add up all the millions you would have to spend just installing and maintaining that system. Prove to me the return on investment outside the press release.

  • Vendor Coordination Nightmare: Getting everyone on board, especially local partners and foreign governments, is a bureaucratic quagmire waiting to happen.
  • Public Resistance: Try explaining the benefits of blockchain to the average taxpayer when their roads are crumbling and their schools are underfunded. Good luck with that.

Echoes of Past Tech Utopias

This isn’t the first time that a government agency has been lured by the siren song of technological utopianism. Anyone who has experienced digital transformation, recall the early promises of paperless offices, all digital processes and instant communication. How many of those promises actually materialized? How many simply led to costlier, more complex solutions that in the end still didn’t pan out.

Or remember the Denmark aid distribution allocation project that flopped in 2017. The problem wasn't a lack of technology. The stagnant financial ecosystem proved to be another fundamental road-block. Vague implementing regulations and pushback from the very industry it sought to support made things more confusing still. Even if the tech was ready, the world wasn’t. And that’s the fundamental problem here.

USAID, like many other government agencies, is riddled with learned, systemic overthinking. In this opaque, unaccountable system inefficiency and corruption run rampant. Most unfortunate of all, it is purposefully designed to reward the politically connected while crushing the innovative. Blockchain won't fix that. Only genuine reform will.

Does that mean we should reject the IHA’s blockchain initiative without consideration? Not necessarily. So, let’s do this with a little bit of skepticism. We have to re-establish a commitment to watch for government overreach and to keep in mind that technology is a tool, not a magic wand. As excited as we are about this pilot project, its success will depend on more than well-written lines of code. That takes nothing less than a redirection of USAID’s core business practices and a willingness to go against the tide.

The real test then is not if USAID can put blockchain to use, but if it can put USAID to real change. And that’s a challenge that not even the flashiest technology can address. Otherwise, it could prove to just be another expensive boondoggle. While well-meaning, this is perhaps an exercise in futility—to fix something that’s fundamentally broken at its very core.