Fully automated administrative procedures, blockchain technology and smart contracts

Digital change is revealing many new technological approaches. For example, a code-based ecosystem could arise with the assistance of blockchain technology in combination with smart contracts in which actors could in principle also conduct legal and other transactions in a highly automated fashion. To the extent normative requirements can be digitally mapped, registers, fully automated procedures and the statements of citizens could contribute to an efficient procedural conclusion. Forms of distributed data storage and smart contracts could also produce advantages for the cooperation of various government and administrative levels – creating trust at the technical level and transparency on the data use.

However, the interest in rationalisation that public administration associates with more intensive use of technology is at odds with the rights of citizens. For example, in the case of fully automated administrative acts, there is a risk of the underlying algorithm not taking all significant considerations into account and in the end taking unlawful administrative decisions. In addition, there is a risk of a loss of acceptance of the administration if administrative officials, who previously functioned as the human face of the administration and consequently contributed to the personalisation of the administrative apparatus, disappear – especially if one intuitively associates a loss of transparency with the use of software agents. However, decreasing legitimation of official procedures and decisions would greatly reduce the (efficiency) advantages of digitalisation.

Moreover, in view of the digital transformation of administration, the general question arises of how fully automated systems are to be classified in liability law terms (and whether current government liability law continues to be up-to-date with respect to these new developments). Whether self-teaching systems fit into the previous doctrine needs to be clarified in order (if necessary) then to develop alternative regulatory concepts.

The efficiency of technical systems has to be evaluated against the yardstick of the law in order to relieve the tensions of administrative automation. Unexploited potential needs to be identified, and the limits of “algorithmic administration” must be specified.

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Prof. Dr. Mario Martini

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 Alexander Feldhaus

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 Jan Zerche

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 Roland Klein

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