Other watchers would watch those watchers. Government officials would not be exempt from data collection. People would eventually learn that you can't bribe or blackmail because it's impossible to do without having it recorded and detected by surveillance. That's how our system of government works today, but the only people who get caught are those that leave evidence behind. If you use technology to ensure everyone creates tons of evidence, then everyone doing something illegal can be caught.

I'm not sure why I'm being so heavily downvoted, the only difference between the dystopian future that I describe and the system we have currently, is that the government isn't collecting and processing data on such a wide scale. If they collect more data, we will have more crimes solved and more privacy forfeited. If you take that to its logical extreme, we have full surveillance, no privacy, and no crime. I'd rather live in a world where we have some crime, but privacy and no surveillance, but I think it's far more likely we'll head in the opposite direction.