The Economics of Crypto-Democracy

11 Pages Posted: 24 May 2017

See all articles by Darcy W E Allen

Darcy W E Allen

RMIT University

Chris Berg

RMIT University - School of Economics, Finance and Marketing

Aaron Lane

RMIT University - Graduate School of Business and Law

Jason Potts

RMIT University

Date Written: May 24, 2017


Democracy is an economic problem of choice constrained by transaction costs and information costs. Society must choose between competing institutional frameworks for the conduct of voting and elections. These decisions are constrained by the technologies and institutions available. Blockchains are a governance technology that reduces the costs of consensus, coordinating information, and monitoring and enforcing contracts. Blockchain could be applied to the voting and electoral process to form a crypto-democracy. Analysed through the Institutional Possibility Frontier framework, we propose that blockchain lowers disorder and dictatorship costs of the voting and electoral process. In addition to efficiency gains, this technological progress has implications for decentralised institutions of voting. One application of crypto-democracy, quadratic voting, is discussed.

Keywords: Blockchain, Cryptoeconomics, Democracy, New comparative economics, New institutional economics, Transaction cost economics, Voting

JEL Classification: D02, D7, D72, P4, P00, K00

Suggested Citation

Allen, Darcy and Berg, Chris and Lane, Aaron and Potts, Jason, The Economics of Crypto-Democracy (May 24, 2017). Available at SSRN: or

Darcy Allen

RMIT University ( email )

440 Elizabeth Street
Melbourne, 3000

Chris Berg

RMIT University - School of Economics, Finance and Marketing ( email )

Level 12, 239 Bourke Street
Melbourne, Victoria 3000

Aaron Lane (Contact Author)

RMIT University - Graduate School of Business and Law ( email )


Jason Potts

RMIT University ( email )

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