The Institutional Economics of Identity

20 Pages Posted: 20 Nov 2017 Last revised: 31 May 2018

See all articles by Alastair Berg

Alastair Berg

RMIT University - School of Economics, Finance and Marketing

Chris Berg

RMIT University - School of Economics, Finance and Marketing

Sinclair Davidson

RMIT University - School of Economics, Finance and Marketing

Jason Potts

RMIT University

Date Written: May 25, 2018

Abstract

Identification forms a key part of all but the least sophisticated economic and political transactions. More complex or significant transactions demand more formal identification of the parties involved. In this paper we develop an institutional as well as a public choice theory of identity. We distinguish between a Demsetzian evolutionary view of identity and a ‘legal-centric’ view of identity. In the former view, identity is contextual, fluid and subjective. In the latter, identity is uniform and permanent. Governments have an interest in identity insofar as identity is used in the process of tax collection and welfare provision (and previously conscription). Private organisations free-ride off state-provided identification services. The paper concludes with a discussion about technological change and identity management. We characterise two possible futures: one in which blockchain and related technology enables states to create more comprehensive uniform identities, and one in which these technologies enable identities to be ‘self-sovereign’ and transferred to citizens.

Keywords: identity, blockchain, institutional economics, property rights, self-sovereign identity

JEL Classification: D02, D23, H40

Suggested Citation

Berg, Alastair and Berg, Chris and Davidson, Sinclair and Potts, Jason, The Institutional Economics of Identity (May 25, 2018). Available at SSRN: https://ssrn.com/abstract=3072823 or http://dx.doi.org/10.2139/ssrn.3072823

Alastair Berg

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

Level 12, 239 Bourke Street
Melbourne, Victoria 3000
Australia

Chris Berg (Contact Author)

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

Level 12, 239 Bourke Street
Melbourne, Victoria 3000
Australia

Sinclair Davidson

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

445 Swanston Street
Melbourne, Victoria 3000
Australia
+61-3-9925-5869 (Phone)
+61-3-9925-5986 (Fax)

Jason Potts

RMIT University ( email )

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