Blockchain and the Evolution of Institutional Technologies: Implications for Innovation Policy

24 Pages Posted: 29 Apr 2018 Last revised: 25 Sep 2019

See all articles by Darcy W E Allen

Darcy W E Allen

RMIT University

Chris Berg

RMIT University - School of Economics, Finance and Marketing

Brendan Markey‐Towler

University of Queensland - School of Economics

Mikayla Novak

RMIT University

Jason Potts

RMIT University

Date Written: September 24, 2019

Abstract

For the past century economists have proposed a suite of theories relating to industrial dynamics, technological change and innovation. There has been an implication in these models that the institutional environment is stable. However, a new class of institutional technologies — most notably blockchain technology — lower the cost of institutional entrepreneurship along these margins, propelling a process of institutional evolution. This presents a new type of innovation process, applicable to the formation and development of institutions for economic governance and coordination. This paper develops a replicator dynamic model of institutional innovation and proposes some implications of this innovation for innovation policy. Given the influence of public policies on transaction costs and associated institutional choices, it is indicated that policy settings conductive to the adoption and use of blockchain technology would elicit entrepreneurial experiments in institutional forms harnessing new coordinative possibilities in economic exchange. Conceptualisation of blockchain-related public policy an innovation policy in its own right has significant implications for the operation and understanding of open innovation systems in a globalised context.

Keywords: institutions, governance, platforms, public policy, technology, transactions costs

JEL Classification: D02, D71, H11, P16, P48, P50

Suggested Citation

Allen, Darcy and Berg, Chris and Markey‐Towler, Brendan and Novak, Mikayla and Potts, Jason, Blockchain and the Evolution of Institutional Technologies: Implications for Innovation Policy (September 24, 2019). Research Policy, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3160428 or http://dx.doi.org/10.2139/ssrn.3160428

Darcy Allen

RMIT University ( email )

440 Elizabeth Street
Melbourne, 3000
Australia

Chris Berg (Contact Author)

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

Level 12, 239 Bourke Street
Melbourne, Victoria 3000
Australia

Brendan Markey‐Towler

University of Queensland - School of Economics ( email )

Brisbane, QLD 4072
Australia

Mikayla Novak

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000
Australia

Jason Potts

RMIT University ( email )

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