Blockchain and the Evolution of Institutional Technologies: Implications for Innovation Policy
24 Pages Posted: 29 Apr 2018 Last revised: 25 Sep 2019
Date Written: September 24, 2019
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: Suggested Citation