Blockchain Technology and the Theory of Economic Development

25 Pages Posted: 4 Mar 2019 Last revised: 4 Feb 2020

Date Written: February 13, 2019


Since the mid-twentieth century, development economists have identified barriers to economic growth including financing a savings-investment gap, planning investments, and institutional change. Efforts to overcome these development barriers range from centralised planned intervention to decentralised entrepreneurial search. In this paper we use comparative institutional economics to analyse the expected impact of adoption of blockchain technologies on economic development. We propose that blockchains facilitate a more decentralised entrepreneurial process of economic development through institutional layering. This dynamic leads to a more market-based, polycentric and institutionally experimental economic development process. In this way blockchains shift the entrepreneurial process by which development problems are defined and ameliorated through time.

Keywords: Cryptoeconomics, New Development Economics, Institutional Economics, Institutional Entrepreneurship

Suggested Citation

Allen, Darcy and Berg, Chris and Potts, Jason, Blockchain Technology and the Theory of Economic Development (February 13, 2019). Available at SSRN: or

Darcy Allen (Contact Author)

RMIT University ( email )

440 Elizabeth Street
Melbourne, 3000

Chris Berg

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000

Jason Potts

RMIT University ( email )

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