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Blockchain and institutional complexity: an extended institutional approach

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  • Frolov, Daniil

Abstract

From a modern institutional economics viewpoint, blockchain is an institutional technology that minimizes transaction costs and greatly reduces intermediation. Through an analysis of blockchain, I demonstrate the possibilities of extended institutional approach – a new generation of complexity-focused methodologies and theories of institutional analysis that complement and expand the standard institutional paradigm. By using the theory of transaction value, I argue blockchain technologies not only will lead to a significant reduction in transaction costs but will also reorient intermediaries toward improving the quality of transactions and expanding the offer of additional transaction services. The theory of institutional assemblages indicates it is impossible to form a homogeneous system of blockchain-based institutions associated exclusively with the principles of decentralization, transparency, and openness. Blockchain-based institutions will be of a hybrid and conflicting nature, combining elements of opposing institutional logics – regulatory and algorithmic law, Ricardian and smart contracts, private and public systems, and uncontrollability and arbitration.

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  • Frolov, Daniil, 2021. "Blockchain and institutional complexity: an extended institutional approach," Journal of Institutional Economics, Cambridge University Press, vol. 17(1), pages 21-36, February.
    • Handle: RePEc:cup:jinsec:v:17:y:2021:i:1:p:21-36_2
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    Cited by:

    1. Yerushalmi, Erez & Paladini, Stefania, 2023. "Blockchain in Financial Intermediation and Beyond: What are the Main Barriers for Widespread Adoption?," CAFE Working Papers 22, Centre for Accountancy, Finance and Economics (CAFE), Birmingham City Business School, Birmingham City University.
    2. Haynes, Paul & Hietanen, Joel, 2023. "Marketing without trust? – Blockchain technologies in the sharing economy as assemblage and pharmakon," Journal of Business Research, Elsevier, vol. 163(C).
    3. Michael Paul Kramer & Linda Bitsch & Jon Hanf, 2021. "Blockchain and Its Impacts on Agri-Food Supply Chain Network Management," Sustainability, MDPI, vol. 13(4), pages 1-22, February.
    4. Zhu, Qingyun & Bai, Chunguang & Sarkis, Joseph, 2022. "Blockchain technology and supply chains: The paradox of the atheoretical research discourse," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    5. Frolov, Daniil, 2021. "Transplantation of economic institutions: a post-institutional theory (expanded version)," MPRA Paper 108707, University Library of Munich, Germany.

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