Blockchain Technology and the Theory of Economic Development

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