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Cryptodemocracy and its institutional possibilities

Author

Listed:
  • Darcy W. E. Allen

    (RMIT University)

  • Chris Berg

    (RMIT University)

  • Aaron M. Lane

    (RMIT University)

  • Jason Potts

    (RMIT University)

Abstract

Democracy is an economic problem of choice constrained by transaction costs and information costs. Society must choose between competing institutional frameworks for the conduct of voting and elections. These decisions over the structure of democracy are constrained by the technologies and institutions available. As a governance technology, blockchain reduces the costs of coordinating information and preferences between dispersed people. Blockchain could be applied to the voting and electoral process to form new institutional possibilities in a cryptodemocracy. This paper analyses the potential of a cryptodemocracy using institutional cryptoeconomics and the Institutional Possibility Frontier (IPF). The central claim is that blockchain lowers the social costs of disorder in the democratic process, mainly by incorporating information about preferences through new structures of democratic decision making. We examine one potential new form of democratic institution, quadratic voting, as an example of a new institutional possibility facilitated by blockchain technology.

Suggested Citation

  • Darcy W. E. Allen & Chris Berg & Aaron M. Lane & Jason Potts, 2020. "Cryptodemocracy and its institutional possibilities," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(3), pages 363-374, September.
    • Handle: RePEc:kap:revaec:v:33:y:2020:i:3:d:10.1007_s11138-018-0423-6
    DOI: 10.1007/s11138-018-0423-6
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    References listed on IDEAS

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    More about this item

    Keywords

    Blockchain; Cryptoeconomics; Democracy; New comparative economics; Quadratic Voting;
    All these keywords.

    JEL classification:

    • P50 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - General
    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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