Blockchain Technology and International Relations: Decentralised Solutions To Foster Cooperation In An Anarchic World?

Bernhard Reinsberg and Centre for Business Research

Working Papers from Centre for Business Research, University of Cambridge

Abstract: Blockchain technology enables 'trustless' interactions among individuals by replacing centralised enforcement with distributed consensus. It therefore has been used for commercial applications, including transfer of cryptocurrency, digital file storage, digital identity services, and supply-chain management. This article probes the potential of blockchain technology to foster international cooperation among states - given the lack of a world government to enforce their mutual commitments. The article outlines four facilitators of blockchain-based global governance systems, including the need for credible commitment, the availability of resourceful non-state actors, verification needs that can be addressed through ‘oracles’, and routine interactions. These facilitators are further illustrated for the case of climate governance. Overall, the discussion suggests that blockchains - if appropriately designed to address the underlying cooperation problems - hold significant promise. Their key strength is to enable states to design ‘smart contracts’ that execute automatically when agreed conditions are fulfilled. To some extent, blockchain technology thus challenges the primacy of international organisations. However, even with blockchain technology, international organisations continue to play a role with regard to pre-agreement policy deliberation, validating real-world events, and providing technical assistance for policy implementation.

Keywords: International Relations; trust; anarchy; cooperation; international organizations; Blockchain; Ethereum; smart contracts; decentralized governance (search for similar items in EconPapers)
JEL-codes: F30 O19 O30 (search for similar items in EconPapers)
Date: 2018-09
New Economics Papers: this item is included in nep-pay
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