Smart Contracts Throught Lens of the New Institutional Economics

Abstract

One of the most debated technologies affecting economic relations is blockchain and smart contracts, which are already used in various industries (financial, logistics, insurance, healthcare and others). This article is devoted to the analysis of smart contracts as a form of new contracting technologies by instruments of new institutional economics: the theory of incomplete contracts and the concept of self-enforcement agreements. The article formulates and explains two main hypotheses. The first hypothesis is related to the understanding of the applicability of smart contracts on a multitude of contracts, according to a well-known classification - classical, neoclassical, relational. The results of the study allow determining that classical contracts are more conformed to formalization in smart contracts. It is inferred that neoclassical contracts can also be presented in the ``smart{''} format but it is hardly applicable to relational ones. The second hypothesis is considering the smart contracts spreading as not institutionally neutral phenomenon which can lead to significant changes in the legislative framework for contractual relations as well as mechanisms to ensure compliance with legally significant contracts.