Smart Contracts at the World Bank
The concept of smart contracts has been around since the 1990s. The basic idea is that contracting parties would reflect some part of their obligations in computer code. This code would be able to recognize (or be told) when conditions for action had been met, or not, and then perform the obligations (execute the contract) or impose penalties for failure to meet the conditions.
This seemed to promise significant reduction in transaction costs, notably of monitoring to see if conditions were satisfied and of execution of the obligations. (Other transaction costs of business, like finding potential deals and negotiating their . . . [more]
