Commons governance for international trade: Navigating the efficiency-adaptability paradox in private permissioned blockchain platforms

This is the authors' abstract. We don't add key points for this paper.

Private permissioned blockchain platforms promise to increase the efficiency of international trade networks by offering a hybrid governance arrangement that reduces the transaction and governance costs of international trade administration. However, potential users have declined to join such platforms due to concerns about platforms' commitment to users' interests and platforms' ability to adapt to external shocks and changing business needs. Analyzing the failure of TradeLens, a Maersk/IBM private permissioned blockchain platform, we argue that the very characteristics that increase efficiency also constrain the adaptation of platforms and business models, creating an efficiency-adaptability paradox. To navigate this paradox, we propose a two-layer governance configuration which utilizes private permissioned blockchain to increase transaction efficiency and relational shared governance to guide infrequent, consequential platform adaptation. We then apply principles of commons governance to specify mechanisms for relational shared governance on a global scale. We contribute to theorizing digital platforms the insight that private permissioned blockchain platforms suffer from an efficiency-adaptability paradox and offer a governance configuration for navigating the paradox. We contribute to relational and commons governance theory mechanisms that expand shared governance to a global scale. We connect the governance challenges of private permissioned blockchains to hybrid governance theory by outlining a governance configuration that balances the interests of users and sponsors in voluntary global networks and ecosystems in which market and hierarchy are infeasible. Practically, we describe the governance configuration and mechanisms concretely enough to be implemented by sponsors of global private permissioned blockchain platforms.