Smart Contract as an Institutional Basis for Sustainable Development of the Region’s Economy

Abstract

The issues of sustainable development of territories are increasingly coming into the field of vision of scientists and practitioners. The institutional framework of the region's infrastructure implements the principles of sustainability and adaptability. The use of smart contracts can facilitate strengthening of the communication stability between subsystems and elements of the region's economy. The practice of using smart contracts in various spheres of activity (banking sector, insurance, transportation, delivery of goods, government services, etc.) demonstrates their ability to maintain the intended development trajectory, despite the influence of external factors. The possibilities of using smart contracts in the regional economy include holding a vote of citizens on a particular vital issue; organization of cadastral registers and standard electronic documents. Also they include carrying out initiatives to register companies and support small and medium-sized businesses; introduction of a mechanism for tracking shares and their financial support; management of communication between business entities and individuals in terms of compliance with environmental standards, including the provision of regulatory and reference documentation. We are not talking about the formalization of the entire economic system with smart contracts and the creation of a "digital region". The formulation of the research problem is associated with the use of smart contracts as a connecting link in the institutional framework of the regional economy, contributing to overcoming the state of instability of infrastructure in the digital economy. In recent years, support for the sustainable development of the territory has become an urgent agenda for the development of many institutions. The principles of sustainable development, or ESG -Environmental, Social, Governance, are formulated, implying a responsible approach to environmental issues, social and corporate cooperation. Obviously, in order to work according to ESG principles, Russian regions need institutional transformation. Digital tools (smart contracts, block chain, cloud technologies and artificial intelligence) create additional opportunities for the implementation of the ESG agenda. The sequence of actions is the following: analysis of the goals achieved in this direction on the basis of digital technology tools; development of a regional ESG policy (a concept for the development of a territory based on ESG principles) and informing the public (publication of the concept in the public domain) about the directions and priorities of its implementation. Then it is as follows creation of an institutional basis for the implementation of regional ESG-policy; defining the objectives of institutional support; formation of measures for the implementation of regional ESG-policy, including time limits and responsibility for their implementation.