Blockchain as an Institutional Innovation: Transparency and Trust in Business
- International Academy
- Dec 1, 2025
- 9 min read
Author: Mhmd Diab
Affiliation: Independent Researcher
Abstract
Blockchain is commonly portrayed as a revolutionary digital technology that automates trust and renders processes transparent. Yet the dominant narrative often reduces blockchain to its technical features and neglects its institutional significance. This article reframes blockchain as a multidimensional institutional innovation that restructures how transparency, trust, and authority are produced and contested within business environments. Drawing on Bourdieu’s theory of fields and capital, world-systems analysis, and institutional isomorphism, the article offers a theoretically grounded interpretation of blockchain’s diffusion across industries. By integrating a structured literature review with illustrative business examples, the paper analyzes how blockchain functions as: (1) programmable transparency embedded in code, (2) redistributed algorithmic trust that shifts authority from organizations to protocols, (3) an isomorphic institutional script that diffuses for legitimacy as much as efficiency, and (4) a new layer of global digital infrastructure that can either challenge or reinforce core-periphery inequalities.
The findings indicate that blockchain does not naturally democratize transparency or create trust; rather, these outcomes depend on governance choices, power relations, regulatory environments, and the distribution of technological, economic, and symbolic capital among actors. The conclusion emphasizes that blockchain should be approached not merely as a technological fix but as a contested institutional field requiring inclusive governance, socio-technical literacy, and deliberate policy intervention to avoid consolidating new digital monopolies or exacerbating global unevenness. The article contributes to management, technology, and tourism scholarship by offering a rigorous institutional reading of blockchain that is suitable for Scopus-level academic debate and practice-oriented policymaking.
1. Introduction
Blockchain has become one of the most influential technological developments of the 21st century. Initially emerging as the infrastructure behind Bitcoin, it has since expanded into fields as diverse as finance, supply chain management, international trade, logistics, tourism, education, creative industries, healthcare, and public administration. Governments experiment with blockchain-based identity systems, banks explore tokenized assets, tourism operators adopt blockchain for guest verification, and supply chains integrate immutable ledgers to track goods from origin to consumption.
However, blockchain is not only a technological innovation—it is a social, institutional, and economic innovation. It transforms how organizations verify information, how they coordinate with partners, and how they manage risk, compliance, accountability, and legitimacy. Most importantly, blockchain reshapes the organizational foundations of transparency and trust, historically produced through bureaucratic procedures, audits, regulations, and reputational systems.
While many studies focus on the functional advantages of blockchain—traceability, cryptographic security, automation—fewer examine its institutional effects:
Who controls the rules embedded in the protocol?
How does blockchain shift power among firms, governments, and consumers?
Does blockchain reduce global inequality or extend it?
Why do firms adopt blockchain even when the benefits are uncertain?
To answer these questions, blockchain must be viewed not just as an IT system but as a new institutional logic, embedded in governance structures, field struggles, regulatory processes, and global political economy.
To guide this analysis, the article integrates three theoretical frameworks:
Bourdieu’s theory of field, habitus, and capital, to understand how blockchain reconfigures power.
World-systems theory, to examine global inequalities and core-periphery dynamics.
Institutional isomorphism, to explain blockchain diffusion as a legitimacy-seeking process.
The article uses a conceptual qualitative method—structured literature review plus interpretive analysis—and offers findings relevant to managers, policymakers, scholars, and technology leaders across sectors.
2. Background and Theoretical Framework
2.1 Blockchain in Business: Beyond Technology
Blockchain is a distributed ledger enabling multiple parties to maintain a synchronized record of transactions without relying on a single central authority. Its key features include:
Decentralization (no single owner of the ledger)
Immutability (records cannot be easily altered)
Traceability (transaction histories are visible)
Smart contracts (automated rules embedded in code)
These features have been applied across industries:
Management: automated audits, contract enforcement, transparent financial flows
Tourism: immutable guest reviews, loyalty programs, identity management
Supply Chain: tracking of food, pharmaceuticals, and high-value goods
Finance: tokenization, decentralized finance (DeFi), cross-border settlements
While these benefits are real, they overlook a crucial dimension: blockchain changes the institutional architecture of economic life. Transparency and trust have historically depended on organizations, regulators, brokers, auditors, and legal systems. Blockchain relocates parts of that institutional work into protocols and networks.
To understand this institutional transformation, deeper theory is needed.
2.2 Bourdieu: Blockchain as a Field of Struggles and Capital
Bourdieu conceptualizes society as a set of fields—relational spaces where actors struggle over resources and legitimacy. Each field (e.g., finance, tech, tourism) has its own rules, and actors hold different volumes of capital:
economic capital (money, investments, tokens)
cultural capital (blockchain expertise, cryptography skills)
social capital (developer networks, consortium memberships)
symbolic capital (reputation for innovation and transparency)
Blockchain generates a new, hybrid field combining finance, technology, and regulation. In this field:
Core developers possess cultural capital that grants them authority to define “the rules of the blockchain.”
Corporations and investors hold economic capital to influence protocol development.
Early adopters and innovators accumulate symbolic capital through media narratives.
Governments and regulators possess regulatory capital, shaping what becomes legally valid.
Thus, blockchain is not merely a technical phenomenon—it is a political battle over capital and legitimacy. Transparency becomes a symbolic asset; decentralization becomes a claim to authority.
2.3 World-Systems Theory: Blockchain in the Global Political Economy
World-systems theory classifies countries into core, semi-periphery, and periphery. Core nations dominate high-value technological, financial, and regulatory activities, while peripheral nations often provide resources, labor, or markets.
Blockchain interacts with this hierarchy in two contradictory ways:
A. Empowering the Periphery
Blockchain can circumvent weak domestic institutions (e.g., corrupt land registries).
Small tourism operators can bypass large booking platforms.
Developing nations can use blockchain for identity, financial inclusion, and remittances.
B. Reinforcing Core Dominance
Core nations control key blockchain infrastructures, cloud hosting, and most venture capital.
Major blockchain protocols are governed by teams in wealthy countries.
Mining or staking systems create new dependencies (cheap energy regions vs capital-rich validator regions).
Thus, blockchain’s global impact is ambivalent: it can democratize, but it can also reproduce digital colonialism if governance remains centralized in core economies.
2.4 Institutional Isomorphism: Why Firms Adopt Blockchain
DiMaggio and Powell’s theory explains why organizations adopt similar practices:
Coercive isomorphism
Regulators, partners, or dominant firms require blockchain-based reporting or traceability.
Mimetic isomorphism
Under uncertainty, firms copy high-status early adopters to appear modern and legitimate.
Normative isomorphism
Consultants, auditors, and professional bodies promote blockchain frameworks, making adoption a professional norm.
Thus, blockchain spreads not just because it works, but because it signals compliance, innovation, and transparency.
3. Methodology
This study uses a qualitative conceptual method, appropriate for institutional and theoretical analysis.
3.1 Structured Literature Review
Sources include peer-reviewed journals and academic books covering blockchain, transparency, trust, governance, and institutional theory. The review prioritizes:
Works published within the last five years
Multidisciplinary insights (management, information systems, political economy)
Empirical case studies (supply chain, tourism, finance)
Key authors include Saberi, Schär, Casino, Narayanan, Tapscott, and others.
3.2 Analytical Strategy
A three-step interpretive process was used:
Extraction of blockchain–transparency–trust themes
Mapping these themes onto Bourdieu, world-systems, and isomorphism theories
Developing a synthesized model of blockchain as institutional innovation
The method aims not to test hypotheses but to generate conceptual insights.
4. Analysis
4.1 Blockchain as Programmable Transparency
Traditional transparency relies on:
periodic reports
audits
inspections
legal disclosure requirements
These mechanisms depend on people, institutions, and bureaucratic routines.
Blockchain replaces—or supplements—these with continuous, coded transparency, where:
every transaction is logged
records are time-stamped
data is tamper-resistant
access can be fine-tuned
smart contracts automate compliance
4.1.1 Transparency Becomes a Design Choice
Blockchain does not automatically ensure radical openness. Transparency depends on:
how the ledger is configured
who can access it
what data is encrypted or anonymized
which entities can write to the chain
which consensus rules apply
For example:
A global corporation may adopt a permissioned blockchain, giving transparency only to selected partners.
A government may adopt blockchain for land records but restrict public access.
A tourism provider may show hotel reviews but hide transaction-level details.
4.1.2 Power and Transparency: A Bourdieusian Interpretation
According to Bourdieu, actors with greater capital shape field rules. In blockchain:
Tech giants shape consortium architectures.
Developers determine technical governance.
Regulators determine legal recognition.
Large corporations enforce supplier onboarding rules.
Thus, transparency becomes a product of capital struggles, not a neutral outcome.
4.2 Blockchain as Algorithmic Trust
Blockchain’s slogan of “trustlessness” is misleading. Trust is not eliminated—it is relocated:
Trust shifts from organizations ➝ to protocols
Traditional trust relies on:
banks
regulators
auditors
courts
corporate reputations
Blockchain distributes trust across:
cryptographic algorithms
consensus mechanisms
decentralized nodes
automated smart contracts
open-source verification
4.2.1 System Trust and Social Trust
Hawlitschek et al. explain that blockchain creates system trust—confidence in the technical system rather than in individuals or authorities.
But system trust depends on social trust, because:
users trust developers to write secure code
they trust validators not to collude
they trust regulators to clarify legal status
they trust that governance will remain fair
Blockchain is thus a hybrid trust model—part algorithmic, part institutional.
4.2.2 Inequalities in Algorithmic Trust
Proof-of-work and proof-of-stake mechanisms distribute power unevenly:
Proof-of-work favors regions with cheap electricity
Proof-of-stake favors token-rich actors (economic capital)
Governance often favors protocol insiders (symbolic and cultural capital)
Thus, blockchain can concentrate power even while claiming to decentralize it.
4.3 Institutional Isomorphism: Why Blockchain Spreads
Organizations adopt blockchain because:
A. Coercive pressures
Regulators demand traceability
Large partners impose blockchain-based compliance
Industry consortia create shared standards
Example: food safety regulations drive blockchain adoption in global supply chains.
B. Mimetic pressures
When uncertain, firms imitate early adopters—especially famous or prestigious ones—seeking legitimacy.
Example: Tourism companies adopt blockchain loyalty programs because competitors have done so.
C. Normative pressures
Auditors, consultants, and IT professionals promote blockchain as a mark of modern governance.
4.3.1 Symbolic Adoption
Sometimes blockchain is adopted mainly for symbolic value:
to impress investors
to appear innovative
to satisfy corporate governance rhetoric
to improve brand trustworthiness
This creates “decoupling”, where blockchain exists on paper but not in core processes.
4.4 Blockchain and World-Systems: Global Inequality Revisited
Blockchain interacts with global hierarchies in multiple ways.
4.4.1 Opportunities for the Periphery
land governance in corrupt contexts
identity systems for unbanked populations
public records for transparency
decentralized tourism marketplaces
agricultural traceability for small farmers
These enhance institutional capacity where traditional systems are weak.
4.4.2 Risks of Reinforcing the Core
most blockchain R&D occurs in core economies
cloud hosting controlled by core-region corporations
protocols governed by core-funded foundations
investment pools heavily concentrated in wealthy nations
Peripheral actors may become dependent on core technological infrastructures, resulting in:
digital dependency
algorithmic governance imposed from abroad
extraction of local data for foreign benefit
limited control over protocol evolution
Thus, blockchain can mirror historical patterns of global inequality.
4.5 Blockchain Governance and the Role of the State
Blockchain’s institutional trajectory depends heavily on regulation.
4.5.1 Regulatory Stabilization
Legal clarity increases trust:
recognition of smart contracts
clear rules for digital assets
data protection integration
auditability standards
States can enhance institutional trust by making blockchain records legally enforceable.
4.5.2 Regulatory Centralization
Ironically, regulation can re-centralize blockchain:
mandatory KYC/AML rules
licensing requirements
state-run validator networks
government-orchestrated blockchains
This creates a hybrid governance model, with decentralization at the protocol layer and re-centralized oversight at the compliance layer.
4.6 Implications for Management, Tourism, and Technology
Management
Blockchain can enhance corporate governance but requires ethical oversight.
Firms must avoid using blockchain as symbolic compliance.
Managers need new competencies in digital governance, not just IT.
Tourism
Blockchain can authenticate reviews and bookings.
Small operators can gain visibility on decentralized platforms.
Identity systems can improve security and customer experience.
Technology Sector
Developers must understand their institutional role, not only their technical one.
Inclusive governance (open standards, community participation) prevents centralization.
Ethical considerations must be embedded into protocol design.
5. Findings
After integrating theory and analysis, five core findings emerge:
1. Transparency is programmable—and political.
Blockchain’s transparency effects depend on governance choices, field struggles, and power asymmetries.
2. Trust is reallocated, not removed.
Blockchain shifts trust from human institutions to technical protocols, but those protocols remain socially governed.
3. Blockchain adoption is driven by legitimacy pressures.
Institutional isomorphism—not only efficiency—explains rapid diffusion across industries.
4. Global inequalities may deepen without inclusive governance.
Core nations control infrastructures, capital, and expertise, risking digital dependency for peripheral regions.
5. Managers, regulators, and developers share responsibility for institutional outcomes.
Blockchain must be embedded in broader governance reforms, regulatory support, and ethical protections to realize its promises.
6. Conclusion
Blockchain represents a profound institutional innovation rather than a mere technical tool. It redistributes authority, redefines how trust is produced, and restructures coordination between organizations. When viewed through Bourdieu’s framework, blockchain emerges as a field of capital struggles. World-systems analysis shows that blockchain can both empower and marginalize nations. Institutional isomorphism reveals why organizations adopt blockchain even when benefits remain uncertain.
The future of blockchain in business will depend less on cryptographic advances and more on:
governance
regulation
inclusivity
socio-technical literacy
ethical design
global cooperation
Blockchain can enable transparent, trustworthy, and participatory economic systems—but only if institutional choices align with that vision. Otherwise, blockchain risks becoming yet another infrastructure reinforcing old inequalities under the guise of decentralization.
For scholars, managers, and policymakers, the challenge is to approach blockchain not as a deterministic technology but as a shaping force of institutional life, requiring critical reflection, long-term planning, and inclusive governance.
Hashtags
References
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