Polycentric Institutions:
Basic Principles of Functioning within
“Digital Institutional Platform”
"Polycentric institutions" are the ability to create and operate an unlimited number of decision-making centers, which are economic entities (companies, organizations, institutions) and their projects, which are formally independent of each other. Polycentric institutions, if they operate within a single institutional platform (frame, jurisdiction), provide significant simplification of economic relations on the use of various resources to achieve public goods, private income and development of innovations, for ensuring economic growth and sustainable development.
Within the “digital governance frame” proposed by the project “Contribution of Individuals, Nations and Countries to World Development”, the principles of functioning of “polycentric institutions” (E. Ostrom: Nobel Prize in Economics in 2009) have their own features: a single common jurisdiction, reduction time to create institutions and time to make decisions, as well as a better mechanism for developing their "rules". In turn, the significant expansion of the field of activity and the acceleration of processes within the "digital governance frame" provide an opportunity to focus efforts on more rational decisions, the formation of feedback and improving the rules of such institutions.
In general, combining the principles of creating “polycentric institutions” with a “digital governance frame” significantly increases their institutional stability, efficiency and viability.
Principles:
Principle 1: establishing clear coordinates for the registration of the group (community) on the combination of its resources, as well as who is part of the group and what resources will ensure its creation.
Principle 2: the rules of operation of such institutions should offer new opportunities, impose simple and understandable restrictions, as well as regulate the relationship and distribution of profits, taking into account the proportionality of the contribution. If one of the members of the group does not bear the cost of maintaining common resources, then over time, other members of the group cease to follow the accepted rules.
Principle 3: the majority of group members should participate in the development of the rules of such an institution. They must take into account that such rules are fair and just.
Principle 4: control over the implementation of the rules is carried out by members of the group together, or with a constant rotation of members of the group who carry out the control.
Principle 5: In order to be successful, the rules should include a scale for grading incentives and sanctions, which depends on the achievements and violations in the context of when they were made.
Principle 6: it is necessary to create a digital resource with unlimited access of each member of the group and the Administration of the "digital governance frame", where it is possible to resolve conflict situations.
Principle 7: The rights and responsibilities of group members should be subject to the general rules of the "digital governance frame" and approved by the Administration. The Administration coordinates these rights and responsibilities with governments and relevant institutional agencies when implementing group projects.
Principle 8 applies to large-scale projects. It stipulates that the management of the resources of such projects involves different organizations that have their own rules, so a clear definition of the rights and responsibilities of such organizations is needed. This is ensured by the rules of the "digital governance frame", which have a higher level of legal force.
The unification of "polycentric institutions" based a single legal system within the "digital governance frame" provides an opportunity to achieve economic growth amid a crisis, pandemic, financial uncertainty and global risks, where corporate methods are losing their relevance.