• Theodora Christou and Ian Walden

Disruptive Technologies: Legal and Regulatory Frameworks Implications in Emerging Markets


In our report, ‘Legal and Regulatory Implications of Disruptive Technologies in Emerging Markets’, Professor Walden and I consider a range of disruptive technologies including, artificial intelligence, geo-spatial technology, nano-technology, drones, cloud-based technologies, the Internet of Things, and blockchain technology (including cryptocurrencies and smart contracts). The report was commissioned by the World Bank Legal Department, so our focus is on the relevance of these technologies in emerging markets with the objective of furthering sustainable economic development. What is clear is that innovations are continuously expanding their use and applications both in the private and public sector. These include the fields of agriculture, finance, public administration, trade, human rights, healthcare, and energy. Some of the existing uses are quite remarkable, having the potential to alleviate poverty and support food security initiatives, often operating in harsh conditions (both natural and man-made).

Our report, defines the technologies, listing some potential uses for development before highlighting the legal issues that should be considered when financing projects which include a disruptive technology component. The legal and regulatory implications are not unique to development projects, but have wider meaning for states, corporations and individuals. We identify three critical areas of law and regulation: data protection, cyber-security, and intellectual property. Beyond these, the applicable areas of law will depend on the technology and its proposed use. For example, the use of smart contracts will obviously raise questions of contract formation, validity and evidence. Our report examines the range of legal and regulatory issues, substantive and procedural rules, vertical sectoral activities and horizontal conduct, as well as rules and standards set by non-state actors and institutions.

The report also considers FinTech, RegTech, and privacy enabling technologies (PET) as examples of ‘technology as a solution’. The rate at which technology is developing, taken together with the discourse of globalisation, means that traditional law is often insufficient and inappropriate to regulate innovations. In addition to supporting systems, such as standards, other tools are being used, particularly private law solutions such as contract. Compliance of these new technologies with existing regulations is not always clear for either the regulator or the innovator. ‘Sandboxes’ are an innovative tool being used to provide a forum for new technologies or new business models to operate in a quasi-regulation free environment so that any compliance issues can be identified and addressed.

Ultimately, a balance must be achieved between creating a legal environment that facilitates innovation, whilst providing the necessary protection to users. For disruptive technologies to have a positive impact on development, they require an enabling environment, not only legal, but political, economic and social as well.

Theodora Christou and Ian Walden, Queen Mary University of London


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