Adaptive Emergence of Platform Governance in Contexts of Underdeveloped Markets and Informality

Abstract

This paper explores the dynamics of governance that underpin the survival of developed-context-informed digital platforms in contexts characterized by underdeveloped markets and informality. We argue that despite considerable research into various governance strategies that digital platform firms (DPFs) adopt to address formal institutional and market voids, there remains limited understanding of how DPFs respond to the constraining realities of informality in underdeveloped markets. We fill this lacuna by undertaking a qualitative case study of a ridesharing platform in a context fraught with market voids and informal practices that do not comply with the governing rules of the platform, yet are socially legitimized. Our findings reveal that governance in such contexts adaptively emerges from attending to and learning from the unfolding micro activities and behaviors of platform participants, which are enacted through the dynamic interplay of digital (changes involving the digital platform architecture) and nondigital (changes involving relational arrangements) responses. We discuss the implications of our findings for the theory and evolving discourse on digital platform governance.