Garzarelli, Giampaolo and Limam, Yasmina Reem and Thomassen, Bjørn (2007): Open Source Software and Economic Growth: A Classical Division of Labor Perspective.
Download (309kB) | Preview
The article turns to classical economic insights on the division of labor and to institutional reasoning to identify some costs and benefits of Open Source Software (OSS) and proprietary software production. It suggests that, thanks to its licenses, OSS favors market expansion more than proprietary software does by tapping into spontaneous work input. The spontaneous tapping leads to a division of labor that exhibits what the article calls redundant economies. By generating a circle of knowledge growth, reuse, and sharing, redundant economies lead to increasing returns, which are crucial for economic growth.
|Item Type:||MPRA Paper|
|Institution:||School of Economic and Business Sciences, University of the Witwatersrand|
|Original Title:||Open Source Software and Economic Growth: A Classical Division of Labor Perspective|
|Keywords:||Division of Labor; Extent of the Market; Increasing Returns; Institutions; Knowledge; Open Source Software; Redundant Economies|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O34 - Intellectual Property and Intellectual Capital
D - Microeconomics > D2 - Production and Organizations > D20 - General
O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L17 - Open Source Products and Markets
|Depositing User:||Giampaolo Garzarelli|
|Date Deposited:||05. Jul 2007|
|Last Modified:||13. Feb 2013 00:37|
Alchian, Armen A. 1977. “Some Economics of Property Rights,” in Idem, Economic Forces at Work. Indianapolis: Liberty Fund, Inc.: 127-149. Originally published in 1965, Il Politico 30(4): 816-829. Ames, Edward, and Nathan Rosenberg 1965. “The Progressive Division and Specialization of Industries,” Journal of Development Studies 1(4): 363–383(July). Anonymous 2007. “Lessons from Apple: What Other Companies Can Learn from California’s Master of Innovation,” The Economist 383(8532): 11(June 9-15). Aoki, Masahiko 2007. “Endogenizing Institutions and Institutional Changes,” Journal of Institutional Economics 3(1): 1-31(April). Arora, Ashish, Alfonso Gambardella and Enzo Rullani 1997. “Division of Labor and the Locus of Inventive Activity,” Journal of Management and Governance 1(1): 123-140(November). Arrow, Kenneth J. 1962. “Economic Welfare and the Allocation of Resources to Invention,” in Richard R. Nelson, ed., The Rate and Direction of Inventive Activity: Economic and Social Factors. Princeton: Princeton University Press: 609-625. Avgerou, Chrisanthi 1998. “How Can IT Enable Economic Growth in Developing Countries?,” Information Technology for Development 8(1): 15-28(January). Babbage, Charles 1835. On the Economy of Machinery and Manufactures, 4th edition. London: Charles Knight. Baetjer, Howard Jr. 1998. Software as Capital. An Economic Perspective on Software Engineering. Los Alamitos, CA: IEEE Computer Society. Benkler, Yochai 2002. “Coase’s Penguin, or, Linux and the Nature of the Firm,” Yale Law Journal 112(3): 369-446(December). Bresnahan, Timothy F. and Alfonso Gambardella 1998. “The Division of Inventive Labor and the Extent of the Market,” in Elhanan Helpman, ed., General Purpose Technologies and Economic Growth. Cambridge, Mass.: MIT Press: 253-281. Buchanan, James M., and Yong J. Yoon 1999 “Generalized Increasing Returns, Euler’s Theorem, and Competitive Equilibrium,” History of Political Economy 31(3): 511-523(Fall). Conway, Melvin E. 1968. “How do Committees Invent?,” Datamation 14(4): 28-31(April). Dalle, Jean-Michelle and Paul A. David 2004. “The Allocation of Software Development Resources in Open Source Production Mode,” in Joseph Feller, Brian Fitzgerald, Scott A. Hissam and Karim Lakhani, eds., Perspectives on Free and Open Source Software. Cambridge, MA: MIT Press: 297-328. David, Paul A. 1985. “Clio and the Economics of QWERTY,” American Economic Review, Papers and Proceedings 75(2): 332-337(May). Dosi, Giovanni 1982. “Technological Paradigms and Technological Trajectories: A Suggested Interpretation of the Determinants and Directions of Technical Change,” Research Policy 11(3): 147-162(June). Eunice, Jonathan 1998. Beyond the Cathedral, Beyond the Bazaar (May 11). Online: http://www.illuminata.com/cgi-local/pub.cgi?docid=cathedral Foss, Nicolai J. 1998. “The New Growth Theory: Some Intellectual Growth Accounting,” Journal of Economic Methodology 5(2): 223-246(December). Foss, Nicolai J. and Giampaolo Garzarelli forthcoming. “Institutions as Knowledge Capital: Ludwig M. Lachmann’s Interpretative Institutionalism,” Cambridge Journal of Economics. Garud, Raghu, and Arun Kumaraswamy 1995. “Technological and Organizational Designs for Realizing Economies of Substitution,” Strategic Management Journal 16(Special Issue: Technological Transformation and the New Competitive Landscape): 93-109(Summer). Garzarelli, Giampaolo 2004. “Open Source Software and the Economics of Organization,” in Jack Birner and Pierre Garrouste, eds., Markets, Information and Communication. London and New York: Routledge: 47-62. Garzarelli, Giampaolo 2006. “Cognition, Incentives, and Public Governance: Laboratory Federalism from the Organizational Viewpoint,”Public Finance Review 34(3): 235-257(May). Garzarelli, Giampaolo forthcoming. “The Organizational Approach of Capability Theory: A Review Essay,” Review of Political Economy. Greif, Avner 2006. Institutions and the Path to the Modern Economy: Lessons from Medieval Trade. Cambridge: Cambridge University Press. Haefliger, Stefan, Georg von Krogh and Sebastian Spaeth forthcoming. “Code Reuse in Open Source Software,” Management Science. Hayek, Friedrich A. von 1945. “The Use of Knowledge in Society,” American Economic Review 35(4): 519-530(September). Hayek, Friedrich A. von 1982. Law, Legislation and Liberty. Volume 1: Rules and Order (First published in one volume with corrections and revised preface in 1982). London: Routledge. Volume 1 first published 1973. Hurst, James Willard 1967. Law and the Conditions of Freedom in the Nineteenth-century United States. Madison, Milwaukee, and London: The University of Wisconsin Press. Krichel, Thomas, and Christian Zimmerman 2005. “The Economics of Open Bibliographic Data Provision,” Working Paper 2005-01, University of Connecticuct, Storrs, Department of Economics. Online: http://ideas.repec.org/p/uct/uconnp/2005-01.html Lakhani, Karim R. and Eric von Hippel 2003. “How Open Source Software Works: ‘Free’ User-to-User Assistance,” Research Policy 32(6): 923-943(June). Langlois, Richard N. 1988. “Economic Change and the Boundaries of the Firm,” Journal of Institutional and Theoretical Economics 144(4): 635-657(September). Langlois, Richard N. 1999. “Scale, Scope, and the Reuse of Knowledge,” in Sheila C. Dow and Peter E. Earl, eds., Economic Organization and Economic Knowledge: Essays in Honor of Brian J. Loasby. Cheltenham: Edward Elgar: 239-254. Langlois, Richard N. 2003. ”Cognitive Comparative Advantage and the Organization of Work: Lesson from Herbert Simon’s Vision of the Future,” Journal of Economic Psychology 24(2): 167-187(April). Langlois, Richard N., and Giampaolo Garzarelli 2005. “Of Hackers and Hairdressers: Modularity and the Organizational Economics of Open-source Collaboration,” Unpublished Paper. Langlois, Richard N. and Paul L. Robertson 1996. “Stop Crying over Spilt Knowledge: A Critical Look at the Theory of Spillovers and Technical Change,” Paper presented at the MERIT conference on Innovation, Evolution and Technology, August 25-27, Maastricht, the Netherlands. Leijonhufvud, Axel 1986. “Capitalism and the Factory System,” in Richard N. Langlois, ed., Economics as a Process: Essays in the New Institutional Economics. New York: Cambridge University Press: 203-223. Lerner, Josh, and Jean Tirole 2002. “Some Simple Economics of Open-source,” Journal of Industrial Economics 50(2): 197-234(June). Liebowitz, S. J., and Stephen E. Margolis 1990. “The Fable of the Keys,” Journal of Law and Economics 33(1): 1-25(April). Lucas, Robert E. 1988. “On the Mechanics of Economic Development,” Journal of Monetary Economics 22(1): 3-42(July). Marglin, Stephen A. 1974. “What Do Bosses Do? The Origin and Functions of Hierarchy in Capitalist Production,” Review of Radical Political Economics 6(2): 60-112(Summer). Miller, Mark S., and K. Eric Drexler 1988. “Markets and Computation: Agoric Open Systems,” in Bernando A. Huberman, ed., The Ecology of Computation. Amsterdam: North-Holland: 133-176. Nelson, Richard R., and Sidney G. Winter 1977. “In Search of Useful Theory of Innovation,” Research Policy 6(1): 36-76(January). North, Douglass C. 1990. Institutions, Institutional Change and Economic Performance. New York: Cambridge University Press. Raymond, Eric S. 2001. The Cathedral and the Bazaar. Musings on Linux and Open Source by an Accidental Revolutionary (revised edition). Sebastopol, CA: O’Reilly & Associates, Inc. Robertson, Paul L. and Lee J. Alston 1992. “Technological Choice and the Organization of Work in Capitalist Firms,” Economic History Review (New Series) 45(2): 330-349(May). Romer, Paul M. 1986. “Increasing Returns and Long-Run Growth,” Journal of Political Economy 94(5): 1002-1037(October). Rosenberg, Nathan 1960. “Some Institutional Aspects of the Wealth of Nations,” Journal of Political Economy 68(6): 557-570(December). Rosenberg, Nathan 1963. “Technological Change in the Machine Tool Industry, 1840-1910,” Journal of Economic History 23(4): 414-443(December). Rosenberg, Nathan 1969. “The Direction of Technological Change: Inducement Mechanisms and Focusing Devices,” Economic Development and Cultural Change 18(1), Part I: 1-24(October). Sanchez, Ron, and Joseph T. Mahoney 1996. “Modularity, Flexibility, and Knowledge Management in Product and Organizational Design,” Strategic Management Journal 17(Special issue: Knowledge and the Firm): 63–76(Winter). Simon, Herbert A. 1998. “The Architecture of Complexity: Hierarchic Systems,” in Idem, The Sciences of the Artificial, 3rd edition, second printing. Cambridge, Mass.: MIT Press: 183-216. Originally published in 1962, Proceedings of the American Philosophical Society 106(6): 467-482(December 12). Simon, Herbert A. 2002. “Near Decomposability and the Speed of Evolution,” Industrial and Corporate Change 11(3): 587-599(June). Smith, Adam 1981. An Inquiry into the Nature and Causes of the Wealth of Nations (two volumes). Indianapolis: Liberty Fund. First published 1776. Solow, Robert M. 1956. “A Contribution to the Theory of Economic Growth,” Quarterly Journal of Economics 70(1):65-94(February). Stigler, George J. 1951. “The Division of Labor Is Limited by the Extent of the Market,” Journal of Political Economy 59(3): 185-193(June). Swan, Trevor W. 1956. “Economic Growth and Capital Accumulation,” Economic Record 32(2): 334-361. UNCTAD 2003. E-Commerce and Development Report 2003. New York and Geneva: United Nations. Wheeler, David A. n.d. “Open-source Software/Free Software (OSS/FS) References.” Online: http://www.dwheeler.com/oss_fs_refs.html Wheeler, David A. 2007. “Make your Open-source Software GPL-Compatible. Or Else.” (March 7) Online: http://www.dwheeler.com/essays/gpl-compatible.html Wheeler, David A. 2005. “Why Open-source Software/Free Software (OSS/FS)? Look at the Numbers!” (November 14). Online: http://www.dwheeler.com/oss_fs_why.html Williamson, Oliver E. 2005. “The Economics of Governance,” American Economic Review, Papers and Proceedings 95(2): 1-18(May). Winter, Sidney G. 2006. “Toward a neo-Schumpeterian Theory of the Firm,” Industrial and Corporate Change 16(1):125-141(February). Young, Allyn A. 1928. “Increasing Returns and Economic Progress,” Economic Journal 38(152): 527-542(December). Young, Allyn A. 1990. “Big Business: How the Economic System Grows and Evolves like a Living Organism. What Will Become of the Small Retailer?,” in Roger J. Sandilands, ed., Journal of Economic Studies, 17(3/4: Special Issue on Nicholas Kaldor’s Notes on Allyn Young’s LSE Lectures, 1927-29): 161-170. Originally published anonymously in 1929, The Book of Popular Science, Vol. 15, New York, Ch. 38.