Giampaolo Garzarelli

Institutions as Knowledge Capital: Ludwig M' Lachmann's Interpretative Institutionalism

The paper revisits the socioeconomic theory of the Austrian School economist Ludwig M. Lachmann. By showing that the common claim that Lachmann’s idiosyncratic (read: eclectic and multidisciplinary) approach to economics entails nihilism is unfounded, it reaches the following conclusions. (1) Lachmann held a sophisticated institutional position to economics that anticipated developments in contemporary new institutional economics. (2) Lachmann’s sociological and economic reading of institutions offers insights for the problem of coordination. (3) Lachmann extends contemporary new institutional theory without simultaneously denying the policy approach of comparative institutional analysis.

Of hackers and hairdressers: Modularity and the organizational economics of open-source collaboration

Using the idea of modularity, we study the general phenomenon of open‐source collaboration, which includes such things as collective invention and open science in addition to open‐source software production. We argue that open‐source collaboration coordinates the division of labor through the exchange of effort rather than of products: suppliers of effort self‐identify in the same way as suppliers of products in a market rather than accepting assignments like employees in a firm. We suggest that open‐source software (and other) projects are neither bazaars nor cathedrals, but hybrids manifesting both voluntary production and conscious planning.

The state and scope of the economic history of developing regions

ABSTRACT This paper examines the state and scope of the study of economic history of developing regions, underlining the importance of knowledge of history for economic development. While the quality of the existing research on developing countries is impressive, the proportion of published research focusing on these regions is low. The dominance of economic history research on the North American and Western European success stories suggests the need for a forum for future research that contributes to our understanding of how institutions, path dependency, technological change and evolutionary processes shape economic growth in the developing parts of the world. Many valuable data sets and historical episodes relating to developing regions remain unexplored, and many interesting questions unanswered. This is exciting. Economic historians and other academics interested in the economic past have an opportunity to work to begin to unlock the complex reasons for differences in development, the factors behind economic disasters and the dynamics driving emerging success stories.

The Organizational Approach of Capability Theory

Abstract Richard Langlois, Tony Yu & Paul Robertson (LYR) (2003) have assembled a collection of previously published papers that move beyond textbook production theory. This essay discusses work by Frank Knight and Hendrik Houthakker not reproduced in LYR in relation to the capability theory of economic organization. Knight identified the problem of organization as the search for and the coordination of different dispersed capabilities. Houthakker helps us to see more clearly that the benefits of specialization are not brought at zero cost; whatever is the governance structure employed, there will inevitably be coordination costs due to differences in capabilities.

Output Decomposition in the Presence of Input Quality Effects: A Stochastic Frontier Approach

How do physical capital accumulation and Total Factor Productivity (TFP) individually add to economic growth? We approach this question from the perspective of the quality of both labor and physical capital, namely human capital and the age of physical capital. We build a unique dataset by explicitly calculating the age of physical capital for each year of our time frame and estimate a stochastic frontier production function incorporating input quality in five groups of countries (Africa, East Asia, Latin America, South Asia, and West). Quality of capital significantly and positively affects output growth in three groups. The decomposition of output growth demonstrates that factor growth generally proves much more important than either the improved quality of factors or TFP growth in explaining output growth.

Review Article: Is State Building the Road to World Order?

We summarize Francis Fukuyama’s State Building: Governance and World Order in the Twenty-first Century (London, Profile Books, 2005)and explore the limits of its arguments. State Building is a book with a very wide scope that essentially tries to “ground” and expand the fields of political science and international relations with insights from the New Institutional Economics. We suggest that doubts remain concerning the theoretical framework proposed and that many links between theory and a series of substantive claims are left unarticulated; this raises the possibility that the book’s policy recommendations are unwarranted.