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On Socio-economic Roles and Specialization

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  • Robert P. Gilles

    ()
    (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)

  • Emiliya Lazarova

    ()
    (Department of Econometrics, Universiteit van Tilburg)

  • Pieter H.M. Ruys

    ()
    (Universiteit van Tilburg)

Abstract

Xiaokai Yang's theory of economic specialization under increasing returns to scale is a formal development of the fundamental Smith-Young theorem on the extent of the market and the social division of labor. In this theory specialization and, thus, the social division of labor is firmly embedded within a system of perfectly competitive markets. This leaves unresolved whether and how such development processes are possible in economies based on more primitive, non-market organizations. In this paper we discuss a general relational model of economic interaction. Within this non-market environment we discuss the emergence of economic specialization and eventually of economic trade and a social division of labor. We base our approach on three levels in organizational development: the presence of a stable relational structure; the presence of relational trust and subjective specialization; and, finally, the emergence of objective specialization through the institution and the social recognition of economic roles.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 06-035/2.

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Date of creation: 31 Mar 2006
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Handle: RePEc:dgr:uvatin:20060035

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Web page: http://www.tinbergen.nl

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Keywords: Economic development; social division of labor; non-market economies.;

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  1. Robert Gilles & Dimitrios Diamantaras & Pieter Ruys, 2003. "Optimal design of trade institutions," Review of Economic Design, Springer, vol. 8(3), pages 269-292, October.
  2. Yang, Xiaokai & Borland, Jeff, 1991. "A Microeconomic Mechanism for Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 460-82, June.
  3. Szilvia Papai, 2000. "Unique Stability in Simple Coalition Formation Games," Econometric Society World Congress 2000 Contributed Papers 1537, Econometric Society.
  4. Cheng, Wenli & Yang, Xiaokai, 2004. "Inframarginal analysis of division of labor: A survey," Journal of Economic Behavior & Organization, Elsevier, vol. 55(2), pages 137-174, October.
  5. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472 Elsevier.
  6. Gilles, R.P. & Lazarova, E.A. & Ruys, P.H.M., 2006. "Stability, Specialization and Social Recognition," Discussion Paper 2006-17, Tilburg University, Center for Economic Research.
  7. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-50, October.
  8. Matthew O. Jackson & Asher Wolinsky, 1995. "A Strategic Model of Social and Economic Networks," Discussion Papers 1098R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  9. Robert P. Gilles & Dimitrios Diamantaras, 2005. "New Classical Economics: Towards A New Paradigm For Economics?," Division of Labor & Transaction Costs (DLTC), World Scientific Publishing Co. Pte. Ltd., vol. 1(01), pages 35-56.
  10. George J. Stigler, 1951. "The Division of Labor is Limited by the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 59, pages 185.
  11. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
  12. Sun, Guang-Zhen & Yang, Xiaokai & Zhou, Lin, 2004. "General equilibria in large economies with endogenous structure of division of labor," Journal of Economic Behavior & Organization, Elsevier, vol. 55(2), pages 237-256, October.
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