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When does everyone genuinely contribute in the private provision of a local public good? We first introduce a monotonic condition to characterize the relationship between the structure of the network that underlie the noncooperative game of private provision of local public goods on the one hand, and the preferences of the agents on the other, showing that the monotonic condition is a sufficient and necessary condition of existence of a distributed Nash equilibrium (DNE) in which each agent exerts a positive amount of effort to provision of the public good (Theorem 1). We then study the number of equilibria, and, by using the monotonic condition, characterize the condition under which the DNE set is a singleton, a continuum, or null (Theorem 2). As it turns out, the structure of the network and the agents’ preferences jointly shape the effort profile in the provision of local public goods.

The implications of the division of labor, capital, and technology for economic growth have long been a fundamental issue in development economics. This paper employs the bounds testing approach to cointegration to examine the relationship between the division of labor, capital accumulation, communication technology, and economic growth for China over the period 1952–99. We find that in the long run, capital stock and the division of labor both have statistically significant positive effects on growth, while in the short run the effects are not significantly positive. Telecommunication technology, rather surprisingly, has a statistically insignificant impact on growth both in the long run and in the short run. Our findings indicate that there exists a long run equilibrium relationship between capital and the division of labor on the one hand, and economic growth on the other, thereby lending support to the division of labor theory of growth.

Division of labour presents itself ubiquitously in economic activities, especially in knowledge economies of which a remarkable feature is the increasing specialization at the individual level, as well as at firm, industry, region and even economy and world levels. A central theme in classical economics, most prominently in the writings of Smith, Turgot, Marx and even in Marshall (Sun, 2005a), has been specialization and the division of labour. However, this virtually disappeared from economic analysis after the famous debate initiated by Piero Sraffa on the incompatibility between Marshall’s external economies and competitive equilibrium in the late 1930s. This was partly due to the lack of analytical frameworks that encompassed increasing returns to specialization and competitive equilibrium. However, things have changed dramatically in the last two decades. In fact, the rapidly growing literature on this subject matter, of which an up-to-date literature survey is Cheng and Yang (2004), is indicative of the point that the study of the division of labour may well, and should, be brought back to the core of the economics discipline. The central notion underlying most of the burgeoning literature is the concept of increasing returns to the division of labour, namely that the production possibility frontier (PPF) of the economy as a whole expands – and consequently the per capita income increases – with the nexus of exchanges and economic interdependence between its differing parts (for more involved elaborations, see, e.g. Buchanan and Yoon, 2000, p. 45; Sun, 2005b, pp. 16–17). Increasing returns to the division of labour are not the same thing as the concept of increasing returns to scale at the individual firm’s level that is conventionally adopted in the textbooks. Increasing returns to the division of labour are rooted in interdependence between the division of labour, which often occurs in the production sphere, and the extent of the market, which is of course associated with the process of market exchange. The so-called Smith Theorem (Stigler, 1951) that the division of labour is limited by the extent of the market is perhaps one of the best-known propositions to economics students. Less known, but no less important, however, is that the extent of the market is also dependent on the division of labour, which indeed largely determines productivity, and hence how much ‘surplus’ one can dispose of in the market exchange for other products/services. Each market participant’s choice of specialization in the exchange-nexus doesn’t just determine what and how

This paper investigates Allyn Young's two important doctrines concerning the division of labor and roundabout production. First, apart from advancing the state of knowledge, the progressive division of labor that can occur within a given population encourages the adoption of more specialized, differentiated intermediate goods in the production process. Second, the level of division of labor and the extent of the market depend on each other. Using a general equilibrium model with increasing returns to specialization, economies of complementarity between intermediate goods, and transaction costs, we demonstrate that the level of division of labor and the number of intermediate goods increase concurrently as transaction conditions are improved.

We show in this short note that the thesis in Tullock (1994) about how the environment coordinates the division of labor in non-human societies can be formulated by the fixed-point argument. As such, both what maybe called the Tullockian environmental coordination and the conventional Walrasian pricing coordination in economics turn out to be special cases of a more general principle, into which further exploration remains to be made.

A general equilibrium model with increasing return to labour specialisation and economies of transaction agglomeration is developed to address the residential land-rent escalation associated with the urbanisation process, which is in turn endogenised as a result of the evolution of the division of labour. The interplay among the geographical pattern of transactions, trading efficiency and the network size of the division of labour plays a crucial role in our story of urbanisation. We show that: as transaction conditions are improved, the equilibrium level of division of labour and individuals specialisation levels increase; the urban land-rent increases absolutely as well as relative to that in the rural area, the relative per capita lot size of residence in the urban and rural areas decreases; the diversity of occupations in the urban area and the population share of urban residents increase; and the productivity of all goods and per capital real income increase.

This paper develops a formal model with transaction costs and economies of specialisation to address the size of the firm and the level of social division of labour. It is shown that the increase of the level of social division of labour and the decline of firm size may concur, and that the size of the firm crucially depends on, among other things, the relative transaction efficiency of the labour market with that of the markets for intermediate products.