Research suggests that software piracy reduces poverty.

Teddy Sagi
Reading time: 3 minutes

Piracy is a controversial topic, and there is a lot of disagreement about how to study the effects of copyright violations. A new academic study suggests that software piracy might make people less poor, which is interesting. Even though this seems like a reasonable conclusion, there could be more going on.

When people who own copyrights talk about online piracy, they often talk about the losses that come with it. But not all illegal downloads are a loss.

Some people steal content because they don’t want to pay for it, but others can’t afford it.

Piracy and Poverty

This is especially true with software, which can be pretty expensive. Software piracy is attractive because it can also be a way out of poverty. People can start their businesses or join the workforce, for example, if they know how to code or edit.

On the Internet, you can find many famous designers who started with pirated software, learned how to use it well, and then became professionals. This makes me wonder: can steal software help people who are poor?

The Balkan Journal of Social Sciences has just published a new paper to shed some light on the issue. Between 2003 and 2017, the researchers looked at how software piracy affected poverty in developing and Latin American economies.

The piracy rate is based on how much-pirated software is used per person or how much money is said to have been lost. There are six ways to measure poverty, one of which is the percentage of the population living below the poverty threshold.

Study Links Software Piracy to Less Poverty

The overall conclusions from these data are obvious. More piracy is linked to less poverty. This effect is the same and statistically significant for all six poverty indicators.

“[T]here is a statistically significant reverse relationship between usage of pirated software and poverty in all six poverty models for both developing and Latin American countries samples,” the researchers write.

This link between piracy and poverty stays the same even when other factors, like unemployment and health spending, are considered. This means that the idea that “less people are poor when more people use pirated software” seems likely.

Less Poverty Leads to More Piracy?

As mentioned earlier, finding such an effect would make sense. Still, the paper’s section on methods isn’t very long, and there’s no section on the results that goes into more detail. But people should always be careful about saying that these connections are causes and effects.

The results might make sense if the research question is asked differently. In other words, does less poverty cause more software to be stolen?

It’s easy to imagine that people who live far below the poverty line wouldn’t care much about downloading Photoshop. But as their poverty level goes down, they might be able to buy a computer, which increases their chances of stealing anything.

So maybe pirating software makes people less poor, but fewer poor people also make them more likely to steal software. This “flywheel effect” might explain why the results were so significant, and it might be extreme in developing countries.

This backward relationship isn’t mentioned in the paper, but it wouldn’t be surprising if it played a role here. We asked the researchers for their thoughts, but they didn’t get back to us, but it might be worth doing a follow-up study.

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