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On the Joint Evolution of Culture and Institutions

Author

Listed:
  • Alberto Bisin

    (New York University)

  • Thierry Verdier

    (Paris School of Economics)

Abstract
Explanations of economic growth and prosperity commonly identify a unique causal effect, e.g., institutions, culture, human capital, geography. In this paper we provide instead a theoretical modeling of the interaction between culture and institutions and their effects on economic activity. We characterize conditions on the socio-economic environment such that culture and institutions complement (resp. substitute) each other, giving rise to a multiplier effect which amplifies (resp. dampens) their combined ability to spur economic activity. We show how the joint dynamics of culture and institutions may display interesting non-ergodic behavior, hysteresis, oscillations, and comparative dynamics. Finally, in specific example societies, we study how culture and institutions interact to determine the sustainability of extractive societies as well as the formation of civic capital and of legal systems protecting property rights.

Suggested Citation

  • Alberto Bisin & Thierry Verdier, 2017. "On the Joint Evolution of Culture and Institutions," Working Papers 2017-039, Human Capital and Economic Opportunity Working Group.
    • Handle: RePEc:hka:wpaper:2017-039
    Note: MIP
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    References listed on IDEAS

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    More about this item

    Keywords

    cultural transmission; evolution of institutions;

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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