nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2017‒04‒30
five papers chosen by
Matthew Baker
City University of New York

  1. Roots of Autocracy By Oded Galor; Marc Klemp
  2. Endogenous Innovation: The Creative Response. By Antonelli, Crisiano
  3. Historical Prevalence of Infectious Diseases, Cultural Values, and the Origins of Economic Institutions By Nikolaev, Boris; Salahodjaev, Raufhon
  4. Structural Change and the Fertility Transition in the American South By Ager, Philipp; Brueckner, Markus; Herz, Benedikt
  5. How Can Formal Norms Change Informal Norms? Douglass North’s Approach to Ideologies and Institutional Change By Ambrosino, Angela; Fiori, Stefano

  1. By: Oded Galor; Marc Klemp
    Abstract: Exploiting a novel geo-referenced data set of population diversity across ethnic groups, this research advances the hypothesis and empirically establishes that variation in population diversity across human societies, as determined in the course of the exodus of human from Africa tens of thousands of years ago, contributed to the differential formation of pre-colonial autocratic institutions within ethnic groups and the emergence of autocratic institutions across countries. Diversity has amplified the importance of institutions in mitigating the adverse effects of non-cohesiveness on productivity, while contributing to the scope for domination, leading to the formation of institutions of the autocratic type.
    JEL: O10 O43 Z1
    Date: 2017–03
  2. By: Antonelli, Crisiano (University of Turin)
    Abstract: The limits of both evolutionary approaches, based upon biological metaphors, and the new growth theory based on the early economics of knowledge, are becoming apparent. Considerable progress can be made by implementing an evolutionary complexity approach that builds upon the legacy of Schumpeter (1947) with the notions of: i)reactive decision making; ii) multiple feedback; iii) innovation as the outcome of an emergent system process rather than individual action; iv);organized complexity and knowledge connectivity; iv) endogenous variety; vi) non ergodic path dependent dynamics. Building upon these bases, the paper articulates an endogenous theory of innovation centered upon the analysis of the systemic conditions that make the creative reaction and hence the introduction of innovations possible.
    Date: 2017–03
  3. By: Nikolaev, Boris; Salahodjaev, Raufhon
    Abstract: It is widely believed that economic institutions such as competitive markets, the banking system, and the structure of property rights are essential for economic development. But why economic institutions vary across countries and what are their deep origins is still a question that is widely debated in the developmental economics literature. In this study, we provide an empirical test for the provocative hypothesis that the prevalence of infectious diseases influenced the formation of personality traits, cultural values, and even morality at the regional level (the so called Parasite- Stress Theory of Values and Sociality), which then shaped economic institutions across countries. Using the prevalence of pathogens as an instrument for cultural traits such as individualism, we show in a two-stage least squares analysis that various economic institutions, measured by different areas of the index of Economic Freedom by the Heritage Foundation, have their deep origins in the historical prevalence of infectious diseases across countries. Our causal identification strategy suggests that cultural values affect economic institutions even after controlling for a number of confounding variables, geographic controls, and for different sub-samples of countries. We further show that the results are robust to four alternative measures of economic and political institutions.
    Keywords: economic institutions, cultural values, pathogens
    JEL: B00 O1 O17
    Date: 2017–02
  4. By: Ager, Philipp (Department of Business and Economics); Brueckner, Markus (Australian National University); Herz, Benedikt (European Commission)
    Abstract: This paper provides new insights on the link between structural change and the fertility transition. In the early 1890s agricultural production in the American South was severely impaired by the spread of an agricultural pest, the boll weevil. We use this plausibly exogenous variation in agricultural production to establish a causal link between changes in earnings opportunities in agriculture and fertility. Our estimates show that lower earnings opportunities in agriculture lead to fewer children. We identify two channels: households staying in agriculture reduced fertility because children are a normal good, and households switching to manufacturing faced higher opportunity costs of raising children. The rather bleak outlook for unskilled agricultural workers also increased the demand for human capital, which reinforced the fertility decline that occurred in the American South during the late 19th and early 20th centuries.
    Keywords: Fertility transition; structural change; industrialization; agricultural income
    JEL: J13 N31 O15
    Date: 2017–04–24
  5. By: Ambrosino, Angela; Fiori, Stefano (University of Turin)
    Abstract: The paper argues that in North’s theory the reciprocal influence between organizations and institutions, and between informal and formal norms, is interpretable as a continuous alternation of bottom-up and top-down processes. Bottom-up processes arise from shared beliefs, and they concern how informal norms engender formal norms. Top-down processes explain how formal norms influence informal norms. North does not exhaustively deal with this latter process, although he provides elements which go in this direction. The concept of ideology illustrates this problem. It is conceived as the outcome of bottom-up processes whereby shared interpretations of reality emerge, but not as a tool used by norm entrepreneurs to trigger top-down processes of change in informal norms. Since formal norms incorporate ideologies, these processes concern how formal norms give shape to informal norms. The paper suggests that theories of social construction – with specific attention to legal studies, international relations inquiries, and Schumpeterian approaches – can integrate North’s view.
    Date: 2017–03

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