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on Evolutionary Economics |
| By: | Iyigun, Murat (University of Colorado, Boulder); Rubin, Jared (Chapman University) |
| Abstract: | Why do some societies fail to adopt more efficient institutions in response to changing economic conditions? And why do such conditions sometimes generate ideological backlashes and at other times lead to transformative sociopolitical movements? We propose an explanation that highlights the interplay – or lack thereof – between new technologies, ideologies, and institutions. When new technologies emerge, uncertainty results from a lack of understanding how the technology will fit with prevailing ideologies and institutions. This uncertainty discourages investment in institutions and the cultural capital necessary to take advantage of new technologies. Accordingly, increased uncertainty during times of rapid technological change may generate an ideological backlash that puts a higher premium on traditional values. We apply the theory to numerous historical episodes, including Ottoman reform initiatives, the Japanese Tokugawa reforms and Meiji Restoration, and the Tongzhi Restoration in Qing China. |
| Keywords: | ideology, institutions, conservatism, beliefs, uncertainty, institutional change, technological change |
| JEL: | D02 N40 N70 O33 O38 O43 Z10 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10703&r=evo |
| By: | 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. |
| Keywords: | cultural transmission, evolution of institutions |
| JEL: | O10 P16 P48 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2017-039&r=evo |