nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2019‒11‒18
four papers chosen by
Matthew Baker
City University of New York

  1. A Theory of Cultural Revivals By Murat Iyigun; Jared Rubin; Avner Seror
  2. The dynamics of costly social norms By H Peyton Young; Sam Jindani
  3. Emergence of Unorthodox Ownership and Governance Structures in East Asia By Laixiang, Sun
  4. Norm Compliance, Enforcement, and the Survival of Redistributive Institutions By Orhan Torul; Mehmet Yigit Gurdal; Alexander Vostroknutov

  1. By: Murat Iyigun (University of Colorado, Boulder); Jared Rubin (Chapman University); Avner Seror (Aix-Marseille Univ, CNRS, EHESS, Ecole Centrale, AMSE, Marseille, France)
    Abstract: Why do some societies fail to adopt more efficient institutions? And why do such failures often coincide with cultural movements that glorify the past? We propose a model highlighting the interplay—or lack thereof—between institutional change and cultural beliefs. The main insight is that institutional change by itself will not lead to a more efficient economy unless culture evolves in tandem. This is because institutional change can be countered by changes in cultural values complementary to a more "traditional" economy. In our model, forward-looking elites, who benefit from a traditional, inefficient economy, may over-provide public goods that are complementary to the production of traditional goods. This encourages individuals to transmit cultural beliefs complementary to the provision of traditional goods. A horse race results between institutions, which evolve towards a more efficient (less traditional) economy, and cultural norms, which are pulled towards "tradition" by the elites. When culture wins the horse race, institutions respond by giving more political power to traditional elites—even if in doing so more efficient institutions are left behind. We call the interaction between these cultural and institutional dynamics a cultural revival.
    Keywords: institutions, cultural beliefs, cultural transmission, institutional change
    JEL: D02 N40 N70 O33 O38 O43 Z10
    Date: 2019–11
  2. By: H Peyton Young; Sam Jindani
    Abstract: Social norms are costly if they are harmful for individuals but they remain in place for long periods of time because deviations are punished by members of the community. Examples include female genital cutting, foot binding, and codes of honour such as duelling. These and many other costly norms are seldom ‘all or nothing’: they are multidimensional and can take many altern¬ative forms. We develop a general theory of norm dynamics that focuses on the intermediate-run behaviour of such systems. Al-though in the (very) long run costly norms tend to die out, in the intermediate run transitions to less costly versions of the norm may occur that significantly retard its ultimate abandonment.
    Date: 2019–11–04
  3. By: Laixiang, Sun
    Abstract: This paper examines the nature of the unorthodox ownership and governance structures that are emerging among firms and the way these structures are supporting the remarkable economic growth in the transition economies of East Asia, as represented in particular by China and Vietnam. These economies are embarked on a distinctive process of property rights reform that resists widespread privatization in favour of evolutionary transformation. From the perspective that organizational innovation is an adaptive recombination and ownership is a bundle of rights, this paper focuses on an evaluation of the extent and consistency of property rights reform in the state-owned enterprise sector of these economies. It reveals the features of the ownership and governance structures of Chinese township-village-enterprises and their consequences for liability and incentives and justifies the fact that private entrepreneurs are typically willing to include community authority as an ambiguous owner or shelter within the embrace of state-owned enterprises. The paper also explores the conditions which have motivated the reform, the impact of property rights structure and reform on enterprise performance, and the relationship between adaptability and accountability.
    Keywords: International Development
  4. By: Orhan Torul; Mehmet Yigit Gurdal; Alexander Vostroknutov
    Date: 2018–09

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