Culture I

Culture and the Historical Process

• Origins of the literature: Engerman & Sokoloff (1997, 2002)

• Growing body of empirical evidence—long-term effects that historic
events can have on economic development.
• Channels? Institutions, culture, knowledge and technology, movements
between multiple equilibria…
LLSV’s (1997) Legal Origin Theory
• Legal systems based on British common law versus Roman civil law
• Countries with legal systems based on British common law offer greater
investor protection relative to countries with legal systems based on civil
law.
• For former colonies legal origin is largely exogenous to country
characteristics---a potential instrument
• Colonizer identity: correlations exist between the identity of the colonizer
and various measures of long-term economic development (Grier 1999,
Bertocchi & Canova 2002)
AJR (2001): the Persistence of Institutions
• Colonial rule and institutions
• Less deadly disease environment, greater European settlement,
more inclusive institutions.
• Early European mortality rates as an instrument
• Second-stage estimates: higher initial mortality, lower current
institutional quality.
Settler Mortality and GDP per capita
Engerman and Sokoloff (1997, 2002): Slavery
• Explain differential paths of development among the New World
countries of the Americas.
• Large-scale plantations, slave labor and the evolution of domestic
institutions.
• Initial differences in land and geography suitable for growing
globally traded crops like sugar predicts political and economic
inequality in later periods.
Ways for History to Matter
• Multiple Equilibria and Path Dependence
❑ Nunn (2007a): a model that features multiple equilibria in the security of
property rights and output per worker.
❑ QWERT, bombing in Japan during WWII, airport hubs, Tasmanians..

• Domestic Institutions
• Cultural Norms of Behavior
• Knowledge and Technology
Cultural Norms of Behavior
• Microfoundations for culture (CavalliSforza & Feldman 1981,
Boyd & Richerson 1985)
• Information acquisition can be costly.
• Shortcuts to learning are preferred.
• Culture as decision making heuristics or “rules of thumb”.
• When making decisions, individuals rely on gut-feelings and the
‘‘right’’ things to do.
Cultural Norms of Behavior
• Culture plays a potentially important role because it is a slow
moving variable whose evolution can be affected by historical
events.
• Examples: Max Weber (1930): Protestant reformation and
industrial capitalism; Mokyr (2008): “gentlemanly culture”;
Henrich et a. (2001, 2005): “ultimatum game”; Miguel &
Fisman (2007): corruption; Miguel et al. (2008): a culture of
violence; Fernandez & Fogli (2007): fertility.
Research on Cultural Traits & Development
• Licht, Amir N., Chanan Goldschmidt, and Shalom H. Schwartz.
"Culture rules: The foundations of the rule of law and other norms of
governance." Journal of comparative economics 35, no. 4 (2007): 659-
688.
• Guiso, Luigi, Paola Sapienza, and Luigi Zingales. Civic capital as the
missing link. No. w15845. National Bureau of Economic Research,
2010.
• Doepke, M., & Zilibotti, F. (2008). Occupational choice and the spirit
of capitalism. The Quarterly Journal of Economics, 123(2), 747-793.
Folklore as a mirror of culture
• Folklore comprises the unrecorded traditions of a people; it includes
both the form and content of these traditions and their style or
technique of communication from person to person.
• Folklore is the traditional, unofficial, non-institutional part of
culture. It encompasses all knowledge, understandings, values,
attitudes, assumptions, feelings, and beliefs transmitted in
traditional forms by word of mouth or by customary examples.
Folklore in Transmission
• Folklorists extract motifs and tales types out of a large body of
folktales.
• What is a motif?
• Recognizable and consistently repeated story elements that are used in the
traditional plot structures, or tale types, of many stories and folktales.
• It often has the following elements: actor, item & incident.

• A tale can be broken down into multiple motifs; each motif reoccurs in many
tales.
Motifs per group
Contemporary Attitudes
• What type of stories are predictive of current attitudes across countries
towards:
• Trust
• Patience
• Altruism
• Risk-taking
Trust, Patience, Altruism & Risk-Taking
• Generalized trust from the WVS: “The WVS measure asks whether
the respondent thinks most people can be trusted or whether they
would rather say that you can’t be too careful.”
• Patience from GPS
• Experimental measure: Intertemporal choice sequence using
staircase method.
• Subjective measure: Willingness to wait.
• Altruism from GPS:
• Experimental measure: depicted a situation in which the respondent
unexpectedly received 1,000 euros and asked them to state how
much of this amount they would donate.
• Subjective measure: asked respondents how willing they would be
to give to good causes without expecting anything in return on an
11-point scale.
• Risk preference from GPS:
• Experimental measure: consisted of a series of five binary choices.
Choices were between a fixed lottery, in which the individual could
win x or zero, and varying sure payments, y.
• Subjective measure: asked for the respondent’s self-assessment of
their willingness to take risks on an 11-point scale (In general, how
willing are you to take risks?)