EH409 - Chinese Economic History: Culture,

Institutions and Economic Growth

Culture
Questions

1.What Constitutes Culture?

• What are the various elements that make up the concept of culture?
2.Why Does Culture Impact Economic Development?
• Why is culture considered a significant factor in influencing economic growth
and development?
3.How Does Culture Influence Economic Growth?
• In what ways does culture shape the path of economic growth?
4.Can You Provide Examples of Cultural Norms?
• What are some specific examples of cultural norms, such as trust and gender
norms, that demonstrate the influence of culture on economic development?
Culture and Economy

• In the 1950s and 1960s, social scientists often treated

modernization and Westernization as interchangeable concepts.
• This perspective assumed a linear and convergent view of history,
suggesting that non-Western societies would develop by adopting
and assimilating Western values, practices, and institutions.
Diverse Paths to Capitalism

• The rapid economic growth of Eastern Asia challenged the notion

of a single universal model of capitalism.
• It revealed that different paths can lead to capitalist development,
and capitalism can take on diverse forms as it is influenced by
various local conditions.
Cultural Roots of Economic Behavior

• The interplay between ancient cultures and the modern market.

• The historical origins of contemporary societies, with a specific
focus on post-reform China, where the state and employers
appealed to a new work culture by reinterpreting ancient codes of
Confucian behavior.
The Symbiotic Relationship Between Culture
and Capitalism
• Just as global capitalism has transformed Eastern Asian countries,
indigenous cultures of these regions have also shaped capitalist
institutions.
• The influence between capitalism and culture is reciprocal and
dynamic, illustrating how they continuously impact and adapt to
each other.
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 Behaviour
• 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
Examples of Motifs in Berezkin

• Title: Task-giver is a king or a chief

• Description: Person who gives difficult tasks to the hero is a prominent figure in
social hierarchy, i.e., a head of political unit of community- or higher level and
not a mythical being; 219 societies
• Title: Kind and Unkind Girl
• Description: A girl meets a powerful person, behaves herself in a right way and is
successful. Another behaves in a wrong way and is punished; 160 societies
• Title: Earth grows big
• Description: Original earth was small and later increased in size or the fertile
soil grew from a small amount of original substance; 280 societies.
The Interpretation of Motifs

• Conceptnet
• A knowledge graph created by the MIT Media Lab which leverages
information from crowdsourced resources (Wiktionary, DPpedia,
WordNet, Open Mind Common Sense) to build a large commonsense
knowledge database. We look over the 50 most related words per concept.
• Amazon Mechanical Turk
• Multiple MTurk Workers (“Turkers”) to classify each motif.
• Independent classifications per cultural trait.
Structure of Analysis
• Is the physical environment reflected in the oral tradition of a society?

• Earthquake – distance to earthquake zones

• Storm – Flash lightning density

• Frozen – Low temperature

• Crop – Agricultural Suitability

• Do the motifs describe an economy/society in a way that is consistent with the ethnographic record?

• Modes of Subsistence

• Political Complexity

• Trade

• High Gods

• Reconstruct historical norms from a group’s oral tradition.

• Trust

• Risktaking

• Gender Roles
Contemporary Attitudes

• What type of stories are predictive of current attitudes across

countries towards:
• Trust
• Risk-taking
• Attitudes towards women
• First, we match the groups in Berezkin to the groups in Atlas Narodov
Mira (ANM).
• Second, using the fraction of groups within countries from the
database of the Atlas Narodov Mira we construct a country-level
catalogue of motifs. This procedure is accurate for countries where
indigenous populations as of 1500 constitute a large fraction of the 1950
population.
• For the groups in ANM that correspond to modern-country
nationalites, Brazilians for example, we used the percentages of the
countries of origin from Putterman and Weil (2010).
• We use two different methods to map motifs to values.
• First, we apply shrinkage techniques (Lasso regressions) to the
full set of concepts from: Conceptnet ( 10k concepts).
• Second, we hire multiple Amazon Mechanical Turk Workers
(“turkers”) to read and classify motifs according to our
instructions.
Consequences of Antisocial Behavior in
Folklore
• Antisocial behavior in folktales may or may not be punished
• We identify motifs tagged by concepts cheat, deceive or trick.
• There are a total of 284 motifs that are tagged by those concepts.
• We ask Mechanical Turkers to classify these 284 motifs into
• 4 categories:
• Not antisocial.
• Antisocial and succesful.
• Antisocial and unsuccesful/punished.
• Antisocial but outcome is no described.
Unsuccessful Tricksters
Trust as Predicted by the Oral Tradition
Trust and Economic Performance

• Trust is known to be strongly correlated with economic performance.

• Do countries whose oral tradition emphasizes antisocial behavior being
punished also register better economic performance?
Consequences of Risk-Taking in Folklore

• Risk-taking behavior in folktales may or may not succeed

• We identify motifs tagged by concepts challenge or competition.
• There are a total of 87 motifs that are tagged by those concepts.
• We ask Mechanical Turkers to classify these 87 motifs into 4
categories:
• The character(s) is successful.
• The character(s) is unsuccessful.
• It is not clear whether the character(s) is successful or not.
• No challenging/difficult situation is described.
Harmful Contests
Risk-Taking as Predicted by Folklore
Gender Roles in the Oral Tradition

• How are gender norms described and prescribed in a society’s oral

tradition?
• We ask Mechanical Turkers to identify relevant content in motifs.
• A simple question whether a woman is portrayed favorably or
unfavorably will not cut it, as such judgment depends crucially on a
respondent’s own values.
• We consult the work of Towbin et al. (2008) and Lauzen,
• Dozier, and Horan (2008) for a breakdown of gender stereotypes.
• The literature identifies the following set of categories
predominantly associated with men:
• Violent/dominant/strong, (physically) active, angry, arrogant,
sexual.
• For women the predominant categories are:
• Hysterical/emotional/childish, afraid, beautiful,
domestic/dependent/submissive.
Gender-Relevant Motifs

• There are a total of 1090 motifs that feature either a male or a

female.
• In 584 of those motifs both a male and a female character are present.
• Each gender-relevant motif is classified by 9 turkers.
• We allow turkers to choose more than one answer per motif.
• We use the mode response across turkers.
Male Bias
Additional Readings

• Raquel Fernandez (2011). “Does culture matter?”

• Delve into the question of whether culture matters in economics, exploring
its effects on social behavior.
• The epidemiological approach.
• Investigate how culture shapes outcomes by comparing different
immigrant groups residing in the same country.
• Immigrants bring diverse cultures but share a common institutional and
economic environment, enabling the separation of culture's impact
from the original economic and institutional context.
Additional Readings

• Armin Falk et al. (2018). “Global evidence on economic

preferences”. The Quarterly Journal of Economics 133.4, 1645–
1692
• Gain insights into global variations in economic preferences,
drawing from an experimentally validated survey dataset.
• Explore concepts like time preference, risk preference,
positive and negative reciprocity, altruism, and trust.
Additional Readings

• Francis Fukuyama (1996). Trust: social virtues and the creation of prosperity.
• An exploration of the emerging global economic order "after History."
• Understand how economic life is intertwined with culture and relies on the
moral bonds of social trust.
• Robert D Putnam et al. (2000). Bowling Alone: The Collapse and Revival of
American Community.
• Discover how Americans have become increasingly disconnected from family,
friends, neighbors, and democratic structures and explore potential
reconnection strategies.
Additional Readings

• Joel Mokyr (2016). “A Culture of Growth: the Origins of the Modern

Economy.”
• Learn about the culture of growth specific to early modern
Europe and the European Enlightenment, which laid the
foundations for scientific advances and pioneering inventions.
• Explore the intersection of economics, the history of science and
technology, and models of cultural evolution to understand how
culture shapes societal transformations.
Additional Readings

• Nathan Nunn and Leonard Wantchekon (2011). “The slave

trade and the origins of mistrust in Africa.”
• Investigate how current differences in trust levels within
Africa can be traced back to the transatlantic and Indian
Ocean slave trades.
• Understand how the impact of the slave trade persists
through factors that are internal to individuals, such as
cultural norms, beliefs, and values.