Francisco Brahm
London Business School



(Wednesday, 17th May 2023)

Title : The (cultural) evolution of institutions and organizations

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In this lecture, I will introduce the theory of cultural evolution, developed in evolutionary anthropology by Markus Feldman, Robert Boyd, and others four decades ago, and currently being used in several fields such as psychology (for example, to explain international variations in psychological traits) and economics (for example, to explain the evolution of institutions). After laying out the basics using theory and examples, I will review a paper by economic historian Nathan Nunn that test the basic idea of cultural evolution: social learning produces cultural traditions in societies (values, norms, institutions), which endure if uncertainty is low. Then I will introduce a formal model, and associated empirical evidence, that extends Nunn’s approach and explains the evolutionary origins of firm-like organizations of the past such as medieval guilds, Roman workshops, and Indian Srenis. This will allow us to understand why these “pre-modern firms” evolved in our past, and how cultural evolution can provide answer to “origins” questions. If time permits, I will also discuss how the formal machinery of cultural evolution can be used to understand short-run “proximate” phenomena, and I will exemplify this with a model that studies how organizational culture can help firms adapt to unforeseen changes.