Thierry Verdier
PSE, Ecole des Ponts-Paris Tech



(Monday, 21st May 2018)

Title : On the Joint Evolution of Institutions and Culture

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Institutions and culture are often identified as deep factors of economic growth and prosperity. We present recent theorical models 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. The joint dynamics of culture and institutions may display interesting non-ergodic behavior, hysteresis, oscillations, and comparative dynamics. 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.