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Why do some societies fail to adopt more efficient institutions? And why do such failures often coincide with cultural movements that glorify the past? Murat Iyigun and his coauthors 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 their 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. In this Quantitative History Webinar, Murat will explain in detail how such cultural and institutional dynamics have historically generated cultural revivals that further empowered entrenched the political & economic elites.

Live on Zoom on October 8, 2020
09:00 Hong Kong/Beijing/Singapore | 10:00 Tokyo | 11:00 Sydney
[19:00 Previous day Colorado Time | 21:00 Previous day New York Time]

A new knowledge exchange platform for researchers and students in the field of Economic History. The interactive Webinars help researchers, teachers and students keep up to date with the latest research in the field. The Quantitative History Webinar Series is co-organised by the Asia Global Institute and Faculty of Business and Economics at HKU, and proudly supported by the International Society for Quantitative History.