Working Paper: CEPR ID: DP15802
Authors: Alberto Bisin; Jared Rubin; Avner Seror; Thierry Verdier
Abstract: Recent theories of the Long Divergence between Middle Eastern and Western European economies focus on Middle Eastern (over-)reliance on religious legitimacy, use of slave soldiers, and persistence of restrictive proscriptions of religious (Islamic) law. These theories take as exogenous the cultural values that complement the prevailing institutions. As a result, they miss the role of cultural values in either supporting the persistence of or inducing change in the economic and institutional environment. In this paper, we address these issues by modeling the joint evolution of institutions and culture. In doing so, we place the various hypotheses of economic divergenceinto one, unifying framework. We highlight the role that cultural transmission plays in reinforcing institutional evolution toward either theocratic or secular states. We extend the model to shed light on political decentralization and technological changein the two regions.
Keywords: long divergence; cultural transmission; institutions; legitimacy; religion
JEL Codes: O10; P16; P48; N34; N35; Z12; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Cultural Transmission (Z13) | Institutional Change (D02) |
| Increase in Religious Individuals (Z12) | Delegation of Power to Clerics (H77) |
| Delegation of Power to Clerics (H77) | Legitimacy (K49) |
| Legitimacy (K49) | Governance (G38) |
| Political Centralization (H77) | Economic Outcomes (P47) |
| Political Centralization (H77) | Tax Revenue (H29) |
| Religious Proscriptions (Z12) | Economic Activity (R11) |
| Religious Proscriptions (Z12) | Economic Growth (O49) |