Working Paper: CEPR ID: DP6589
Authors: Guido Tabellini
Abstract: How and why does distant political and economic history shape the functioning of current institutions? This paper argues that individual values and convictions about the scope of application of norms of good conduct provide the "missing link". Evidence from a variety of sources points to two main findings. First, individual values consistent with generalized (as opposed to limited) morality are widespread in societies that were ruled by non-despotic political institutions in the distant past. Second, well functioning institutions are often observed in countries or regions where individual values are consistent with generalized morality, and under different identifying assumptions this suggests a causal effect from values to institutional outcomes. The paper ends with a discussion of the implications for future research.
Keywords: culture; growth; institutions; political economics
JEL Codes: A10; D7; E00
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Non-despotic governance history (N40) | Generalized morality (A13) |
| Generalized morality (A13) | Better institutional performance (O43) |
| Non-despotic governance history (N40) | Better institutional performance (O43) |
| Generalized morality (A13) | Cooperation (C71) |
| Generalized morality (A13) | Reduced corruption (H57) |
| Generalized morality (A13) | Enhanced law enforcement (K42) |
| Values (Y10) | Governance outcomes (H11) |
| Historical governance structures (H11) | Moral values (A13) |