Working Paper: CEPR ID: DP9072
Authors: Avner Greif; Guido Tabellini
Abstract: Over the last millennium, the clan and the city have been the locus of cooperation in China and Europe respectively. This paper examines - analytically, historically, and empirically - the cultural, social, and institutional co-evolution that led to this bifurcation. We highlight that groups with which individuals identify are basic units of cooperation. Such groups impact institutional development because intra-group moral commitment reduces enforcement cost implying a comparative advantage in pursuing collective actions. Moral groups perpetuate due to positive feedbacks between morality, institutions, and the implied pattern of cooperation.
Keywords: China; Europe; Institutions; Public Goods; Values
JEL Codes: N00; O10; O50; P51; Z10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| initial distribution of moral traits (A13) | trajectory of social organization (P27) |
| limited morality in clans (Z13) | development of clans (Z13) |
| generalized morality in cities (A13) | inclination towards city-based cooperation (R11) |
| strong kinship ties in clans (Z13) | limited morality (K13) |
| limited morality (K13) | intra-clan cooperation (D70) |
| generalized morality (A13) | cooperation among diverse population (P13) |
| strong kinship ties (Z13) | clan-based societies (Z13) |
| generalized morality (A13) | urbanization (R11) |
| moral frameworks (A13) | bifurcation in cooperation mechanisms (C71) |