Working Paper: NBER ID: w28488
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 divergence into 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 change in the two regions.
Keywords: Culture; Institutions; Economic Divergence; Middle East; Western Europe
JEL Codes: N34; N35; O10; O33; P16; P48
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| joint evolution of institutions and cultural values (O43) | economic trajectories of the Middle East and Western Europe (O53) |
| legitimacy derived from religious authorities (Z12) | rulers' decisions to delegate power (D73) |
| rulers' decisions to delegate power (D73) | economic outcomes (F61) |
| rulers' decisions to delegate power (D73) | clerics' political power (Z12) |
| clerics' political power (Z12) | cultural values transmitted within society (Z13) |
| presence of religious proscriptions (Z12) | dampening economic activity (F69) |
| political incentives for rulers to maintain religious legitimacy (Z12) | entrenching religious proscriptions (Z12) |
| centralization of political power (H77) | interaction with cultural and institutional dynamics (F55) |
| interaction with cultural and institutional dynamics (F55) | long-term economic and political outcomes (P27) |