The Persistence of Inferior Cultural-Institutional Conventions
Marianna Belloc, Samuel Bowles
American Economic Review · 2013 · Volume 103 · Issue 3
Abstract
Our theory of cultural-institutional persistence and innovation is based on uncoordinated updating of individual social norms and contracts, so that both culture and institutions co-evolve. We explain why Pareto-dominated cultural-institutional configurations may persist over long periods and how transitions nonetheless occur. In our model the exercise of elite power plays no role in either persistence or innovation, and transitions occur endogenously. This is unlike models in which elites impose inferior institutions or cultures as a self-interested distributional strategy. We show that persistence will be greater the more inferior is the Pareto-dominated configuration and the more rational and individualistic is the population.
Keywords
Institutions: Design, Formation, and Operations, Formal and Informal Sectors, Shadow Economy, Institutional Arrangements, Institutions and Growth, Economic Sociology, Economic Anthropology, Social and Economic Stratification
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