Culture and the Historical Process

Abstract

This article discusses the importance of accounting for cultural values and beliefs when studying the process of historical economic development. A notion of culture as heuristics or rules of thumb that aid in decision making is described. Because cultural traits evolve based upon relative fitness, historical shocks can have persistent effects if they alter the costs and benefits of different traits. A number of empirical studies confirm that culture is an important mechanism that helps explain why historical shocks can have persistent impacts; these are reviewed here. As an example, I discuss the colonial origins hypothesis (Acemoglu, Johnson, and Robinson 2001), and show that our understanding of the transplantation of European legal and political institutions during the colonial period remains incomplete unless the values and beliefs brought by European settlers are taken into account. It is these cultural beliefs that formed the foundation of the initial institutions that in turn were key for long-term economic development.

Keywords:

• culture
• behavioral norms
• historical persistence
• institutions

JEL classification:

• B52
• N00

Notes

¹Department of Economics, Harvard University, 1805 Cambridge Street, Room M29, Cambridge, MA 02138, USA. Website: http://www.economics.harvard.edu/faculty/nunn. Email: [email protected]

²One can also model the speed of cultural change. Boyd and Richerson (2005) show that, from one generation to the next, culture is less likely to change when the environment is more stable and learning more costly.

³This evidence is summarised in Section 3.

⁴There is an extensive literature in psychology documenting cultural and cognitive differences between Westerners and East Asians. See chapter 8 of Heine 2012 for a summary.

⁵An interesting contrast between the findings of Madestam and Yanagizawa-Drott (2011) and Giuliano and Spilimbergo (2009) is the years in which the events being examined are found to have the greatest impacts. Giuliano and Spilimbergo find 18–25 to be the most important years, while Madestam and Yanagizawa-Drott find 7–10 to be the most important for political views, and 15–18 for political participation.

⁶The notion that domestic institutions affect cultural norms is not surprising in light of the overwhelming evidence that material payoffs affect preferences and values (since institutions are an important determinant of material payoffs). Bowles and Polania-Reyes (2012) summarise the mounting evidence for this effect.