Are individualistic societies less equal? Evidence from the parasite stress theory of values

BORIS NIKOLAEV

JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION, Volume 138

Abstract: It is widely believed that individualistic societies, which emphasize personal freedom, award social status for accomplishment, and favor minimal government intervention, are more prone to higher levels of income inequality compared to more collectivist societies, which value conformity, loyalty, and tradition and favor more interventionist policies. The results in this paper, however, challenge this conventional view. Drawing on a rich literature in biology and evolutionary psychology, we test the provocative Parasite Stress Theory of Values, which suggests a possible link between the historical prevalence of infectious diseases, the cultural dimension of individualism–collectivism and differences in income inequality across countries. Specifically, in a two-stage least squares analysis, we use the historical prevalence of infectious diseases as an instrument for individualistic values, which, in the next stage, predict the level of income inequality, measured by the net GINI coefficient from the Standardized World Income Inequality Database (SWIID). Our findings suggest that societies with more individualistic values have significantly lower net income inequality. The results are robust even after controlling for a number of confounding factors such as economic development, legal origins, religion, human capital, other cultural values, economic institutions, and geographical controls.

Federalism, Devolution, and Liberty

LUKE PHILIP PLOTICA

AMERICAN POLITICAL THOUGHT, Volume 6, Number 1

Abstract: For much of the twentieth century the landscape of American federalism was characterized by accumulation of power by the national government. In recent decades influential political and legal thinkers have called for devolution of governmental power to the states and localities, where, they argue, such powers properly belong and are more effectively exercised. One of the recurrent argumentative tropes in the devolutionary literature maintains that devolution is more desirable than centralization because it better protects and enhances individual liberty, and not merely the sovereignty of the states. The project of this essay is to challenge this alleged linkage by examining four of its most common and compelling manifestations. Utilizing Isaiah Berlin’s distinction between negative and positive liberty, the essay offers critical analysis of claims that devolution serves individual liberty by (1) facilitating policy experimentation, (2) spurring interjurisdictional competition, (3) promoting local self-government, and (4) enforcing the limits of governmental power.

North and south: long-run social mobility in England and attitudes toward welfare

NINA BOBERG-FAZLIĆ & PAUL SHARP

CLIOMETRICA

Abstract: In this paper, we examine the long-run social mobility experience in England. We present evidence for surprisingly constant levels of social mobility over the period 1550–1749, despite huge structural changes. Examining regional differences, we show that the North of England exhibited higher rates of social mobility than the South. We link this to the hypothesis that historically high levels of social mobility can lead to a culture of non-acceptance of redistribution and welfare provision. Taking advantage of the fact that welfare provision was determined at the local level at the time, we are able to compare social mobility rates and welfare spending within a single country. Consistent with the hypothesis, we find evidence for historically higher levels of social mobility as well as lower welfare spending and less acceptance of redistribution in the North.

Bowling for Fascism: Social Capital and the Rise of the Nazi Party

SHANKER SATYANATH

JOURNAL OF POLITICAL ECONOMY

Abstract: Using newly collected data on association density in 229 towns and cities in interwar Germany, we show that denser social networks were associated with faster entry into the Nazi Party. The effect is large: one standard deviation higher association density is associated with at least 15 percent faster Nazi Party entry. Party membership, in turn, predicts electoral success. Social networks thus aided the rise of the Nazis that destroyed Germany’s first democracy. The effects of social capital depended on the political context: in federal states with more stable governments, higher association density was not correlated with faster Nazi Party entry.

1688 and all that: property rights, the Glorious Revolution and the rise of British capitalism

GEOFFREY M. HODGSON

JOURNAL OF INSTITUTIONAL ECONOMICS, Volume 13, Issue 1

Abstract: In a seminal 1989 article, Douglass North and Barry Weingast argued that by making the monarch more answerable to Parliament, the Glorious Revolution of 1688 helped to secure property rights in England and stimulate the rise of capitalism. Similarly, Daron Acemoglu, Simon Johnson, and James Robinson later wrote that in the English Middle Ages there was a ‘lack of property rights for landowners, merchants and proto-industrialists’ and the ‘strengthening’ of property rights in the late 17th century ‘spurred a process of financial and commercial expansion’. There are several problems with these arguments. Property rights in England were relatively secure from the 13th century. A major developmental problem was not the security of rights but their feudal nature, including widespread ‘entails’ and ‘strict settlements’. 1688 had no obvious direct effect on property rights. Given these criticisms, what changes promoted the rise of capitalism? A more plausible answer is found by addressing the post-1688 Financial and Administrative Revolutions, which were pressured by the enhanced needs of war and Britain’s expanding global role. Guided by a more powerful Parliament, this new financial system stimulated reforms to landed property rights, the growth of collateralizable property and saleable debt, and thus enabled the Industrial Revolution.

Cognitive rules, institutions, and economic growth: Douglass North and beyond

AVNER GREIF &  JOEL MOKYR

JOURNAL OF INSTITUTIONAL ECONOMICS, Volume 13, Issue 1

Abstract:  Douglass North’s writing on institutional change recognized from the very start that such change depends on cognition and beliefs. Yet, although he focused on individual beliefs, we argue in this paper that such beliefs are social constructs. We suggest that institutions – rules, expectations, and norms – are based on shared cognitive rules. Cognitive rules are social constructs that convey information that distills and summarizes society’s beliefs and experience. These rules have to be self-enforcing and self-confirming, but they do not have to be ‘correct’. We describe the characteristics of such rules in the context of a market for ideas, and illustrate their importance in two developments central to the growth of modern economies: the rise of the modern state with its legitimacy based on consent, and the rise of modern science-based technology that was the product of the scientific revolution and the Enlightenment.

Micro foundations in the Great Divergence debate: opening up a new perspective

LUCA ZAN

HISTORY AND PHILOSOPHY OF ECONOMICS

Abstract: Prevailing approaches in historical studies adopt a macro view and place an overwhelming emphasis on the Industrial Revolution as a major discontinuity in Western development. On the contrary, recent research in accounting, management and business history has suggested a different direction. When opting for a micro-level focus, crucial discontinuities in management and accounting in the West can be traced back to the Renaissance Period. The paper thus searches for ‘micro foundations’ in managing and accounting practices to address the on-going debate on the East-West divergence. Despite the obvious problems with source availability, we outline a new research agenda for the debate.