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.

A Previously Unpublished Correspondence between Adam Smith and Joseph Nicolas de Windischgratz

MENUDO, J.M., RIEUCAU, N.

HISTORY OF POLITICAL ECONOMY

Abstract: This article transcripts and comments on two letters by Adam Smith, and two letters by his correspondent Joseph Nicolas de Windischgrätz. These letters belong to a rather rich and lengthy exchange—which would end at the beginning of 1788—composed of at least sixteen pieces. As with the rest of the correspondence between them, the letters published here refer to the prize proposed by Windischgrätz in 1784–85. The Programme of this prize was looking for general formulas that would normalize all types of property transfer. Adam Smith replied that the great diversity of human customs did not lend itself to such formulas. In spite of his reluctance Smith eventually agreed to help Windischgrätz, but the prize had no winner.

Conditional Privacy Rights

MUNGAN, MURAT C.

JOURNAL OF INSTITUTIONAL AND THEORETICAL ECONOMICS JITE, Volume 173, Issue 1

Abstract: People have subjective valuations of privacy. Thus, absent further considerations, efficiency requires that a person be afforded privacy if, and only if, his subjective valuation of privacy exceeds the social value of the information that would be disclosed through a violation of that person’s privacy. Absolute regimes that either always allow privacy, or never allow privacy, cannot achieve this result. This article shows that a conditional privacy regime can lead to efficient separation among people based on their subjective valuations of privacy. Moreover, this regime need not inefficiently distort information collection incentives or incentives to refrain from various acts that may generate collectible information.

Suffrage, labour markets and coalitions in colonial Virginia

ELENA NIKOLOVA & MILENA NIKOLOVA

EUROPEAN JOURNAL OF POLITICAL ECONOMY

Abstract: We study Virginia’s suffrage from the early-17th century until the American Revolution using an analytical narrative and econometric analysis of unique data on franchise restrictions. First, we hold that suffrage changes reflected labour market dynamics. Indeed, Virginia’s liberal institutions initially served to attract indentured servants from England who were needed in the labour-intensive tobacco farming but deteriorated once worker demand subsided and planters replaced white workers with slaves. Second, we argue that Virginia’s suffrage was also the result of political bargaining influenced by shifting societal coalitions. We show that new politically influential coalitions of freemen and then of small and large slave-holding farmers emerged in the second half of the 17th and early-18th centuries, respectively. These coalitions were instrumental in reversing the earlier democratic institution\s. Our main contribution stems from integrating the labour markets and bargaining/coalitions arguments, thus proving a novel theoretical and empirical explanation for institutional change.

Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation

DARON ACEMOGLU & PASCUAL RESTREPO

THE NATIONAL BUREAU OF ECONOMIC RESEARCH

Abstract: Several recent theories emphasize the negative effects of an aging population on economic growth, either because of the lower labor force participation and productivity of older workers or because aging will create an excess of savings over desired investment, leading to secular stagnation. We show that there is no such negative relationship in the data. If anything, countries experiencing more rapid aging have grown more in recent decades. We suggest that this counterintuitive finding might reflect the more rapid adoption of automation technologies in countries undergoing more pronounced demographic changes, and provide evidence and theoretical underpinnings for this argument.

Historical Prevalence of Infectious Diseases, Cultural Values, and the Origins of Economic Institutions

BORIS NIKOLAEV AND RAUFHON SALAHODJAEV

KYKLOS, Volume 70, Issue 1

Abstract: It is widely believed that economic institutions such as competitive markets, the banking system, and the structure of property rights are essential for economic development. But why economic institutions vary across countries and what are their deep origins is still a question that is widely debated in the developmental economics literature. In this study, we provide an empirical test for the provocative hypothesis that the prevalence of infectious diseases influenced the formation of personality traits, cultural values, and even morality at the regional level (the so called Parasite- Stress Theory of Values and Sociality), which then shaped economic institutions across countries. Using the prevalence of pathogens as an instrument for cultural traits such as individualism, we show in a two-stage least squares analysis that various economic institutions, measured by different areas of the index of Economic Freedom by the Heritage Foundation, have their deep origins in the historical prevalence of infectious diseases across countries. Our causal identification strategy suggests that cultural values affect economic institutions even after controlling for a number of confounding variables, geographic controls, and for different sub-samples of countries. We further show that the results are robust to four alternative measures of economic and political institutions.