Social Attitudes and Macroeconomic Performance:

In this paper we develop a new empirical approach to uncover the causal link from social attitudes to economic development. We first show that social attitudes of second-generation Americans are significantly influenced by the country of origin of their forebears. In the spirit of the epidemiology literature, we interpret this phenomenon as the consequence of a causal effect of inherited social attitudes. This leads us to use the social attitudes of second-generation Americans as an instrument for the social attitudes in the home country of their parents to identify the causal effect of inherited social attitudes on economic development. This strategy allows us to isolate the specific contribution of social attitudes relatively to other traditional candidates, such as invariant institutions or geography, by controlling for country fixed effects. We find that inherited social attitudes had a strong specific causal impact on per capita output and other measures of macroeconomic performance on a sample of 30 countries over the period 1949-2003.