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The Clan and the Corporation: Sustaining Cooperation in China and Europe

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  • Avner Greif
  • Guido Tabellini

Abstract

Over the last millennium, the clan and the corporation have been the loci of cooperation in China and Europe respectively. This paper examines - analytically and historically - the cultural and institutional co-evolution that led to this bifurcation. We highlight that groups with which individuals identify are basic units of cooperation. Such loyalty groups influence institutional development because intra-group moral commitment reduces enforcement cost implying a comparative advantage in pursuing collective actions. Loyalty groups perpetuate due to positive feedbacks between morality, institutions, and the implied pattern of cooperation.

Suggested Citation

  • Avner Greif & Guido Tabellini, 2015. "The Clan and the Corporation: Sustaining Cooperation in China and Europe," CESifo Working Paper Series 5233, CESifo.
  • Handle: RePEc:ces:ceswps:_5233
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    JEL classification:

    • N00 - Economic History - - General - - - General
    • A10 - General Economics and Teaching - - General Economics - - - General

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