IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp10703.html
   My bibliography  Save this paper

The Ideological Roots of Institutional Change

Author

Listed:
  • Iyigun, Murat

    (University of Colorado, Boulder)

  • Rubin, Jared

    (Chapman University)

Abstract

Why do some societies fail to adopt more efficient institutions in response to changing economic conditions? And why do such conditions sometimes generate ideological backlashes and at other times lead to transformative sociopolitical movements? We propose an explanation that highlights the interplay – or lack thereof – between new technologies, ideologies, and institutions. When new technologies emerge, uncertainty results from a lack of understanding how the technology will fit with prevailing ideologies and institutions. This uncertainty discourages investment in institutions and the cultural capital necessary to take advantage of new technologies. Accordingly, increased uncertainty during times of rapid technological change may generate an ideological backlash that puts a higher premium on traditional values. We apply the theory to numerous historical episodes, including Ottoman reform initiatives, the Japanese Tokugawa reforms and Meiji Restoration, and the Tongzhi Restoration in Qing China.

Suggested Citation

  • Iyigun, Murat & Rubin, Jared, 2017. "The Ideological Roots of Institutional Change," IZA Discussion Papers 10703, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp10703
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp10703.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jha, Saumitra, 2013. "Trade, Institutions, and Ethnic Tolerance: Evidence from South Asia," American Political Science Review, Cambridge University Press, vol. 107(4), pages 806-832, November.
    2. Enrico Spolaore & Romain Wacziarg, 2013. "How Deep Are the Roots of Economic Development?," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 325-369, June.
    3. Buggle, Johannes C., 2016. "Law and social capital: Evidence from the Code Napoleon in Germany," European Economic Review, Elsevier, vol. 87(C), pages 148-175.
    4. Alberto Alesina & Paola Giuliano & Nathan Nunn, 2013. "On the Origins of Gender Roles: Women and the Plough," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(2), pages 469-530.
    5. Paola Giuliano, 2007. "Living Arrangements in Western Europe: Does Cultural Origin Matter?," Journal of the European Economic Association, MIT Press, vol. 5(5), pages 927-952, September.
    6. Boris Gershman, 2016. "Long-Run Development and the New Cultural Economics," Working Papers 2016-06, American University, Department of Economics.
    7. Ma, Debin, 2004. "Why Japan, Not China, Was the First to Develop in East Asia: Lessons from Sericulture, 1850-1937," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 369-394, January.
    8. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2007. "Social Capital as Good Culture," NBER Working Papers 13712, National Bureau of Economic Research, Inc.
    9. Nico Voigtländer & Hans-Joachim Voth, 2012. "Persecution Perpetuated: The Medieval Origins of Anti-Semitic Violence in Nazi Germany," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(3), pages 1339-1392.
    10. Nathan Nunn, 2012. "Culture and the Historical Process," Economic History of Developing Regions, Taylor & Francis Journals, vol. 27(S1), pages 108-126.
    11. Yuriy Gorodnichenko & Gerard Roland, 2017. "Culture, Institutions, and the Wealth of Nations," The Review of Economics and Statistics, MIT Press, vol. 99(3), pages 402-416, July.
    12. Jared Rubin, 2011. "Institutions, the Rise of Commerce and the Persistence of Laws: Interest Restrictions in Islam and Christianity," Economic Journal, Royal Economic Society, vol. 121(557), pages 1310-1339, December.
    13. Guido Tabellini, 2010. "Culture and Institutions: Economic Development in the Regions of Europe," Journal of the European Economic Association, European Economic Association, vol. 8(4), pages 677-716, June.
    14. Davide Cantoni & Yuyu Chen & David Y. Yang & Noam Yuchtman & Y. Jane Zhang, 2017. "Curriculum and Ideology," Journal of Political Economy, University of Chicago Press, vol. 125(2), pages 338-392.
    15. John R. Lott, Jr., 1999. "Public Schooling, Indoctrination, and Totalitarianism," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 127-157, December.
    16. North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(4), pages 803-832, December.
    17. Coşgel, Metin M. & Miceli, Thomas J. & Rubin, Jared, 2012. "The political economy of mass printing: Legitimacy and technological change in the Ottoman Empire," Journal of Comparative Economics, Elsevier, vol. 40(3), pages 357-371.
    18. Acemoglu, Daron & Robinson, James A., 2006. "Economic Backwardness in Political Perspective," American Political Science Review, Cambridge University Press, vol. 100(1), pages 115-131, February.
    19. Coşgel, Metin M. & Miceli, Thomas J., 2005. "Risk, Transaction Costs, and Tax Assignment: Government Finance in the Ottoman Empire," The Journal of Economic History, Cambridge University Press, vol. 65(3), pages 806-821, September.
    20. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-950, October.
    21. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins of Technology-Skill Complementarity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 693-732.
    22. Balla, Eliana & Johnson, Noel D., 2009. "Fiscal Crisis and Institutional Change in the Ottoman Empire and France," The Journal of Economic History, Cambridge University Press, vol. 69(3), pages 809-845, September.
    23. Bisin, Alberto & Verdier, Thierry, 2001. "The Economics of Cultural Transmission and the Dynamics of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 298-319, April.
    24. Sascha O. Becker & Katrin Boeckh & Christa Hainz & Ludger Woessmann, 2016. "The Empire Is Dead, Long Live the Empire! Long‐Run Persistence of Trust and Corruption in the Bureaucracy," Economic Journal, Royal Economic Society, vol. 126(590), pages 40-74, February.
    25. Irena Grosfeld & Alexander Rodnyansky & Ekaterina Zhuravskaya, 2013. "Persistent Antimarket Culture: A Legacy of the Pale of Settlement after the Holocaust," American Economic Journal: Economic Policy, American Economic Association, vol. 5(3), pages 189-226, August.
    26. Nathan Nunn & Raul Sanchez de la Sierra, 2017. "Why Being Wrong Can Be Right: Magical Warfare Technologies and the Persistence of False Beliefs," American Economic Review, American Economic Association, vol. 107(5), pages 582-587, May.
    27. Alberto Alesina & Paola Giuliano, 2015. "Culture and Institutions," Journal of Economic Literature, American Economic Association, vol. 53(4), pages 898-944, December.
    28. Iyigun, Murat, 2015. "War, Peace, and Prosperity in the Name of God," University of Chicago Press Economics Books, University of Chicago Press, number 9780226388434, December.
    29. James A. Robinson & Daron Acemoglu, 2000. "Political Losers as a Barrier to Economic Development," American Economic Review, American Economic Association, vol. 90(2), pages 126-130, May.
    30. Ma, Debin & Rubin, Jared, 2017. "The Paradox of Power: Understanding Fiscal Capacity in Imperial China and Absolutist Regimes," CAGE Online Working Paper Series 320, Competitive Advantage in the Global Economy (CAGE).
    31. Yann Algan & Pierre Cahuc, 2013. "Trust and Growth," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 521-549, May.
    32. Greif,Avner, 2006. "Institutions and the Path to the Modern Economy," Cambridge Books, Cambridge University Press, number 9780521671347, September.
    33. Rubin,Jared, 2017. "Rulers, Religion, and Riches," Cambridge Books, Cambridge University Press, number 9781107036819, January.
    34. Azam Chaudhry & Phillip Garner, 2006. "Political Competition Between Countries and Economic Growth," Review of Development Economics, Wiley Blackwell, vol. 10(4), pages 666-682, November.
    35. Jha, Saumitra, 2008. "Trade, Institutions and Religious Tolerance: Evidence from India," Research Papers 2004, Stanford University, Graduate School of Business.
    36. Pamuk, Sevket, 2004. "The evolution of financial institutions in the Ottoman Empire, 1600 1914," Financial History Review, Cambridge University Press, vol. 11(01), pages 7-32, April.
    37. Yuriy Gorodnichenko & Gerard Roland, 2011. "Which Dimensions of Culture Matter for Long-Run Growth?," American Economic Review, American Economic Association, vol. 101(3), pages 492-498, May.
    38. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2008. "Alfred Marshall Lecture Social Capital as Good Culture," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 295-320, 04-05.
    39. Brown, Shannon R., 1979. "The Transfer of Technology to China in the Nineteenth Century: The Role of Direct Foreign Investment," The Journal of Economic History, Cambridge University Press, vol. 39(1), pages 181-197, March.
    40. Guido Tabellini, 2008. "Presidential Address Institutions and Culture," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 255-294, 04-05.
    41. Karaman, K. Kivanç & Pamuk, Şevket, 2013. "Different Paths to the Modern State in Europe: The Interaction Between Warfare, Economic Structure, and Political Regime," American Political Science Review, Cambridge University Press, vol. 107(3), pages 603-626, August.
    42. Karaja, Elira & Rubin, Jared, 2022. "Θ The cultural transmission of trust norms: Evidence from a lab in the field on a natural experiment," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 1-19.
    43. Nathan Nunn & Leonard Wantchekon, 2011. "The Slave Trade and the Origins of Mistrust in Africa," American Economic Review, American Economic Association, vol. 101(7), pages 3221-3252, December.
    44. Karaman, K. Kivanç & Pamuk, Şevket, 2010. "Ottoman State Finances in European Perspective, 1500–1914," The Journal of Economic History, Cambridge University Press, vol. 70(3), pages 593-629, September.
    45. Timur Kuran, 2011. "The Long Divergence: How Islamic Law Held Back the Middle East," Economics Books, Princeton University Press, edition 1, number 9273.
    46. Dincecco, Mark, 2009. "Fiscal Centralization, Limited Government, and Public Revenues in Europe, 1650–1913," The Journal of Economic History, Cambridge University Press, vol. 69(1), pages 48-103, March.
    47. Lott, John R, Jr, 1990. "An Explanation for Public Provision of Schooling: The Importance of Indoctrination," Journal of Law and Economics, University of Chicago Press, vol. 33(1), pages 199-231, April.
    48. Sara Lowes & Nathan Nunn & James A. Robinson & Jonathan L. Weigel, 2017. "The Evolution of Culture and Institutions: Evidence From the Kuba Kingdom," Econometrica, Econometric Society, vol. 85, pages 1065-1091, July.
    49. Davide Cantoni & Yuyu Chen & David Y. Yang & Noam Yuchtman & Y. Jane Zhang, 2017. "Curriculum and Ideology," Journal of Political Economy, University of Chicago Press, vol. 125(2), pages 338-392.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Karaja, Elira & Rubin, Jared, 2022. "Θ The cultural transmission of trust norms: Evidence from a lab in the field on a natural experiment," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 1-19.
    2. Iyigun, Murat & Rubin, Jared & Seror, Avner, 2021. "A theory of cultural revivals," European Economic Review, Elsevier, vol. 135(C).
    3. Paola Giuliano & Nathan Nunn, 2021. "Understanding Cultural Persistence and Change [Cultural Assimilation During the Age of Mass Migration]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(4), pages 1541-1581.
    4. Koyama, Mark & Moriguchi, Chiaki & Sng, Tuan-Hwee, 2018. "Geopolitics and Asia’s little divergence: State building in China and Japan after 1850," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 178-204.
    5. Ma, Debin, 2021. "Ideology and the Contours of Economic Changes in Modern China during 1850-1950," CEPR Discussion Papers 15835, C.E.P.R. Discussion Papers.
    6. Paola Giuliano & Nathan Nunn, 2021. "Understanding Cultural Persistence and Change [Cultural Assimilation During the Age of Mass Migration]," Review of Economic Studies, Oxford University Press, vol. 88(4), pages 1541-1581.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Karaja, Elira & Rubin, Jared, 2022. "Θ The cultural transmission of trust norms: Evidence from a lab in the field on a natural experiment," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 1-19.
    2. Chaudhary, Latika & Rubin, Jared & Iyer, Sriya & Shrivastava, Anand, 2020. "Culture and colonial legacy: Evidence from public goods games," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 107-129.
    3. Johnson, Noel D. & Koyama, Mark, 2017. "States and economic growth: Capacity and constraints," Explorations in Economic History, Elsevier, vol. 64(C), pages 1-20.
    4. Iyigun, Murat & Rubin, Jared & Seror, Avner, 2021. "A theory of cultural revivals," European Economic Review, Elsevier, vol. 135(C).
    5. Melissa Dell & Nathan Lane & Pablo Querubin, 2018. "The Historical State, Local Collective Action, and Economic Development in Vietnam," Econometrica, Econometric Society, vol. 86(6), pages 2083-2121, November.
    6. Boris Gershman, 2016. "Long-Run Development and the New Cultural Economics," Working Papers 2016-06, American University, Department of Economics.
    7. Guiso, Luigi & Herrera, Helios & Morelli, Massimo, 2016. "Cultural Differences and Institutional Integration," Journal of International Economics, Elsevier, vol. 99(S1), pages 97-113.
    8. Maseland, Robbert, 2021. "Contingent determinants," Journal of Development Economics, Elsevier, vol. 151(C).
    9. Hoang-Anh Ho & Peter Martinsson & Ola Olsson, 2022. "The origins of cultural divergence: evidence from Vietnam," Journal of Economic Growth, Springer, vol. 27(1), pages 45-89, March.
    10. Vincenzo Galasso & Paola Profeta, 2013. "From Family Culture to Welfare State Design," CHILD Working Papers Series 14, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    11. Touré, Nouhoum, 2021. "Culture, institutions and the industrialization process," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 481-503.
    12. Melissa Dell & Benjamin A Olken, 2020. "The Development Effects of the Extractive Colonial Economy: The Dutch Cultivation System in Java," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(1), pages 164-203.
    13. Luigi Guiso & Helios Herrera & Massimo Morelli, 2013. "A Cultural Clash View of the EU Crisis," EIEF Working Papers Series 1321, Einaudi Institute for Economics and Finance (EIEF), revised Jul 2013.
    14. Samuel Bazzi & Martin Fiszbein & Mesay Gebresilasse, 2017. "Frontier Culture: The Roots and Persistence of “Rugged Individualism†in the United States," Boston University - Department of Economics - Working Papers Series WP2018-004, Boston University - Department of Economics.
    15. Anna Gunnthorsdottir & Douglas A. Norton, 2018. "Introduction to Experimental Economics and Culture," Research in Experimental Economics, in: Experimental Economics and Culture, volume 20, pages 1-24, Emerald Group Publishing Limited.
    16. Alberto Bisin & Jared Rubin & Avner Seror & Thierry Verdier, 2021. "Culture, Institutions & the Long Divergence," NBER Working Papers 28488, National Bureau of Economic Research, Inc.
    17. Iyigun, Murat & Rubin, Jared & Seror, Avner, 2018. "A Theory of Conservative Revivals," IZA Discussion Papers 11954, Institute of Labor Economics (IZA).
    18. Becker, Sascha O. & Rubin, Jared & Woessmann, Ludger, 2020. "Religion in Economic History: A Survey," CEPR Discussion Papers 14894, C.E.P.R. Discussion Papers.
    19. Algan, Yann & Cahuc, Pierre, 2014. "Trust, Growth, and Well-Being: New Evidence and Policy Implications," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 2, pages 49-120, Elsevier.
    20. Alberto Alesina & Paola Giuliano, 2015. "Culture and Institutions," Journal of Economic Literature, American Economic Association, vol. 53(4), pages 898-944, December.

    More about this item

    Keywords

    ideology; institutions; conservatism; beliefs; uncertainty; institutional change; technological change;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • Z10 - Other Special Topics - - Cultural Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp10703. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.