To evaluate the relative importance of a culture of cooperation and inclusive political institutions, I divide Europe into 120Â kmĂ120Â km grid cells, and exploit the exogenous variation in both institutions created by medieval history. I document strong firstâstage relationships between presentâday norms of respect and trust and the severity of consumption riskâi.e. climate volatilityâover the period 1000â1600 and between the inclusiveness of presentâday regional political institutions and the factors that raised the returns on eliteâcitizenry investmentsâi.e. terrain ruggedness and direct access to the coast. Building on these first stages, I show that only culture has a firstâorder effect on income, even after controlling for country fixed effects, proxies for the alternative roles of the excluded instruments, factors modulating the roles of institutions, and intermediate outcomes. Two possible explanations for these results are that more inclusive regional political institutions might have impeded, in the early modern era, stateâbuilding and market integration, and that in modern representative democracies, they are irrelevant in easing the monitoring of politicians by voters when the latter are not morally compelled to punish political malfeasance or the former have weak civic virtues. Macro and micro evidence supports these ideas.