The Ideological Roots of Institutional Change

Abstract

Why do some societies fail to adopt more e¢ cient 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 …t 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.

The Cultural Transmission of Trust Norms: Evidence from a Lab in the Field on a Natural Experiment

“…Finally, we turn to the cultural transmission mechanism. The most commonly accepted mechanism in the economics literature is the one proposed by Bisin and Verdier (2001), in which parents transmit their preferences to their children as a form of "parental altruism" (also see Nunn and Wantchekon 2011;Dohmen et al 2012;Giuliano and Nunn 2017;Bisin and Verdier 2017;Iyigun and Rubin 2017;Roland and Yang 2017). This type of cultural transmission is denoted as vertical transmission (i.e., from parent to child).…”

“…Bisin and Verdier (2001), Tabellini (2008b), and Guiso et al (2008) focus primarily on the intra-family transmission process, while Dohman et al (2012) highlight the role of assortative mating and the local environment. Bisin and Verdier (2017), Kimbrough et al (2008), Greif and Tadelis (2010), and Iyigun and Rubin (2017) provide arguments for how culture and institutions interact. 4 While one can run a test for pre-existing differences on either side of the discontinuity (e.g., Becker et al 2016), such data from the pre-existing period are often much worse due to their historical nature and are subject to omitted variable bias.…”

Geopolitics and Asia’s little divergence: State building in China and Japan after 1850

“…We use the model to explain (1) the political status quo in China and Japan (centralization in China and decentralization in Japan) before the mid-nineteenth century; (2) why China moved toward decentralization while Japan became politically centralized upon the arrival of Western powers; and (3) why despite considerable societal resistance to reform in both countries, ruling elites in Japan pushed forward with comprehensive reform while the Chinese leadership displayed ambivalence and was reluctant to change. While we focus on the political economy dimensions of the decision to modernize or not, our analysis complements other recent work that emphasizes the cultural and ideological determinants of the success of Meiji Japan and comparative failure of late Qing China (see, for instance, Iyigun and Rubin, 2017). Our analysis draws attention to the relative size of China and Japan in shaping their institutional responses to the threats that they faced in the late nineteenth century.…”

A Theory of Conservative Revivals

“…12 Conservative revivals need not be associated with solely religious elites, however. Iyigun and Rubin (2017) cite three cases of macro-level "conservative revivals" in the 17th-century Ottoman Empire, 19thcentury Imperial China, and 18th-19th century Tokugawa Japan. Only in the first of these cases were religious elites important in facilitating the conservative revival.…”