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

Avner Greif and Guido Tabellini

No 445, Working Papers from IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University

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

Date: 2012
New Economics Papers: this item is included in nep-mic, nep-soc and nep-tra
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Working Paper: The Clan and the City: Sustaining Cooperation in China and Europe (2012)
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