NES Center for the Study of Diversity and Social Interactions and HSE International Center for the Study of Institutions and Development are happy to invite you to our joint meeting of the Research Seminar on Diversity and Development and HSE Seminar on Political Economy.

Aleksandr Demin (New York University) will present the paper "Why Does Persistence Happen (and Not)? A Model of Institutions and Culture in Long-Run Economic Development". 

Registration till noon of January 21st.

Abstract:

Recent studies have convincingly shown that history matters for long-run development through various mechanisms whenever it is observed. What are the conditions for a decision to have persistent effects? I develop a theory of how formal political institutions and cultural transmission contribute to long-run effects. In the model, citizens select contributions to private and public goods, while the political elite decides on the expropriation and enforcement of public goods provision. The game is played in two periods with a stochastic social transformation occurring in between. First, the model shows how initially weak institutions contribute to the negative developmental effects. Second, the conditions for the persistence of cooperation on public goods with imperfect information are characterized. Importantly, transmission of beliefs works together with enforcing institutions, sustaining each other.