Alice Evans on Acemoglu, et al

How they added culture to their theory of institutions

Alice Evans writes,

Congratulations to Daron Acemoglu, Simon Johnson and James Robinson (AJR) for winning the Economics Nobel! This powerhouse has made a tremendous contribution, demonstrating that inclusive institutions are fundamental for long-run economic prosperity.

…“The Narrow Corridor” suggests that for liberty and prosperity to thrive and flourish, countries must have strong states and strong societies. A strong state provides the rule of law and public goods, while a strong society exerts pressure for reform, holding the Leviathan in check.

Why do countries differ so much in economic performance? AJR are known for a focus on institutions. So is Douglass North, another Nobel Laureate.¹

One objection to the focus on institutions is that culture also matters. It seems that AJR have decided to incorporate culture in their analysis. Evans points to Culture, Institutions, and Social Equilibria: A Framework, a working paper by Acemoglu and Robinson. They write,

Following Geertz, we thus define culture as patterns of beliefs, relationships, rituals, attitudes and obligations that furnish meaning to human interactions and provide a framework for interpreting the world, coordinating expectations and enabling or constraining behaviors. Critically, a culture does not typically determine a specific type of behavior. Rather, it provides a set of justifications and associated choices.

…We view culture as inseparable from a broader social equilibrium and closely interacting with political and economic power. By providing justifications to various social arrangements, culture influences economic and political institutions, but is fundamentally impacted by politics as well. Deepening our understanding of the two-way interaction between culture and institutions is one of the main objectives of our framework.

They are interested in cases of rapid, broad cultural change. For example they say that in the 16th and 17th century in England, the political culture changed from “divine right of kings” to “popular sovereignty.”

They argue that it is neither the case that culture is downstream from institutions nor that institutions are downstream from culture. Instead, the two are intertwined.

Evans writes,

Culture isn’t a fossil, it’s a fist-fight. Contending coalitions are constantly vying for ideological and institutional dominance. In the past, they primarily sought conquest. But now it’s a battle for persuasion - in which prestige reigns supreme.

And she points out,

If we recognise that charismatic and prestigious media are major drivers of ideological persuasion, we must also recognise the power of institutional censorship!

…While A&R’s “The Narrow Corridor” claims that ‘strong societies’ invariably push for liberty, I am actually sceptical. Through my globally comparative research, I recognise many bottom-up coalitions for censorship. Deeply-devoted religious believers have mobilised to entrench piety - in Malaysia, Saudia Arabia and Egypt. Competing for credibility, political leaders may then institutionalise censorship in order to prove their piety and garner wider legitimacy.

Acemoglu is probably the most-admired economist of his generation, and many economists have AJR’s books on their shelves. But Evans may be one of the few who is actively pursuing research related to their work.

This Nobel award is unusual. Typically, the award goes for a striking insight found using math or statistics, appearing in a journal article. The originality of the idea can be expressed concisely. In the case of AJR, I do not believe that one can concisely say what is original. I see their work as a synthesis, not a theorem.

I do not mean that as a criticism. (Noah Smith offers a more serious and informed critique.) Just as a warning to be wary of journalistic attempts to summarize their contribution.

substacks referenced above: @

Congratulations to Acemoglu, Johnson & Robinson!

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A Nobel for the big big questions

1. Frankly, I have found North more readable than AJR. My knowledge of AJR is second hand.