Skip to main content Accessibility help
×
Home

When Order Affects Performance: Culture, Behavioral Spillovers, and Institutional Path Dependence

  • JENNA BEDNAR (a1) and SCOTT E. PAGE (a1)

Abstract

Evidence suggests that the cultural context influences the performance of laws, policies, and political institutions. Descriptive accounts reveal that outcomes and behaviors often depend on the array of historical institutions. This article presents a multi-institutional framework that can account for those findings through path-dependent behavioral spillovers. Individuals learn equilibrium behaviors when interacting in a new institutional setting. Initially, some individuals choose behaviors that align with their behaviors in similar extant institutions, creating a cultural context that can lead to inefficient outcomes. The article shows how avoiding path dependence requires sequencing (or designing) institutions to maintain behavioral diversity. Optimal sequencing thus requires positioning institutions with clear incentives early in the sequence as well as avoiding strong punishments that can stifle attempts to break established behavioral patterns.

Copyright

Corresponding author

Jenna Bednar is a Professor of Political Science, University of Michigan, 5700 Haven Hall, Ann Arbor, MI 48109 and a member of the External Faculty, Santa Fe Institute, 1399 Hyde Park Rd, Santa Fe, NM 87501 (jbednar@umich.edu).
Scott E. Page is the Leonid Hurwicz Collegiate Professor of Complex Systems, Political Science, and Economics, University of Michigan, 1085 S University Ave, Ann Arbor, MI 48109 and External Faculty, Santa Fe Institute, 1399 Hyde Park Rd, Santa Fe, NM 87501 (scottepage@gmail.com).

Footnotes

Hide All

The authors gratefully acknowledge the hospitality of INSEAD during a sabbatical leave; suggestions from David Laitin, Tim van Zandt, and Jenna’s graduate student seminar in Institutional Analysis; audience members at the Priorat Conference on Political Institutions, INSEAD, Hamburg University, University of Pennsylvania, the Université de Génève, ETH-Zurich, the University of Michigan, the IMF, the Santa Fe Institute, Princeton University, UCLA, and the London School of Economics, as well as research support from the U.S. Army Research Laboratory and the U.S. Army Research Office under Contract/Grant No. W911NF1010379.

Footnotes

References

Hide All
Acemoglu, Daron, and Jackson, Matthew O.. 2014. “History, Expectations, and Leadership in the Evolution of Social Norms.” Review of Economic Studies 82 (2): 423–56.
Acemoglu, Daron, Johnson, Simon, and Robinson, James A.. 2001. “The Colonial Origins of Comparative Development: An Empirical Investigation.” American Economic Review 91 (5): 1369–401.
Acemoglu, Daron, and Robinson, James A.. 2005. Economic Origins of Dictatorship and Democracy New York: Cambridge University Press.
Alesina, Alberto, and Giuliano, Paola. 2015. “Culture and Institutions.” Journal of Economic Literature 53 (4): 898944.
Ang, Yuen Yuen. 2016. How China Escaped the Poverty Trap. Ithaca, NY: Cornell University Press.
Aoki, Masahiko. 1994. “The Contingent Governance of Teams: Analysis of Institutional Complementarity.” International Economic Review 35 (3): 657–76.
Aoki, Masahiko. 2001. Toward a Comparative Institutional Analysis. Cambridge, MA: MIT Press.
Aoki, Masahiko. 2007. “Endogenizing Institutions and Institutional Changes.” Journal of Institutional Economics 3 (1): 131.
Axelrod, Robert. 1997. “The Dissemination of Culture: A Model with Local Convergence and Global Polarization.Journal of Conflict Resolution 41: 203–26.
Bednar, Jenna. 2009. The Robust Federation: Principles of Design. New York: Cambridge University Press.
Bednar, Jenna, Chen, Yan, Liu, Xiao, and Page, Scott E.. 2012. “Behavioral Spillovers and Cognitive Load in Multiple Games: An Experimental Study.” Games and Economic Behavior 74 (1): 1231.
Bednar, Jenna, Jones-Rooy, Andrea, and Page, Scott E.. 2015. “Choosing a Future Based on the Past: Institutions, Behavior, and Path Dependence.” European Journal of Political Economy 40 (B): 312–22.
Bednar, Jenna, and Page, Scott E.. 2007. “Can Game(s) Theory Explain Culture? The Emergence of Cultural Behavior Within Multiple Games.” Rationality and Society 19 (1): 6597.
Berman, Sheri. 2007. “The Vain Hope for ‘Correct’ Timing.” Journal of Democracy 18 (3): 14–7.
Boeker, Warren. 1989. “Strategic Change: The Effects Of Founding And History.” Academy of Management Journal 32 (3): 489515.
Boix, Carles. 2003. Democracy and Redistribution. Cambridge, UK: Cambridge University Press.
Boyd, Robert and Richerson, Pete. 2005. The Origin and Evolution of Cultures. Oxford, UK: Oxford University Press.
Brady, Henry E., and Collier, David. 2004. Rethinking Social Inquiry: Diverse Tools, Shared Standards. Lanham, MD: Rowman & Littlefield.
Camerer, Colin. 2003. Behavioral Game Theory: Experiments on Strategic Interaction. Princeton, NJ: Princeton University Press.
Carothers, Thomas. 2007. “The ‘Sequencing’ Fallacy.” Journal of Democracy 18 (1): 1227.
Cason, Tim, Savikhin, Anya, and Sheremeta, Roman. 2012. “Behavioral Spillovers in Coordination Games.European Economic Review 56: 233–45.
Cooper, Russell W. 1999. Coordination Games: Complementaries and Macroeconomics. New York: Cambridge University Press.
Dewatripont, Mathias, and Roland, Gérard. 1992. “The Virtues of Gradualism and Legitimacy in the Transition to a Market Economy.” The Economic Journal 102 (411): 291300.
Easterly, William 2006. The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. New York: Penguin.
Ellison, Glenn. 1993. “Learning, Local Interaction, and Coordination.” Econometrica 61 (5): 1047–71.
Falleti, Tulia G., and Lynch, Julia F.. 2009. “Context and Causal Mechanisms in Political Science.” Comparative Political Studies 42 (9): 1143–66.
Finnemore, Martha, and Sikkink, Kathryn. 1998. “International Norm Dynamics and Political Change.” International Organizations 52 (4): 887917.
Gelly, Sylvain, Schoenauer, Marc, Sebag, Michle, Teytaud, Olivier, Kocsis, Levente, Silver, David, and Szepesvri, Csaba. 2012. “The Grand Challenge of Computer Go: Monte Carlo Tree Search and Extensions.” Communications of the ACM 55 (3): 106–13.
Gilboa, Itzhak, and Schmeidler, David. 1995. “Case-based Decision Theory.” Quarterly Journal of Economics 110 (3): 605–39.
Gorodnichenko, Yuriy, and Roland, Gerard. 2016. “Culture, Institutions, and the Wealth of Nations.” Review of Economics and Statistics, forthcoming.
Greif, Avner. 1994. “Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies.” Journal of Political Economy 102 (5): 912–50.
Greif, Avner. 2006. Institutions and the Path to the Modern Economy. Cambridge, UK: Cambridge University Press.
Greif, Avner, and Laitin, David D.. 2004. “A Theory of Endogenous Institutional Change.” American Political Science Review 98 (4): 633–52.
Guinnane, Timothy. 1994A Failed Institutional Transplant: Raiffeisen’s Credit Cooperatives in Ireland, 1894–1914.” Explorations in Economic History 31 (1): 120.
Guiso, Luigi, Sapienza, Paola, and Zingales, Luigi. 2006. “Does Culture Affect Economic Outcomes?Journal of Economic Perspectives 20 (2): 2348.
Henrich, Joseph, Boyd, Robert, Bowles, Samuel, et al. 2001. “In Search of Homo Economicus: Behavioral Experiments in 15 Small-Scale Societies.” The American Economic Review, Papers and Proceedings of the Hundred Thirteenth Annual Meeting of the American Economic 19 (2): 73–8.
Henrich, Joseph, Boyd, Robert, Bowles, Samuel, Gintis, Herbert, Fehr, Ernst, and Camerer, Colin, eds. 2004. Foundations of Human Sociality: Economic Experiments and Ethnographic Evidence in Fifteen Small-Scale Societies. Oxford, UK: Oxford University Press.
Huntington, Samuel P. 1968. Political Order in Changing Societies. New Haven, CT: Yale University Press.
Inglehart, Ronald. 1977. The Silent Revolution: Changing Values and Political Styles. Princeton, NJ: Princeton University Press.
Jehiel, Philippe. 2005. “Analogy-based Expectation Equilibrium.” Journal of Economic Theory 123 (2): 81104.
Johnson, James. 2014. “Models Among the Political Theorists.” American Journal of Political Science 58 (3): 547–60.
Kandori, Michihiro, Mailath, George J., and Rob, Rafael. 1993. “Learning, Mutation, and Long Run Equilibria in Games.” Econometrica 61 (1): 2956.
Klemm, Konstatin, Eguluz, Victor M., Toral, Raul, and Miguel, Maxi San. 2003. “Global culture: A noise-induced transition in finite systems.” Physical Review E 67 (4): 045101–5.
Knight, Jack, and Johnson, James. 2011. The Priority of Democracy: The Political Consequences of Pragmatism. Princeton, NJ: Princeton University Press.
Lake, David. 2010. “The Practice and Theory of US Statebuilding.” Journal of Intervention and Statebuilding 4 (3): 257–84.
Linz, Juan J., and Stepan, Alfred, 1992. “Political Identities and Electoral Sequences: Spain, the Soviet Union, and Yugoslavia.” Daedalus 121: 123–39.
Linz, Juan J., and Stepan, Alfred, 1996. Problems of Democratic Transition and Consolidation: Southern Europe, South America, and Post-Communist Europe. Baltimore, MD: Johns Hopkins University Press.
Lipset, Seymour Martin. 1959. “Some Social Requisites of Democracy: Economic Development and Political Legitimacy.” American Political Science Review 53 (1): 69105.
Lipton, David, and Sachs, Jeffrey. 1990. “Creating a Market Economy in Eastern Europe: The Case of Poland.” Brookings Papers on Economic Activity 1990 (1): 75133.
Long, Norton E. 1958. “The Local Community as an Ecology of Games.” American Journal of Sociology 64 (3): 251–61.
Lubell, Mark. 2013. “Governing Institutional Complexity: The Ecology of Games Framework.” Policy Studies Journal 41 (3): 537–59.
Luebbert, Gregory. 1991. Liberalism, Fascism, or Social Democracy: Social Classes and the Political Origins of Regimes in Interwar Europe. New York: Oxford University Press.
Mahoney, James. 2001. “Beyond Correlational Analysis: Recent Innovations in Theory and Method.” Sociological Forum 16 (3): 575–93.
Mahoney, James, and Thelen, Kathleen. 2010. “A Theory of Gradual Institutional Change.” In Explaining Institutional Change eds. Mahoney, J., Thelen, K.. New York: Cambridge University Press.
Mansfield, Edward D., and Snyder, Jack. 2005. Electing to Fight: Why Emerging Democracies Go to War. Cambridge, MA: MIT Press.
Nash, John. 1951. “Non-cooperative Games.Annals of Mathematics 54: 286–95.
North, Douglass C. 1994. “Economic Performance Through Time.” American Economic Review 84 (3): 359–68.
North, Douglass C. 1995. “Five Propositions about Institutional Change.” In Explaining Social Institutions, eds. Knight, J. and Sened, I.. Ann Arbor: University of Michigan Press.
North, Douglass C. 2005. Understanding the Process of Economic Change. Princeton, NJ: Princeton University Press.
North, Douglass C., and Thomas, Robert P.. 1973. The Rise of the Western World: A New Economic History. Cambridge, UK: Cambridge University Press.
Ordeshook, Peter C., and Shvetsova, Olga. 1997. “Federalism and Constitutional Design.” Journal of Democracy 8 (1): 2742.
Ostrom, Elinor. 2009. Understanding Institutional Diversity. Princeton, NJ: Princeton University Press.
Oyserman, Daphna, and Lee, Spike W.S.. 2008. “Does Culture Influence What and How We Think? Effects of Priming Individualism and Collectivism.” Psychological Bulletin 134 (2): 311–42.
Page, Scott E. 2006. “Path Dependence.” Quarterly Journal of Political Science 1 (1): 87115.
Page, Scott E. 2012. “A Complexity Perspective on Institutional Design.” Politics, Philosophy and Economics 11 (1): 525.
Putnam, Robert D. 1988. “Diplomacy and Domestic Politics: The Logic of Two-Level Games.” International Organization 42 (3): 427–60.
Putnam, Robert. 1993. Making Democracy Work: Civic Traditions in Modern Italy. With Leonardi, Robert and Nanetti, Raffaella Y.. Princeton, NJ: Princeton University Press.
Roland, Gérard. 2000. Transition and Economics: Politics, Markets, and Firms. Cambridge, MA: MIT Press.
Roland, Gérard. 2002. “The Political Economy of Transition.” Journal of Economic Perspectives 16 (1): 2950.
Roland, Gérard. 2004. “Understanding Institutional Change: Fast-Moving and Slow-Moving Institutions.” Studies in Comparative International Development 38 (4): 109–31.
Samuelson, Larry. 1997. Evolutionary Games and Equilibrium Selection Cambridge, MA: MIT Press.
Samuelson, Larry. 2001.“Analogies, Adaptations, and Anomalies.” Journal of Economic Theory 97: 320–67.
Sen, Amartya. 1999. Development as Freedom. Oxford: Oxford University Press.
Swidler, Ann. 1986. “Culture in Action: Symbols and Strategies.” American Sociological Review 51 (2): 273–86.
Taagepera, Rein, and Shugart, Matthew Soberg. 1989. Seats and votes: The effects and determinants of electoral systems. New Haven, CT: Yale University Press.
Tabellini, Guido. 2010. “Culture and Institutions: Economic Development in the Regions of Europe.” Journal of the European Economic Association 8 (4): 677716.
Talhelm, T., Zhang, X., Oishi, S., Shimin, C., Duan, D., Lan, X., and Kitayama, S.. 2014. “Large-Scale Psychological Differences Within China Explained by Rice Versus Wheat Agriculture.” Science 344 (6184): 603–08.
Thelen, Kathleen. 1999. “Historical Institutionalism in Comparative Politics.Annual Review of Political Science 2: 369404.
Tsebelis, George. 1990. Nested Games: Rational Choice in Comparative Politics. Berkeley, CA: University of California Press.
Tsebelis, George. 2002. Veto Players: How Political Institutions Work. Princeton, NJ: Princeton University Press.
Vermeule, Adrian. 2011. The System of the Constitution. Oxford, UK: Oxford University Press.
Weingast, Barry R. 1998. “Political Stability and Civil War: Institutions, Commitment, and American Democracy,” In Bates, Robert H., et al. Analytic Narratives. Princeton, NJ: Princeton University Press.

When Order Affects Performance: Culture, Behavioral Spillovers, and Institutional Path Dependence

  • JENNA BEDNAR (a1) and SCOTT E. PAGE (a1)

Metrics

Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed