We consider a multi-community city where community quality is linked to residents' civic efforts ... more We consider a multi-community city where community quality is linked to residents' civic efforts like being proactive in preventing crime and in ensuring the quality of publicly provided goods. Homeownership increases incentives for such efforts, but credit market imperfections force the poor to rent. Within-community externalities can lead to segregated cities − with the rich living with rich in healthy homeowner communities, and the poor living with poor in dysfunctional renter communities. The pattern of tenure segregation across communities in the US accords well with our prediction. We study alternative tax-subsidy policies to alleviate inefficiencies in the housing market, and identify the winners and losers under such policies. Support from the MacArthur Network on Inequality and Economic Performance is gratefully acknowledged. Jyotsna Puri and Varsha Venkatesh provided valuable research assistance. We thank an anonymous referee, Roland Bénabou, Tim Besley, Avinash Dixit, Debraj Ray, and Tony Yezer for helpful comments. We have also benefited from comments by seminar participants at Boston,
This paper is an attempt to broaden the standard economic discourse by importing insights into hu... more This paper is an attempt to broaden the standard economic discourse by importing insights into human behavior not just from psychology, but also from sociology and anthropology. Whereas the concept of the decision-maker in standard economics is the rational actor, and in early work in behavioral economics it is the quasi-rational actor, in some of the recent work in behavioral economics it could be called the enculturated actor. By the enculturated actor, we mean an actor whose preferences and cognition are subject to two social influences that go beyond the context of the moment of decision-making: (a) the social contexts to which the actor has become exposed and, especially accustomed; and (b) cultural mental models-including categories, narratives, and worldviews. We trace how these factors shape individuals' behavior through the endogenous determination of both preferences and the lenses through which individuals see the world-their perception, categorization, and interpretation of situations. We offer a tentative taxonomy of the social determinants of behavior and describe results of both controlled and natural experiments that only a broader view of the social determinants of behavior can plausibly explain. The perspective suggests new tools to promote well-being and economic development.
This article surveys an influential new research program on historical paths of institutional dev... more This article surveys an influential new research program on historical paths of institutional development and their consequences for growth. The research program exploits the experience of European colonialism as a natural experiment whose results bear on the way institutions affect development. The central hypothesis of this research is that societies that began with more extreme inequality were more likely to develop institutions allowing much of the population only limited access to economic opportunities. The research has uncovered a striking "reversal of fortune": among the areas colonized by Europe, those that were relatively rich in the 1600s are today far poorer than the areas (such as the United States and Canada) that initially were viewed as relatively undesirable. The timing of the reversal-at the onset of the Industrial Revolution, when there was probably a premium on broad participation in commercial activity-suggests that institutions associated with high inequality may be a causal factor in low aggregate incomes. This research program is still at an early stage. But studies of institutions in India using data rich enough to permit hypothesis-testing provide evidence supporting the hypotheses developed in the analysis of the European colonial experience.
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Lab-in-the-field experiments have played a major role in identifying behavioral causes of discrim... more Lab-in-the-field experiments have played a major role in identifying behavioral causes of discrimination and ways to reduce discrimination. Such experiments have made it possible to isolate, among the many causes of discrimination, how cognitive mechanisms such as stereotyping, implicit bias, and in-group favoritism contribute to unequal experiences and opportunities. Evidence from natural experiments shows that mandates and incentives, established norms, and the likely desires of judges, teachers, and tenure committees to be fair do not "fix" the biases revealed in lab-in-the-field experiments. To perceive is to categorize,
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Uno de los más fructíferos avances en la Economía moderna ha sido la introducción de realismo psi... more Uno de los más fructíferos avances en la Economía moderna ha sido la introducción de realismo psicológico en el modelo del "hombre económico". El Informe sobre el Desarrollo Mundial 2015 organiza la evidencia sobre cómo los seres humanos realmente piensan y toman decisiones en un marco coherente, útil para el diseño de la Política de Desarrollo. Este trabajo profundiza en los tres principios del pensamiento humano que constituyen el marco intelectual del informe: (i) el pensamiento automático, (ii) el pensamiento social; y, (iii) el pensamiento con modelos mentales. Las percepciones del comportamiento crean posibilidades de intervenciones políticas que producen "milagros" desde la perspectiva de la Economía tradicional
This chapter examines how “law and economics” is affected by the broadening of the scope of econo... more This chapter examines how “law and economics” is affected by the broadening of the scope of economics. The “command function” of law was partly dismantled and enriched by the new work on the “expressive function,” which recognized that the law works not just by command, reward, and punishment but also by triggering social norms and affecting some of our preferences. The chapter then introduces a third novelty, what can be referred to as the “schematizing function” of the law. Lodged in their brains, human beings have cultural categories and concepts that influence what they focus on and what they ignore. At one level, all this happens instinctively and so may seem like innate qualities, but they are influenced and shaped by many social factors by the laws of the nation and also the deliberations surrounding the adoption of laws. The chapter shows how entrenched cultural categories can be used to both reinforce and to block a law.
This article surveys an influential new research program on historical paths of institutional dev... more This article surveys an influential new research program on historical paths of institutional development and their consequences for growth. The research program exploits the experience of European colonialism as a kind of "natural experiment" whose results bear on the way institutions affect development. The central hypothesis of this research is that societies that began with more extreme inequality were more likely to develop institutions allowing much of the population only limited access to economic opportunities. The research has uncovered a striking reversal of fortune among the areas colonized by Europe; those that were relatively rich in the 1600s are today far poorer than the areas (such as the United States and Canada) that initially were viewed as relatively undesirable. The timing of the reversal--at the onset of the Industrial Revolution, when there was probably a premium on broad participation in commercial activity--suggests that institutions associated wit...
Domestic violence is common, socially and economically very costly, yet widely accepted in many c... more Domestic violence is common, socially and economically very costly, yet widely accepted in many countries. Can participatory theater—a novel cultural intervention—reduce its occurrence? Through a survey that the authors conducted in 92 villages in West Bengal, India, this paper provides a first large-scale evaluation of participatory theater. By utilizing markers of women’s empowerment, the survey shows that longterm exposure to plays on patriarchy enhances women’s empowerment and reduces spousal abuse by as much as 25 percent. The evidence suggests that such interactive plays, by encouraging its audience to rethink and rescript collective representations of domestic violence and masculinity, trigger durable social change in village communities.
We consider a multi-community city where community quality is linked to residents' civic efforts ... more We consider a multi-community city where community quality is linked to residents' civic efforts like being proactive in preventing crime and in ensuring the quality of publicly provided goods. Homeownership increases incentives for such efforts, but credit market imperfections force the poor to rent. Within-community externalities can lead to segregated cities − with the rich living with rich in healthy homeowner communities, and the poor living with poor in dysfunctional renter communities. The pattern of tenure segregation across communities in the US accords well with our prediction. We study alternative tax-subsidy policies to alleviate inefficiencies in the housing market, and identify the winners and losers under such policies. Support from the MacArthur Network on Inequality and Economic Performance is gratefully acknowledged. Jyotsna Puri and Varsha Venkatesh provided valuable research assistance. We thank an anonymous referee, Roland Bénabou, Tim Besley, Avinash Dixit, Debraj Ray, and Tony Yezer for helpful comments. We have also benefited from comments by seminar participants at Boston,
This paper is an attempt to broaden the standard economic discourse by importing insights into hu... more This paper is an attempt to broaden the standard economic discourse by importing insights into human behavior not just from psychology, but also from sociology and anthropology. Whereas the concept of the decision-maker in standard economics is the rational actor, and in early work in behavioral economics it is the quasi-rational actor, in some of the recent work in behavioral economics it could be called the enculturated actor. By the enculturated actor, we mean an actor whose preferences and cognition are subject to two social influences that go beyond the context of the moment of decision-making: (a) the social contexts to which the actor has become exposed and, especially accustomed; and (b) cultural mental models-including categories, narratives, and worldviews. We trace how these factors shape individuals' behavior through the endogenous determination of both preferences and the lenses through which individuals see the world-their perception, categorization, and interpretation of situations. We offer a tentative taxonomy of the social determinants of behavior and describe results of both controlled and natural experiments that only a broader view of the social determinants of behavior can plausibly explain. The perspective suggests new tools to promote well-being and economic development.
This article surveys an influential new research program on historical paths of institutional dev... more This article surveys an influential new research program on historical paths of institutional development and their consequences for growth. The research program exploits the experience of European colonialism as a natural experiment whose results bear on the way institutions affect development. The central hypothesis of this research is that societies that began with more extreme inequality were more likely to develop institutions allowing much of the population only limited access to economic opportunities. The research has uncovered a striking "reversal of fortune": among the areas colonized by Europe, those that were relatively rich in the 1600s are today far poorer than the areas (such as the United States and Canada) that initially were viewed as relatively undesirable. The timing of the reversal-at the onset of the Industrial Revolution, when there was probably a premium on broad participation in commercial activity-suggests that institutions associated with high inequality may be a causal factor in low aggregate incomes. This research program is still at an early stage. But studies of institutions in India using data rich enough to permit hypothesis-testing provide evidence supporting the hypotheses developed in the analysis of the European colonial experience.
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Lab-in-the-field experiments have played a major role in identifying behavioral causes of discrim... more Lab-in-the-field experiments have played a major role in identifying behavioral causes of discrimination and ways to reduce discrimination. Such experiments have made it possible to isolate, among the many causes of discrimination, how cognitive mechanisms such as stereotyping, implicit bias, and in-group favoritism contribute to unequal experiences and opportunities. Evidence from natural experiments shows that mandates and incentives, established norms, and the likely desires of judges, teachers, and tenure committees to be fair do not "fix" the biases revealed in lab-in-the-field experiments. To perceive is to categorize,
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Uno de los más fructíferos avances en la Economía moderna ha sido la introducción de realismo psi... more Uno de los más fructíferos avances en la Economía moderna ha sido la introducción de realismo psicológico en el modelo del "hombre económico". El Informe sobre el Desarrollo Mundial 2015 organiza la evidencia sobre cómo los seres humanos realmente piensan y toman decisiones en un marco coherente, útil para el diseño de la Política de Desarrollo. Este trabajo profundiza en los tres principios del pensamiento humano que constituyen el marco intelectual del informe: (i) el pensamiento automático, (ii) el pensamiento social; y, (iii) el pensamiento con modelos mentales. Las percepciones del comportamiento crean posibilidades de intervenciones políticas que producen "milagros" desde la perspectiva de la Economía tradicional
This chapter examines how “law and economics” is affected by the broadening of the scope of econo... more This chapter examines how “law and economics” is affected by the broadening of the scope of economics. The “command function” of law was partly dismantled and enriched by the new work on the “expressive function,” which recognized that the law works not just by command, reward, and punishment but also by triggering social norms and affecting some of our preferences. The chapter then introduces a third novelty, what can be referred to as the “schematizing function” of the law. Lodged in their brains, human beings have cultural categories and concepts that influence what they focus on and what they ignore. At one level, all this happens instinctively and so may seem like innate qualities, but they are influenced and shaped by many social factors by the laws of the nation and also the deliberations surrounding the adoption of laws. The chapter shows how entrenched cultural categories can be used to both reinforce and to block a law.
This article surveys an influential new research program on historical paths of institutional dev... more This article surveys an influential new research program on historical paths of institutional development and their consequences for growth. The research program exploits the experience of European colonialism as a kind of "natural experiment" whose results bear on the way institutions affect development. The central hypothesis of this research is that societies that began with more extreme inequality were more likely to develop institutions allowing much of the population only limited access to economic opportunities. The research has uncovered a striking reversal of fortune among the areas colonized by Europe; those that were relatively rich in the 1600s are today far poorer than the areas (such as the United States and Canada) that initially were viewed as relatively undesirable. The timing of the reversal--at the onset of the Industrial Revolution, when there was probably a premium on broad participation in commercial activity--suggests that institutions associated wit...
Domestic violence is common, socially and economically very costly, yet widely accepted in many c... more Domestic violence is common, socially and economically very costly, yet widely accepted in many countries. Can participatory theater—a novel cultural intervention—reduce its occurrence? Through a survey that the authors conducted in 92 villages in West Bengal, India, this paper provides a first large-scale evaluation of participatory theater. By utilizing markers of women’s empowerment, the survey shows that longterm exposure to plays on patriarchy enhances women’s empowerment and reduces spousal abuse by as much as 25 percent. The evidence suggests that such interactive plays, by encouraging its audience to rethink and rescript collective representations of domestic violence and masculinity, trigger durable social change in village communities.
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