Cultural and Institutional Bifurcation: China and Europe Compared. Article written by Avner Greif and Guido Tabellini. American Economic Review, May 2010.
How to sustain cooperation is a key challenge for any society. Different social organizations have evolved in the course of history to cope with this challenge by relying on different combinations of external ( formal and informal) enforcement institutions and intrinsic motivation. Some societies rely more on informal enforcement and moral obligations within their constituting groups. Others rely more on formal enforcement and general moral obligations towards society at large. How do culture and institutions interact in generating different evolutionary trajectories of societal organizations? Do contemporary attitudes, institutions, and behavior reflect distinct pre-modern trajectories?