Research

Publications

On the Coevolution of Individualism and Institutions (Journal of Economic Growth, 2023)

With Moti Michaeli and Assaf Sarid

Abstract: To unravel the roots of the relationship between the individualism–collectivism dimension of culture (IC) and market-supporting institutions, we develop a model where the two interact and coevolve. IC and institutions are related indirectly via social organization: agents settle either in the Town, a loose organization where they work independently, or in the Clan, a cohesive organization where they engage in collective work. The town’s relative economic potential positively affects the town’s size and institutional quality. A larger town then renders society more individualistic, which attracts even more agents to the town and improves its institutional quality. The resulting positive feedback loop drives societies toward different steady states. If the town’s relative economic potential is sufficiently high, the society converges to a steady state with a completely individualistic culture, high institutional quality, and a large town. Otherwise, the society converges to a steady state with a completely collectivistic culture, weak institutions, and a large clan. We conclude that contemporary IC and institutions exhibit path dependence and are thus related to the historical exogenous conditions in each region. Using current and historical data, we provide empirical evidence supporting our model. In addition, we apply the model to discuss the historical divergence between China and Europe.

Paper

Work in Progress

Breaking Barriers, Building (on) Networks: Lessons from the Jewish Emancipation in Germany

With Assaf Sarid

Abstract: Religion is commonly acknowledged as a cultural force that shapes individual beliefs and decision-making. However, it also functions as a social construct, interweaving with local identities, establishing networks, and coordinating group behavior. We study the effect of religious social networks on cultural integration and occupational specialization of Jews in nineteenth-century Germany. The legal emancipation in the first half of the century granted Jews substantial rights, aligning their prospects with those of Christians during the unfolding Industrial Revolution. Nevertheless, Jews exhibited distinctive occupational choices, specializing in commerce. Despite the resulting segregation in the labor market, Jews gradually integrated into German society. We seek to explain this duality, arguing that Jewish social networks channeled Jews to commerce while allowing them to undergo acculturation without abandoning the group. To explore the idea, we use county-level data from Prussia and unique individual-level datasets from German archives. Preliminary findings support our hypothesis, indicating the potential role of networks in the nexus between industrialization, Jewish commerce specialization, and acculturation. A broad historical narrative and a game-theoretic model further elucidate the proposed mechanisms.