This paper seeks to contribute to institutional theory by providing it with a stronger basis in cognitive and affective psychology. We organise this contribution around the central question of what psychological preconditions must exist for institutions to determine behaviour and order our...

It is now abundantly clear that social norms channel behavior and impact economic development. This insight leads to the question: How do social norms evolve? This survey examines research that relies on geography to explain the development of social norms, and suggests that religion and family...

To unravel the roots of the relationship between the Individualism-Collectivism dimension of culture (IC) and market-supporting institutions, we develop a micro-founded model in which the two interact and coevolve. IC and institutions are related indirectly, via social organization: Individuals...

Why do sudden and massive social, economic, and political changes occur when and where they do? Are there institutional preconditions that encourage such changes when present and discourage such changes when absent? In this paper, I employ a general model which suggests that massive equilibrium...

The economic impact of an institutional transplant depends on the underlying cultural envi-ronment of the receiving country. This paper provides the first evidence that the positive effect of importing good institutions cancels out when the receiving territories are characterized by cultural...

This study provides evidence that strong kin networks are detrimental for democratic participatory institutions and that the medieval Catholic Church’s marriage regulations dissolved Europe’s clan-based kin networks which contributed to the emergence of participatory institutions. I show...

The paper tries to improve our understanding on the role of institutions in development by critically examining the current orthodox discourse on institutions and highlighting some of its key problems. After discussing some definitional problems, the chapter examines a number of problems in the...

In this paper I theoretically argue that people weigh specialization gains against trade costs when they decide whether to specialize and trade or self-produce all goods by themselves. Trade costs relate to institutional quality. Thus, more people participate in trade under better institutions....

Broadly speaking, institutional reformers decide about the sequencing of types of reforms, either addressing institutional quality or macroeconomic stability. This paper develops a dynamic population game, in which agents play a simple anonymous-exchange game of cooperating or defecting. Agents...

This paper argues that, in the absence of a strong membership incentive within the European Neighborhood Policy (ENP), a top-down institutional convergence of CIS countries towards European standards - i.e. democracy and market economy - is unlikely to be successful. However, due to enlargement...