Working papers
Common Ancestry, Uncommon Findings: Revisiting Cross-Cultural Research in Economics
(with Tinatin Mumladze)
[paper|abstract]
Empirical research on culture and institutions in economics often relies on cross-cultural data to examine historical or contemporary variation in traits across ethnolinguistic groups. We argue that this work has not adequately addressed the well-known problem of cultural non-independence due to common ancestry and show how phylogenetic regression, along with newly available global language trees, can be used to directly account for this issue. Our analysis focuses on Murdock's Ethnographic Atlas, a widely used database of preindustrial societies, with broader implications for any cross-cultural study. First, we show that various economic, institutional, and cultural characteristics in the Atlas exhibit phylogenetic signal – they tend to be more similar among societies with closer ancestral ties – highlighting the non-independence of observations. Second, through simulations in a sample resembling the Ethnographic Atlas, we demonstrate that phylogenetic correlation leads to severe inefficiency of the standard OLS estimator compared to phylogenetic generalized least squares (PGLS). Furthermore, although clustered standard errors partially mitigate the problem, OLS estimation yields unacceptably high type I error rates, frequently detecting a statistically significant relationship where none exists. Finally, we revisit some of the recently published results in a phylogenetic regression framework. In many specifications, PGLS estimates differ markedly from their OLS counterparts, indicating a smaller magnitude and weaker statistical significance of relevant coefficients.
Witchcraft Beliefs and Subjective Well-Being
[paper|abstract]
This study examines the relationship between contemporary witchcraft beliefs and subjective well-being at the individual level. Using survey data from two waves of the Gallup World Poll in Sub-Saharan Africa, we show that witchcraft believers report lower levels of life satisfaction and are more likely to experience stress, worry, and sadness rather than happiness and enjoyment. Consistent with these patterns, a global dataset based on the Pew Research Center surveys reveals that witchcraft believers are less satisfied with how "things are going" in their countries. Both data sources further reveal a strong association between belief in witchcraft and an external locus of control expressed in fatalism and a perceived lack of freedom in making life choices. These findings are in line with the ethnographic evidence on the stress-inducing impact of witchcraft-related fears and contrast sharply with the widely explored role of religion and related supernatural beliefs in coping with anxiety.
Research in progress
Species Diversity and the Adoption of Agriculture
(with Katsuki Morihara)
Local Diversity and Conflict in Sub-Saharan Africa
(with Ameesh Upadhyay)
Ethnicity, Religion, and Conflict: Evidence from African Regions
(with Diego Rivera)
Journal publications
Structural Change, Elite Capitalism, and the Emergence of Labor Emancipation
(with Quamrul Ashraf, Francesco Cinnirella, Oded Galor, and Erik Hornung)
Review of Economic Studies, forthcoming.
[paper|abstract|publication]
This study argues that the decline of coercive labor institutions over the course of industrialization was partly driven by complementarity between physical capital and effective labor in manufacturing. Given the difficulty of extracting labor effort in care-intensive industrial tasks through monitoring and punishment, capital-owning elites ultimately chose to emancipate workers to induce their supply of effective labor and, thus, boost the return to physical capital. This hypothesis is empirically examined in the context of serf emancipation in nineteenth-century Prussia. Exploiting variation in proto-industrialization across Prussian counties, the analysis finds that, consistent with the proposed hypothesis, the initial abundance of elite-owned physical capital is associated with a higher pace of serf emancipation and lower redemption payments to manorial lords.
Headhunting and Warfare in Austronesia: A Phylogenetic Comparative Analysis (with Tinatin Mumladze)
Journal of Economic Behavior & Organization, April 2024, 220, pp. 768–791.
[paper|abstract|publication]
Headhunting – the practice of acquiring human heads for ritual purposes – was historically widespread around the world. We hypothesize that headhunting represented a cultural response to frequent inter-tribal warfare and served as a mechanism to train warriors ready to defend their community. The practice was effective since, first, it allowed verification of warrior quality based on performance in headhunting raids and, second, it offered a system of rewards for men to develop and refine warfare skills. We use phylogenetic comparative methods and ethnographic data to empirically investigate this hypothesis in a sample of preindustrial Austronesian societies. Headhunting turns out to be substantially more prevalent in societies exposed to frequent warfare, accounting for shared cultural ancestry and a host of potentially confounding characteristics. Furthermore, Bayesian estimation of correlated evolution models suggests that, consistent with our hypothesis, the adoption of headhunting typically followed increases in warfare frequency and the decline of this practice was preceded by reduced intergroup conflict.
Witchcraft Beliefs Around the World: An Exploratory Analysis
PLoS ONE, November 2022, 17(11), e0276872.
[paper|abstract|publication]
This paper presents a new global dataset on contemporary witchcraft beliefs and investigates their correlates. Witchcraft beliefs cut across socio-demographic groups but are less widespread among the more educated and economically secure. Country-level variation in the prevalence of witchcraft beliefs is systematically linked to a number of cultural, institutional, psychological, and socioeconomic characteristics. Consistent with their hypothesized function of maintaining order and cohesion in the absence of effective governance mechanisms, witchcraft beliefs are more widespread in countries with weak institutions and correlate positively with conformist culture and in-group bias. Among the documented potential costs of witchcraft beliefs are disrupted social relations, high levels of anxiety, pessimistic worldview, lack of entrepreneurial culture and innovative activity.
Witchcraft Beliefs as a Cultural Legacy of the Atlantic Slave Trade: Evidence from Two Continents
European Economic Review, February 2020, 122, 103362.
[paper|abstract|publication]
This paper argues that the historical slave trade contributed to the propagation of persistent witchcraft beliefs on both sides of the Atlantic Ocean and establishes two key empirical patterns. First, it shows that in Sub-Saharan Africa, representatives of ethnic groups which were more heavily exposed to the Atlantic slave trade in the past are more likely to believe in witchcraft today, thus establishing a link between historical trauma and contemporary culture. Second, exploring the role of the slave trade in cultural transmission across continents, this paper finds that Afro-descendants in modern Latin America are substantially more likely to believe in witchcraft relative to other ancestral groups. Moreover, accounting for ancestry and other relevant factors, people residing in regions historically more reliant on African slave labor are also more likely to be witchcraft believers. These findings support the ethnographic narratives on the connection between slave trade, slavery, and the entrenchment of witchcraft beliefs and shed light on the nature of these beliefs and related practices as a cultural framework for interpreting misfortune, a tool for resisting evil, and a mechanism of enslavement in local communities.
Measuring Regional Ethnolinguistic Diversity in Sub-Saharan Africa: Surveys vs. GIS (with Diego Rivera)
World Bank Economic Review, February 2020, 34(S1), pp. S40–S45.
[paper|abstract|publication]
This paper compares two approaches to measuring subnational ethnolinguistic diversity in Sub-Saharan Africa, one based on censuses and large-scale population surveys and the other relying on the use of geographic information systems (GIS). The two approaches yield sets of regional fractionalization indices that are moderately positively correlated, with a stronger association across rural areas. These differences matter for empirical analysis: in a common sample of regions, survey-based indices of deep-rooted diversity are much more strongly negatively associated with a range of development indicators relative to their highest-quality GIS-based counterparts.
Subnational Diversity in Sub-Saharan Africa: Insights from a New Dataset (with Diego Rivera)
Journal of Development Economics, July 2018, 133, pp. 231–263.
[paper|abstract|publication|replication files]
This paper presents a new dataset on subnational ethnolinguistic and religious diversity in Sub-Saharan Africa covering 36 countries and almost 400 first-level administrative units. We use population censuses and large-scale household surveys to compile detailed data on the ethnolinguistic composition of each region and match all reported ethnicities to Ethnologue, a comprehensive catalog of world languages. This matching allows us to standardize the notion of an ethnolinguistic group and account for relatedness between language pairs, a correlate of shared history and culture, when calculating diversity indices. Exploiting within-country variation provided by our new dataset, we find that local public goods provision, as reflected in metrics of education, health, and electricity access, is negatively related to ethnolinguistic diversity, but only if the underlying basic languages are first aggregated into larger families or if linguistic distances between groups are taken into consideration. In other words, only deep-rooted diversity, based on cleavages formed in the distant past, is strongly inversely associated with a range of regional development indicators. Furthermore, we show that subnational diversity has been remarkably persistent over the past two-three decades implying that population sorting in the short to medium run is unlikely to bias our main findings.
Banks, Market Organization, and Macroeconomic Performance: An Agent-Based Computational Analysis
(with Quamrul Ashraf and Peter Howitt)
Journal of Economic Behavior & Organization, March 2017, 135, pp. 143–180.
[paper|abstract|publication|code]
This paper is an exploratory analysis of the role that banks play in supporting what Jevons called the "mechanism of exchange." It considers a model economy in which exchange activities are facilitated and coordinated by a self-organizing network of entrepreneurial trading firms. Collectively, these firms play the part of the Walrasian auctioneer, matching buyers with sellers and helping the economy to reach prices at which peoples' trading plans are mutually compatible. Banks affect macroeconomic performance in this economy because their lending activities facilitate the entry and influence the exit decisions of trading firms. Both entry and exit have ambiguous effects on performance, and we resort to computational analysis to understand how they are resolved. Our analysis draws an important distinction between normal and worst-case scenarios, with the economy experiencing systemic breakdowns in the latter. We show that banks can provide a "financial stabilizer" that more than counteracts the familiar financial accelerator, and that the stabilizing role of the banking system is particularly apparent in worst-case scenarios. In line with this result, we also find that under less restrictive lending standards banks are able to more effectively improve macroeconomic performance in the worst-case scenarios.
Witchcraft Beliefs and the Erosion of Social Capital: Evidence from Sub-Saharan Africa and Beyond
Journal of Development Economics, May 2016, 120, pp. 182–208.
[paper|abstract|publication]
This paper examines the relationship between witchcraft beliefs, a deep-rooted cultural phenomenon, and various elements of social capital. Using novel survey data from nineteen countries in Sub-Saharan Africa we establish a robust negative association between the prevalence of witchcraft beliefs and multiple measures of trust which holds after accounting for country fixed effects and potential confounding factors at the individual, regional, and ethnic-group levels. This finding extends to other metrics of social capital, namely charitable giving and participation in religious group activities. Such coexistence of witchcraft beliefs and antisocial attitudes stands in stark contrast to a well-explored alternative cultural equilibrium characterized by religious prosociality. Evidence from societies beyond Africa shows that in preindustrial communities where witchcraft is believed to be an important cause of illness, mistrust and other antisocial traits are inculcated since childhood. Furthermore, second-generation immigrants in Europe originating from countries with widespread witchcraft beliefs are generally less trusting.
How Inflation Affects Macroeconomic Performance: An Agent-Based Computational Investigation
(with Quamrul Ashraf and Peter Howitt)
Macroeconomic Dynamics, March 2016, 20(2), pp. 558–581.
[paper|abstract|publication|code|replication files]
We use an agent-based computational approach to show how inflation can worsen macroeconomic performance by disrupting the mechanism of exchange in a decentralized market economy. We find that, in our model economy, increasing the trend rate of inflation above 3 percent has a substantial deleterious effect, but lowering it below 3 percent has no significant macroeconomic consequences. Our finding remains qualitatively robust to changes in parameter values and to modifications to our model that partly address the Lucas critique. Finally, we contribute a novel explanation for why cross-country regressions may fail to detect a significant negative effect of trend inflation on output even when such an effect exists in reality.
The Economic Origins of the Evil Eye Belief
Journal of Economic Behavior & Organization, February 2015, 110, pp. 119–144.
[paper|abstract|publication]
The evil eye belief is a widespread superstition according to which people can cause harm by a mere envious glance at coveted objects or their owners. This paper argues that such belief originated and persisted as a useful heuristic under conditions in which envy was likely to trigger destructive behavior and the avoidance of other people's envy, effectively prescribed by the evil eye belief, was a proper response to that threat. We hypothesize that in weakly institutionalized societies wealth differentiation and vulnerability of productive assets were the key factors enabling envy-induced destructive behavior and contributing to the emergence and spread of the evil eye belief as a cultural defense mechanism. Evidence from small-scale preindustrial societies shows that there is indeed a robust positive association between the incidence of the belief and measures of wealth inequality, controlling for potential confounding factors such as patterns of spatial and cross-cultural diffusion and various dimensions of early economic development. Furthermore, the evil eye belief is more prevalent in agro-pastoral societies that tend to sustain higher levels of inequality and where vulnerable material wealth plays a dominant role in the subsistence economy.
The Two Sides of Envy
Journal of Economic Growth, December 2014, 19(4), pp. 407–438.
[paper|abstract|publication]
The two sides of envy, destructive and constructive, give rise to qualitatively different equilibria, depending on the economic, institutional, and cultural environment. If investment opportunities are scarce, inequality is high, property rights are not secure, and social comparisons are strong, society is likely to be in the "fear equilibrium," in which better endowed agents underinvest in order to avoid destructive envy of the relatively poor. Otherwise, the standard "keeping up with the Joneses" competition arises, and envy is satisfied through suboptimally high efforts. Economic growth expands the production possibilities frontier and triggers an endogenous transition from one equilibrium to the other causing a qualitative shift in the relationship between envy and economic performance: envy-avoidance behavior with its adverse effect on investment paves the way to creative emulation. From a welfare perspective, better institutions and wealth redistribution that move the society away from the low-output fear equilibrium need not be Pareto improving in the short run, as they unleash the negative consumption externality. In the long run, such policies contribute to an increase in social welfare due to enhanced productivity growth.
Envy in the Process of Development: Implications for Social Relations and Conflict
Economics of Peace and Security Journal, October 2013, 8(2), pp. 13–19.
[paper|abstract|publication]
This article examines envy as an important cultural link between inequality, institutions, development, and conflict. It argues that envy can be either a source of strife and stagnation or an engine for peaceful competition and growth. The fundamental conditions that activate the constructive side of envy and shut down its destructive side are access to productive investment opportunities, equality, security of property rights, and mild social comparisons. The dominant role of envy in society gives rise to a set of related cultural norms and beliefs that affect economic performance and social relations. While constructive envy is manifested in emulation or even envy-provocation – standard features of a consumer society – destructive envy produces a fear-of-envy culture that hampers economic incentives and creates an environment of suspicion and conflict.
Macroeconomics in a Self-Organizing Economy (with Quamrul Ashraf and Peter Howitt)
Revue de l'OFCE / Debates and policies, October 2012, 124, pp. 43–65.
[paper|abstract|publication|comments and reply]
This paper emphasizes the importance of considering the mechanisms that coordinate economic transactions in a decentralized economy, namely the role played by a self-organizing network of entrepreneurial trading firms, for theories aimed at guiding macroeconomic policy. We review a research program that aims to understand how, and how well, trading activities are coordinated in various circumstances by employing agent-based computational (ACE) models of stylized economies where these activities take place in a self-organizing network of markets created and operated by profit-seeking business firms. We discuss how such a research program can yield important policy-relevant insights, beyond those that can be offered by conventional dynamic stochastic general equilibrium (DSGE) models, into several macroeconomic phenomena including the emergence of monetary equilibria in a decentralized economy, the microfoundations of the multiplier process, the costs of a higher trend rate of inflation, and the role of the banking system in economic crises.
Book chapters
Witchcraft Beliefs, Social Relations, and Development
In Handbook of Labor, Human Resources and Population Economics. Edited by Klaus F. Zimmermann.
Cham: Springer, 2022.
[paper|abstract|publication]
Beliefs in witchcraft, or the ability of certain people to intentionally cause harm via supernatural means, have been documented across societies all over the world. Extensive ethnographic research on this phenomenon over the past century explored the many roles of witchcraft beliefs in communities highlighting both their social functions and detrimental consequences. Yet, empirical evidence based on systematic statistical analyses or experiments has been lacking until very recently. This chapter reviews the nascent literature on witchcraft beliefs in economics and other quantitative social sciences and summarizes the main directions and results of this research to date. The major themes discussed in the chapter include social relations, economic development, and institutions in their connection to witchcraft beliefs.
Long-Run Development and the New Cultural Economics
In Demographic Change and Long-Run Development. Edited by Matteo Cervelatti and Uwe Sunde.
Cambridge, MA: MIT Press, 2017, Chapter 9, pp. 221–261.
[paper|abstract|publication]
This paper reviews recent economics literature on culture, with an emphasis on its relation to the field of long-run growth and development. It examines the key issues debated in the new cultural economics: causal effects of culture on economic outcomes, the origins and social costs of culture, as well as cultural transmission, persistence, and change. Some of these topics are illustrated in application to the economic analysis of envy-related culture.
Book reviews
Witch Hunts: Culture, Patriarchy, and Structural Transformation (by Govind Kelkar and Dev Nathan)
Journal of Development Studies, 2023, 59 (8), pp. 1313–1314.
[publication]
