A Theory of Conservative Revivals

38 Pages Posted: 17 Dec 2018

See all articles by Murat Iyigun

Murat Iyigun

University of Colorado at Boulder - Department of Economics; Harvard University - Center for International Development (CID); IZA Institute of Labor Economics

Jared Rubin

Chapman University - The George L. Argyros School of Business & Economics

Avner Seror

Chapman University

Abstract

Why do some societies fail to adopt more efficient political and economic institutions in response to changing economic conditions? And why do such conditions sometimes generate conservative ideological backlashes and, at other times, progressive social and political movements? We propose an explanation that highlights the interplay - or lack thereof - between productivity, cultural beliefs and institutions. In our model, production shocks that benefit one sector of the economy may induce forward-looking elites to provide public goods associated with a different, more traditional sector that benefits their interests. This investment results in more agents generating cultural beliefs complementary to the provision of the traditional good, which in turn increases the political power of the traditional elite. Hence, productivity shocks in a more advanced sector of the economy can increase investment, political power, and cultural capital associated with the more traditional sector of the economy, in the process generating a revival of beliefs associated with an outdated economic environment.

Keywords: institutions, conservatism, cultural beliefs, cultural transmission, institutional change, technological change

JEL Classification: D02, N40, N70, O33, O38, O43, Z10

Suggested Citation

Iyigun, Murat F. and Rubin, Jared and Seror, Avner, A Theory of Conservative Revivals. IZA Discussion Paper No. 11954, Available at SSRN: https://ssrn.com/abstract=3301706

Murat F. Iyigun (Contact Author)

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309
United States
303-492-6653 (Phone)
303-492-8622 (Fax)

Harvard University - Center for International Development (CID) ( email )

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Cambridge, MA 02138
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IZA Institute of Labor Economics

P.O. Box 7240
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Germany

Jared Rubin

Chapman University - The George L. Argyros School of Business & Economics ( email )

One University Drive
Orange, CA 92866
United States

HOME PAGE: http://www.jaredcrubin.com

Avner Seror

Chapman University ( email )

Orange, CA 92866
United States

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