Institutions and Cultural Capacity: A Systems Perspective

40 Pages Posted: 26 Feb 2024 Last revised: 29 Feb 2024

See all articles by Jenna Bednar

Jenna Bednar

University of Michigan at Ann Arbor - Department of Political Science; University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy; Santa Fe Institute

Scott Page

University of Michigan at Ann Arbor

Date Written: February 17, 2024

Abstract

Societies rely on a mixture of markets, hierarchies, and democratic institutions to allocate resources, make decisions, and establish order. The success of any one institution depends on its design features, the nature of the task, and the cultural capacities of the society within which the institution is embedded. In this paper, rather than consider cultural capacity as exogenous, we model institutions and cultural capacities as interdependent. Different institutions build different types of cultural capacities. Cultural-institutional equilibria exist when cultural capacities are consistent with institutional choices, and institutional choices are optimal given tasks and culture. We highlight five results. First, positive feedback between cultural capacities and institutional performance produces multiple equilibria, implying that cultural capacities and ensemble compositions will vary by place. Second, cultural-institutional equilibria will generically not be efficient because of a disconnect between the production and utilization of cultural capacity. Third, we derive a paradox of cultural capacity-building: an institutional type that builds too much generic cultural capacity can collapse because it makes other types of institutions more effective. Fourth, we show that complementary feedback with another institution can prevent collapse. Finally, we show that complementary feedback between other institutional types can reproduce a collapse of the generic cultural capacity-producing institution.

Keywords: institutional interdependence, comparative institutional analysis, systems theory

Suggested Citation

Bednar, Jenna and Page, Scott, Institutions and Cultural Capacity: A Systems Perspective (February 17, 2024). Available at SSRN: https://ssrn.com/abstract=4739145 or http://dx.doi.org/10.2139/ssrn.4739145

Jenna Bednar (Contact Author)

University of Michigan at Ann Arbor - Department of Political Science ( email )

Ann Arbor, MI 48109
United States

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy ( email )

735 South State Street, Weill Hall
Ann Arbor, MI 48109
United States

Santa Fe Institute ( email )

1399 Hyde Park Road
Santa Fe, NM 87501
United States

Scott Page

University of Michigan at Ann Arbor

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