Sunday, March 21, 2010

Institutions that Matter

One of the things that macroeconomists have learned since retooling to focus on growth models over the last 15 years is that the institutions that make up a society and culture matter to the long-run well-being of its people.

One of those institutions is trusting strangers: every developed country requires people to rely on strangers for fulfillment of some needs … and it works. There are very few developing countries that have cultures with any degree of trust in strangers.

Sciences rely somewhat on confirmation from other fields, and here’s what an anthropologist has found:

… Big step toward resolving this question is being published today in the journal Science [subscription required]. The researchers find strong evidence that market institutions cause people to treat each other, especially, strangers more fairly.

More boldly, their results suggest that this isn’t just about the golden rule:

… Our results contradict previous theories that humans learned to treat strangers fairly by transferring behaviour and norms developed in their actions and attitudes toward family and kin …

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