Thierry Verdier

This paper elucidates the willingness of an autocrat to push through institutional reforms in a context where traditional authorities represented by religious clerics are averse to them and where the military control the means of repression and can potentially stage a coup. We show that although the autocrat always wants to co-opt the military, this is not necessarily true of the clerics. Exclusive co-option of the military obtains where the loyalty of the autocrat’s army is strong while the organizational strength of religious movements is rather low. Radical institutional reforms can then be implemented. Empirically, the dominant regime in contemporary Muslim countries is the regime of double co-option where the autocrat resorts to a double-edged tactic: pleasing the official clerics by slowing the pace of reforms and ensuring the loyalty of the military so as to put down clerics-led rebellions.

In this paper we survey recent advances in the economic theory of cultural transmission. We highlight three main themes on which the literature has made great progress in the last ten years:the domain of traits subject to cultural transmission, the micro-foundations for the technology of transmission, and feedback effects between culture, institutions, and various socio-economic environments. We conclude suggesting interesting areas for future research.

This paper provides a simple model of identity salience that is applied to the phenomenon of the recent rise in right-wing populism in the Western world. Trade and capital flows, skill-biased technological change, and migration have led to declining employment and wages in these economies and a parallel rise in economic and cultural populism, tapping into nativist sentiments. We argue that when long-term income stagnation for most of the population and decline for some go together with high rates of income growth at the very top, one has zero-sum economics and that naturally raises the possibility of using various kinds of social identities to claim a bigger share of a fixed sized pie. We show that in ethnically or racially polarized societies this naturally leads to the salience of social identities that enable majority ethnic groups to vote for policies that exclude minority groups so that they get a greater share of a dwindling surplus. In contrast, in more ethnically and racially homogeneous societies, this would instead lead to the demand for more pro-redistribution policies that involve greater provision of public goods.

We propose a model of intergenerational transmission of education wherein children belong to either highly educated or low-educated families. Children choose the intensity of their social activities, while parents decide how much educational effort to exert. Using Add Health data, we find that, on average, children’s homophily acts as a complement to the educational effort of highly educated parents but as a substitute for the educational effort of low-educated parents. We also find that policies that subsidize kids’ socialization efforts can backfire for low-educated students because they tend to increase their interactions with other low-educated students.