NBER Working Papers by Thierry Verdier

Cultural transmission arguably plays an important role in the determination of many fundamental preference traits (e.g., discounting, risk aversion and altruism) and most cultural traits, social norms, and ideological tenets ( e.g., attitudes towards family and fertility practices, and attitudes in the job market). It is, however, the pervasive evidence of the resilience of ethnic and religious traits across generations that motivates a large fraction of the theoretical and empirical literature on cultural transmission. This article reviews the main contributions of models of cultural transmission, from theoretical and empirical perspectives. It presents their implications regarding the long-run population dynamics of cultural traits and cultural heterogeneity, the world's geographical fra...

We propose a theoretical framework to study the determinants of ethnic and religious identity along two distinct motivational processes which have been proposed in the social sciences: cultural conformity and cultural distinction. Under cultural conformity, ethnic identity is reduced by neighborhood integration, which weakens group loyalties and prejudices. On the contrary, under cultural distinction, ethnic minorities are more motivated in retaining their own distinctive cultural heritage the more integrated are the neighborhoods where they reside and work. Data on ethnic preferences and attitudes provided by the Fourth National Survey of Ethnic Minorities in the UK enables us to test the relative significance of these two identity processes. We find evidence consistent with intense ethni...

Many developing countries have suffered under the personal rule of kleptocrats', who implement highly inefficient economic policies, expropriate the wealth of their citizens, and use the proceeds for their own glorification or consumption. We argue that the success of kleptocrats rests, in part, on their ability to use a divide-and-rule' strategy, made possible by weaknesses in the institutions in these societies. Members of society need to cooperate in order to depose a kleptocrat, yet such cooperation may be defused by imposing punitive rates of taxation on any citizen who proposes such a move, and redistributing the benefits to those who need to agree to it. Thus the collective action problem can be intensified by threats which remain off the equilibrium path. In equilibrium, all are ...

One of the most robust empirical regularities in the political economy of trade is the persistence of protection. This paper explains persistent protection in terms of the interaction between industry adjustment, lobbying, and the political response. Faced with a trade shock, owners of industry-specific factors can undertake costly adjustment, or they can lobby politicians for protection and thereby mitigate the need for adjustment. The choice depends on the returns from adjusting relative to lobbying. By introducing an explicit lobbying process, it can be shown that the level of tariffs is an increasing function of past tariffs. Since current adjustment diminishes future lobbying intensity, and protection reduces adjustment, current protection raises future protection. This simple l...