Buchanan Hall, #135
July 10, 2017, 01:30 PM to 03:30 PM
Institutions matter. They define our universe of choices and push us to action. Formal institutions such as laws and regulations provide a macro-level backdrop dictating what we can and cannot do; informal institutions such as morality or identity are reflections of individual conviction. Combined, these institutions alter the relative price of any decision. For example, increased regulations often stifle entrepreneurship while a commitment to cooperation might preclude our desires towards corruption. Often these two types of rules work hand in hard: characteristics like trust and tolerance are more likely to be found in countries with better economic outcomes because they allow formal institutions to run more. Despite the interconnectedness, however, economic literature has placed more emphasis upon the importance of formal institutions in determining outcomes due, in large part, to ease of measurement and modeling. My dissertation emphasizes why this literature is insufficient.
Chapter 1 of the dissertation explores the impact of economic institutions and outcomes on moral behavior. In Are markets and money the roots of all evil?, I employ a logistic probit regression model and analyze the relationship between economic freedom and materialism or greed. Typical accounts of this topic outside of economics argue that markets make us morally destitute: with more wealth, more opportunities, and more material goods to acquire, we necessarily will cave into appetitive and non-virtuous behaviors. Results from this chapter show that this argument does not pan out empirically: countries with more economic freedom have fewer individuals that answer survey questions in greedy or materialistic ways.
Chapter 2—Identity and Integration: Cultural Persistence and the Vote for the Eurozone in France—uses several surveys (both historical and current) to empirically illustrate that regionalist identities in France (both current and historical) are highly correlated with a particular political outcome: accession into the Eurozone. In this chapter I argue that periphery regions in France use their unique identities as a social tool to coordinate their interests against national interests in order to resolve social dilemmas and to affect public goods distributions in their favor. These results suggest, contrary to much of the literature on state formation, that states may not shape the preferences of those they rule. Instead, minority interests may be the reason why supranational entities, like the EU, exists.
Chapter 3 revisits the formal institutions literature by documenting, at a micro-level, business regulations in the United States. In Barriers to Entry Index: A Ranking of Starting a Business Difficulties for the United States, I proxy and index various barriers to business entry at the state level. While similar indexes at the country-level find that barriers to entry incontrovertibly lead to lower quality goods and services and higher levels of corruption, new studies suggest that these results are too shallow: regulations could act to benefit consumers. This implies that the quality of institutions plays a large role here. In this chapter, I set the stage to answer this problem.