The Clan and the Corporation: Sustaining Cooperation in China and Europe

Abstract

Over the last millennium, the clan and the corporation have been the loci of cooperation in China and Europe respectively. This paper examines-analytically and historically-the cultural and institutional co-evolution that led to this bifurcation. We highlight that groups with which individuals identify are basic units of cooperation. Such loyalty groups influence institutional development because intra-group moral commitment reduces enforcement cost implying a comparative advantage in pursuing collective actions. Loyalty groups perpetuate due to positive feedbacks between morality, institutions, and the implied pattern of cooperation.

An Experimental Study of Kin and Ethnic Favoritism

“…A recent literature in economics has begun to connect historical (and contemporary) variation in family structure, kinship, and marriage patterns to institutional quality (Enke 2019; Greif 2006; Greif and Tabellini 2015; Moscona, Nunn, and Robinson 2017a; Moscona, Nunn, and Wilson 2017b; Schulz 2016; Woodley and Bell 2013). While strong kin ties among immediate family are virtually universal, societies differ widely in terms of kin relations beyond immediate family.…”

“…This is consistent with our data, but it raises a fundamental question about why institutional quality varies. A growing literature suggests that kinship and marriage patterns may be a fundamental determinant of institutional quality (Enke 2019; Greif 2006; Greif and Tabellini 2015; Moscona, Nunn, and Robinson 2017a; Moscona, Nunn, and Wilson 2017b; Schulz 2016; Woodley and Bell 2013). Canada and Iran differ substantially on these dimensions.…”

Lineage-based heterogeneity and cooperative behavior in rural China

“…For example, according to a six-month fieldwork carried out by Tsai in 316 villages between 1999 and, the obligations to contribute to the good of the lineage groups provide incentives for public good provision. Greif and Tabellini (2015) argue that clans resumed their role in promoting mutual aid, securing their own benefits as well as contributing to public goods. Xu and Yao (2015) find that village leaders from larger lineages considerably increased local public good investment.…”

Ideas or institutions? – a comment

“…In my own work, I have attempted to exploit this distinction to explain the functioning of administrative and political institutions within Italy, as well as differences in economic development across countries or regions (see Tabellini, 2008a). In ongoing work with Avner Greif, we seek to explain the different evolution of social organizations in China and Europe on the basis of this distinction: China's culture of limited morality led to the emergence of the clan as a key organization, whereas the diffusion of the corporation in Europe was facilitated by the underlying principles of generalized morality imbedded in the Christian religion (Greif and Tabellini, 2015).…”