Culture as a constitution

Published by Edward Elgar Publishing

Originally published in Culture and Economic Action

Find the full chapter here.

Many of the concepts economists use to explain why some countries are rich and others are poor—concepts like institutions, legal origins, ethnic fractionalization, and geography—do not have controversial definitions. The concept of ‘culture,’ however, means different things to different economists. Achieving consensus on the meaning of culture may improve our understanding of how it influences economic activity, in the same way that a shared understanding of institutions, for example, allows for advances in institutionalist economic theory. If consensus is not possible, making available to economists a strategy for modeling the effect of culture on economic activity that captures how culture shapes, determines and colors economic action could be a useful advance in cultural economy. Economists, I argue, should consider modeling culture as a constitution. Why is it useful to model culture as a constitution to explain culture’s impact on economic activity? I argue that, just as a constitution frames interactions between government and citizens, culture provides people with a shared framework of meaning in which to make their economic decisions. People with different cultural constitutions will ascribe different meanings to their experiences. As a result of culture, then, they make different decisions.