How Institutions Shape Culture: Survey and Experimental Evidence from a Large-Scale Land Tenure Reform Implemented as a Randomized Control Trial

Project Information

MYlandOURland

Grant agreement ID: 789596

DOI

10.3030/789596

Project closed

EC signature date 27 March 2018

Start date 1 September 2019

End date 31 August 2021

Funded under

• EXCELLENT SCIENCE - Marie Skłodowska-Curie Actions

Total cost

€ 158 121,60

EU contribution

€ 158 121,60

Coordinated by

UNIVERSIDAD POMPEU FABRA
Spain

Periodic Reporting for period 1 - MYlandOURland (How Institutions Shape Culture: Survey and Experimental Evidence from a Large-Scale Land Tenure Reform Implemented as a Randomized Control Trial)

Reporting period: 2019-09-01 to 2021-08-31

Summary of the context and overall objectives of the project

This project aims to isolate the causal effects of formal institutions on cultural variables that influence economic development, namely trust and cooperation with strangers, moral preferences, and social value orientation. In particular, I investigate how the passage from an informal system of collective use-rights into a formal system of individual property rights impacts on the aforementioned cultural variables in the context of a fieldwork study conducted in rural Benin. The reform I study was implemented ten years before my data collection took place following a randomized control-trial procedure across hundreds of Beninese villages. This, as in an experiment, makes possible to compare the effects of the reform on cultural variables by collecting behavioral and survey data from a sample of participants in "treated" villages selected to have the property rights reform implemented against "control" villages where no reform was implemented.
Understanding how different institutional arrangements affect these outcomes which are considered key drivers of economic growth is important because, with this knowledge, policy- and rule-makers can better design institutions that facilitate market exchange and promote social welfare.
The overall objective is to improve our understanding of how institutions affect culture in order to provide useful information that can be exploited during the process of institutional change.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

During the period December 2019-March 2019, it has been performed a fieldwork data collection employing social science experiments regarding the following variables: trust and cooperation with strangers; preferences for redistribution; altruism; risk preferences; land related litigation and conflicts experienced; moral preferences for utilitarianism vs. deontologism (using the "Moral Machine Experiment"). In addition, survey data has been collected regarding socio-demographic characteristics and asking questions taken from the World Value Survey.
The fieldwork was performed in the Beninese villages included in the RCT and involved 576 subjects in 32 villages. In each village an experimental laboratory was built to make possible to run controlled experiments on decision-making. In parallel, a team of local data collector run the survey.

The main findings and results achieved so far can be summarized as follows:
1) Formalized property rights increase trust and cooperation with strangers outside the close-knit circle of kith and kin.
2) Formal property increases utilitarian moral choices.
3) Formal property rights increases the acceptance of inequality generated by luck, but not by merit.
4) Formal property rights reduce stealing from unknown strangers.
5) Land rights formalization increases land-related (non-violent) litigation.
6) In the analysis above, o differential effect has been identified across genders. Further analysis is currently investigating whether there was a differential impact in some ethnic groups where gender discrimination in the pre-reform period was stronger or weaker.

The following writing or the articles and dissemination of results took several avenues.
1) All the articles and data have been published and can be accessed for free through Gold Open Access publication or through the Social Science Research Network.
2) The preliminary results have been circulated to the scientific community via several conference participation, invited seminars and presentations at national and international universities (among others, Tel Aviv University; Maastricht University; Bologna University; Pompeu Fabra University; Lijubiana University; Erasmus University Rotterdam; Boston University; Aarhus University; University of Barcelona).
3) The findings from this project have been taught during invited lectures held at the European Master in Law and Economics.
4) The findings from the project has been integrated in the curriculum and taught during the academic year 2020/2021 in the Master in International Economics, course "Institutions, Organizations, and Markets" at University Pompeu Fabra Barcelona.
5) While it was impossible to organize face-to-face fora with the civil society in Benin due to the pandemic situation, I managed to coordinate with Prof. Roch Mongbo of the NGO CEBEDES and with Anne Floquet, the co-director of the Gender Innovation Lab in Cotonou (Benin) to further the investigation of the gender dimension of the research and to activate initiative for the dissemination of the results that we plan to develop in late 2021/beginning of 2022.
6) While it was not possible to held the public audition with the Benin Ministry of Justice and Legislation due to the pandemic situation, we reached an agreement to deepen the investigation regarding the effects of the reform on land-related conflicts and litigation. Specifically, the ministry have authorized myself and prof. Arrunada from University Pompeu Fabra to access historical records regarding reported crimes in the villages included in the PFR. We are currently working on the data collection and will inform the policymakers of the results in the upcoming months.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

Empirical studies attempting to isolate the causal effects of institutions on cultural traits face a major challenge—to identify institutional changes that are exogenous to cultural evolution. Individuals choose institutions reflecting their preferences. At the same time, those institutions shape people’s values and beliefs. These endogeneity and “reflection” issues make finding a suitable identification strategy to estimate the effects of institutions on culture difficult. My project isolates the causal effects of formal institutions on a set of cultural variables by adopting a research design that overcomes most of the limitations characterizing existing approaches.
The findings clearly show that different types of institutional arrangements, and property rights in particular, have a causal influence on agents' culture. These effects in my project have been identified already after a ten-year period of exposure to the new institutional setting, while previous studies mostly focused on changes in preferences and moral values that take place across generations.
There are several socio-economic implications of these findings. The reduction of parochialism in trust and cooperation is a pre-condition for the creation of impersonal markets that expand the possibility of exchange and make possible to achieve gains from trade.
Furthermore, understanding the consequences of implementing land tenure reforms and property rights formalization programs in terms of conflicts and increased acceptance of inequality is crucial to overcome or counteract possible negative side-effects of the reforms. For instance, potential problems related to the increase in litigation after the reform could be prevented by including a mechanism to clear pre-existing pending or latent conflicts before the formalization process. Similarly, the policymaker can prevent possible problems deriving by the erosion of the informal social safety nets and enact in parallel to the land titling reform also a formal social security system.
Finally, the empirical literature on the origins of moral values have identified important differences across cultures in moral traits but there are only hypothesis regarding the causal determinants. My results are among the first to shed light on these causal factors.

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