The Origins of Culture

Abstract

We develop and test a theory of the origins of norms of cooperation. In our model, time-inconsistent elites can entice the non-elites to cooperate in a joint investment by enacting a more inclusive political process, which entrusts to the non-elites the control over fiscal policies. The non-elites, instead, can accumulate an intrinsic reward from cooperating in either investment or an alternative risk-sharing activity, which, in turn, assures a larger marginal intrinsic return. When investment is unfeasible because the output value is too small, the non-elites accumulate a culture maximizing the risk-sharing payoff. When the output value is small but not tiny, cooperative investments prevail only if the elites grant to the non-elites strong political rights to convince them that a sufficient part of the investment return will be shared via public good provision and the non-elites accumulate the optimal culture, which is weaker than the intrinsic return on risk-sharing. When the output value is large, the elites elicit cooperation under autocracy and cultural accumulation is optimal. These predictions are consistent with novel data on 44 major Mesopotamian polities observed for each half-century between 3050 and 1750 BCE. Crucially, the message of our analysis remains similar across several identification strategies.