Last updated on April 28, 2013
Economists are generally suspicious of explanations for behavior relying on culture. This likely stems from the fact that individual rationality, whose twin assumptions of completeness and transitivity constitute the cornerstone of economics and of much of modern social science, are not context-dependent.
The typical economist’s skepticism regarding culture as an explanation for behavior also stems from the fact that most economists fundamentally believe a human being is a human being the world over, and only economic circumstances change to provide a different set of incentives, which themselves explain variations in behavior. It is in that sense that no matter what its critics might say, economics remains very much a humanistic discipline.
Not only is invoking culture as an explanation for behavior the hallmark of lazy thinking, it is also unscientific. A few weeks ago, Frances Woolley wrote:
In China, there are six boys born for every five girls; the result of an age old preference for sons combined with widespread use of sex selection technology.
It’s tempting to ascribe son preference to culture and leave it at that. However, for an economist, “culture” is a lousy explanation. It has only trivial predictive value. Will the preference for sons persist over time, or will it gradually fade away? Cultural explanations cannot say: culture simply is what it is.
Another problem with “culture” is that it can explain anything. People in Uttar Pradesh select for sons? “It must be their culture. People in Kerala don’t select for sons?” Since “culture” is compatible with any conceivable set of facts, it is not falsifiable.
And, as per Karl Popper, an explanation that is not falsifiable is not scientific.
For the longest time, I shared the stance toward culture I describe above. But then, in preparing the corruption and governance module of my development seminar, I read Fisman and Miguel’s famous article on the parking tickets accrued by UN diplomats in New York City (see here for an ungated copy):
We study cultural norms and legal enforcement in controlling corruption by analyzing the parking behavior of United Nations officials in Manhattan. Until 2002, diplomatic immunity protected UN diplomats from parking enforcement actions, so diplomats’ actions were constrained by cultural norms alone. We find a strong effect of corruption norms: diplomats from high‐corruption countries (on the basis of existing survey‐based indices) accumulated significantly more unpaid parking violations. In 2002, enforcement authorities acquired the right to confiscate diplomatic license plates of violators. Unpaid violations dropped sharply in response. Cultural norms and (particularly in this context) legal enforcement are both important determinants of corruption.
In other words, before 2002, when UN diplomats did not have to pay their parking tickets, a Bangladeshi diplomat,* acting like a textbook homo economicus, would almost never pay her parking tickets. But surprisingly, a Finnish diplomat, acting completely unlike homo economicus, would almost always pay his parking tickets. In other words, diplomats would “import” their cultural norms vis-à-vis corruption.
The Fisman and Miguel paper got a lot of media attention, because it contained a cool, well-identified finding. But I think it did not nearly get the attention it deserved for convincingly making the point that culture, although often used lazily as an explanation for behavior, is not as useless as most economists would like it to be.
* My examples were not selected at random, as they come from the most and least corrupt countries per the 2002 corruption perceptions index.
Is Culture Useless as an Explanation for Behavior?
Last updated on April 28, 2013
Economists are generally suspicious of explanations for behavior relying on culture. This likely stems from the fact that individual rationality, whose twin assumptions of completeness and transitivity constitute the cornerstone of economics and of much of modern social science, are not context-dependent.
The typical economist’s skepticism regarding culture as an explanation for behavior also stems from the fact that most economists fundamentally believe a human being is a human being the world over, and only economic circumstances change to provide a different set of incentives, which themselves explain variations in behavior. It is in that sense that no matter what its critics might say, economics remains very much a humanistic discipline.
Not only is invoking culture as an explanation for behavior the hallmark of lazy thinking, it is also unscientific. A few weeks ago, Frances Woolley wrote:
And, as per Karl Popper, an explanation that is not falsifiable is not scientific.
For the longest time, I shared the stance toward culture I describe above. But then, in preparing the corruption and governance module of my development seminar, I read Fisman and Miguel’s famous article on the parking tickets accrued by UN diplomats in New York City (see here for an ungated copy):
In other words, before 2002, when UN diplomats did not have to pay their parking tickets, a Bangladeshi diplomat,* acting like a textbook homo economicus, would almost never pay her parking tickets. But surprisingly, a Finnish diplomat, acting completely unlike homo economicus, would almost always pay his parking tickets. In other words, diplomats would “import” their cultural norms vis-à-vis corruption.
The Fisman and Miguel paper got a lot of media attention, because it contained a cool, well-identified finding. But I think it did not nearly get the attention it deserved for convincingly making the point that culture, although often used lazily as an explanation for behavior, is not as useless as most economists would like it to be.
* My examples were not selected at random, as they come from the most and least corrupt countries per the 2002 corruption perceptions index.
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Published in Commentary, Culture, Economics and Social Sciences