Culture, Politics, and Economic Development

Abstract

For a generation, political science has been dominated by the analysis of interests within the framework of rational choice. Although this has enabled major advances, it struggles to provide a plausible analysis of many instances of sociopolitical dysfunction. This article reviews recent innovations in economics, psychology, and economic history that are converging to rehabilitate culture as a legitimate element of analysis. Culture matters, and its evolution is amenable to formal scientific analysis. But these processes need not be benign: There is no equivalent to the invisible hand of the market, guiding a culture toward social optimality. An organizational culture can trap a vital public agency, such as a tax administration, into severe dysfunction. A societal culture can trap an entire country into autocracy or poverty.