Climate Risk, Cooperation and the Co-Evolution of Culture and Institutions

Recognition Program

Open Access       

Authors: Johannes C. Buggle and Ruben Durante

The Economic Journal, Vol. 131, No 637, 1947-1987, July, 2021

This paper examines the relationship between economic risk and the evolution of social cooperation. We hypothesise that trust developed in pre-industrial times as a result of experiences of cooperation aimed at coping with climatic risk. We document that European regions with higher pre-industrial climatic variability display higher levels of trust today. This effect is driven by variability in the growing season months and is more pronounced in agricultural regions. Regarding possible mechanisms, our results indicate that climatic risk favoured intercommunity exchange and the early adoption of inclusive political institutions which is associated with higher quality of local governments today.

This paper is acknowledged by the Barcelona School of Economics Recognition Program