The Conceptual Framework: Collective Action, Trust, Culture, and Ideas

This chapter completes the theoretical framework of the book by juxtaposing institutional economics with the literature on the collective action problem, social norms, culture, and ideas. It discusses the foundations of the collective action problem and the role of institutions—formal (laws) and informal (social norms)—in overcoming it. It links these studies with those on social capital, civicness, and the origins of generalized inter-personal trust. It criticizes the view—frequent in analyses of Italy—that a society’s culture is an independent obstacle to its development, and argues conversely that institutions, civicness, trust, and culture are part of the extant social order, and co-evolve. It ends with a discussion of the role of ideas, which are freer from the grip of the extant equilibrium and can lead elites, distributional coalitions, and ordinary citizens and firms to revise their assessment of their own interests and support efficiency-enhancing reforms.