Cultural interaction and economic development: An overview |
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| Affiliation: | 1. Department of Economics, Ben Gurion University, CEPR, CESifo, IZA, Israel;2. School of Economics and Business Administration, Ruppin Academic Center, Israel;1. University of Magdeburg, Halle Institute for Economic Research, Germany;2. Halle Institute for Economic Research (IWH), Germany;3. University of Halle-Wittenberg, Halle Institute for Economic Research, Germany;1. Wake Forest University, USA;2. Saint Louis University, USA;1. Paris School of Business, 59 Rue Nationale, 75013, Paris, France;2. University of York, UK;1. University of Basel, Faculty of Business and Economics, Peter Merian-Weg 6, 4002 Basel, Switzerland;2. Bruegel, Brussels, Belgium;3. University of Chicago, Booth School of Business and University of Basel, Faculty of Business and Economics, USA |
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| Abstract: | The rising scope and intensity of interaction between culturally polarized populations in a variety of political contexts has led to the emergence of a growing body of research on the reciprocal relationship between cultural interaction and economic development. This paper offers a brief overview of this literature. It first describes the multiple channels through which cultural divisions and economic development interact. Then, motivated by these observations, it presents a theoretical framework that highlights the scope for welfare-improving policy interventions in education, immigration policy and ethnic autonomy; surveys empirical evidence on such policies; and suggests directions for further research. |
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