Homogeneity and Cooperation

6 August 2008 at 9:10 am Peter G. Klein 11 comments

| Peter Klein |

Why are Scandinavians so cooperative? Nicolai and Lasse might suggest it’s their superior moral character. La Porta et al. (1997), Putnam et al. (1992), and others point to Protestantism: hierarchical religions like Catholicism and Islam, it is argued, tend to discourage trust and retard the development of social capital. The Protestants, who already have Max Weber in their corner, seem to be piling it on.

Not so fast, says Kevin O’Rourke in a recent paper, “Culture, Conflict, and Cooperation: Irish Dairying Before the Great War” (Economic Journal, October 2007). O’Rourke compares the Danish and Irish dairy industries before 1914 and argues that cultural and ethnic homogeneity, not religion, explains the success of Danish cooperatives. Unlike recent large-sample econometric work on trust, the paper uses deeper, more robust indicators of cooperation. Key findings:

At first sight, the contrast between Protestant Ulster and the Catholic South (as well as between Denmark and Ireland as a whole) seems a striking confirmation of the LLSV hypothesis that culture matters for the ability to cooperate, and that hierarchical religions such as Catholicism undermine both trust and cooperation. However, on closer examination it appears that politics, not culture, was responsible for the lower Irish propensity to cooperate. Suspicion between Catholics and Protestants, and tenants and landlords, spilled over into Nationalist suspicion of the cooperative movement and hindered its spread, despite the efforts of the [Irish Agricultural Organisation Society] to remain apolitical. To this extent, the results are more consistent with the stress on [ethnolinguistic fractionalisation] in Alesina and La Ferrara (2000) than with the cultural perspective of LLSV, Knack and Keefer (1997) and Zak and Knack (2001).

Denmark benefited from several relevant advantages that Ireland did not enjoy during this period. In particular, it was an extremely homogeneous country, ethnically, religiously and linguistically. There was no conflict over who should own the land, since land reform in Denmark had been underway since the late eighteenth century. . . . Nor was there any ethnic conflict, or disputes over where national boundaries should lie (all such controversies became redundant following the loss of Schleswig-Holstein in 1864). The results suggest that this homogeneity of Danish society is what explains the success of cooperation there.

Entry filed under: - Klein -, Business/Economic History, Food and Agriculture, Institutions, New Institutional Economics, Theory of the Firm.

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11 Comments Add your own

1. josephlogan | 6 August 2008 at 9:30 am

Homogeneity sounds right, though I must confess a grudging suspicion that superior moral character fits in there as well. It makes intuitive sense that homogeneity would give rise to both cooperation and groupthink; that is, I’m more likely help people like me and also more likely to think like them. It’s fairly clear, though, that these collaboratives have limits on their scalability, which also lends credence to the homogeneity argument.
2. MomentarilyAnonymous | 6 August 2008 at 2:44 pm

I was wondering, in what way is Islam hierarchical?
3. Peter Klein | 6 August 2008 at 2:51 pm

O’Rourke seems to be following La Porta et al. (1997), who define their “hierarchical religion” variable as the percent of each country’s population that is Roman Catholic, Eastern Orthodox, or Muslim. They provide a referene for the raw data, but not for the classification scheme.
4. MomentarilyAnonymous | 6 August 2008 at 3:10 pm

It’s a bit presumptive of Le Porta et al. (1997) to classify Islam as a hierarchical religion because, simply, it is not. I guess what they wanted to imply is that most Muslims nowadays are hierarchically inclined or have some other characteristic that erodes trust. This may be true but it seems really difficult to relate this to their religion or any interpretation of it (except modern Shia Islam as practiced in Iran). Especially considering your previous post on the Maghribi Traders.
5. Kevin Carson | 6 August 2008 at 4:01 pm

Even ethnically and religously heterogenous societies like America are made up of homogenous building blocks: ethnic neighborhoods, counties that tend to have a single predominant religious denomination, and so forth.

More to the point (although you’d expect me to say as much), if it weren’t for the role of the state in promoting economic centralization and demographic mobility, and socializing the expense of many of the security mechanisms for large, anonymous markets, I’d expect such locally homogenous communities to provide the social base for trust networks. We’d see at least a partial return to the old Main Street business culture, where people engaged in repeat business with those they knew by reputation, and networks of suppliers and outlets tended to overlap the social network.

Org theory blogger quasibill writes a lot on this theme.
http://the-bell-tower.blogspot.com/2008/06/function-follows-form-or-vice-versa.html
6. Michael F. Martin | 6 August 2008 at 9:07 pm

Might there not be some question-begging in the claim by O’Rourke? How has he defined homogeneity?

If the answer is that homogeneity means the absence of ethnic tensions, then isn’t that equivalent to saying the presence of non-ethnic cooperation?
7. Lasse | 7 August 2008 at 5:36 am

I’d love to hear from someone from Belgium on this issue
8. Cliff Grammich | 7 August 2008 at 10:53 am

MomentarilyAnonymous–Glancing at the LaPorta et al. paper (which I had not seen before–so, for neither the first nor last time, I may be all wet), it appears the authors use the World Values Survey to classify societies. Inglehart, one of the PIs for the WVS, does classify societies by variables that could indeed help analysts identify which societies “discourage trust and retard the development of social capital.” In these classifications, “Catholic” societies do form one grouping, “Protestant” another, “Muslim” another, etc. But the distinction isn’t “hierarchical” religion. Rather,. it’s “traditional” values versus “secular-rational” ones on one axis, and “survival” values versus “self-expression” ones on the other. For a, um, longer “Cliff’s Notes” type discussion of this, see http://margaux.grandvinum.se/SebTest/wvs/SebTest/wvs/articles/folder_published/article_base_54.

Kevin Carson–Interesting point about “ethnically and religously heterogenous societies like America [being] made up of homogenous building blocks.” There’s a nice set of maps (based on data I help collect) that might interest you at http://www.valpo.edu/geomet/geo/courses/geo200/religion.html, especially the one at http://www.valpo.edu/geomet/pics/geo200/religion/church_bodies.gif. I’ve always been impressed how divisions of the mid-19th century still appear in the early 21st Century. See, for example, divisions between Baptists and others in Virginia and West Virginia as well as in Missouri and surrounding states. The effects of religious homogeneity are (like many other things discussed on this blog) a bit beyond my own expertise, but your comments brought to my mind a paper by Ellison et al. (http://tinyurl.com/54rgnr) on the inverse relationship between religious homogeneity and suicide rates. I’m less sure about how well religious homogeneity can help build trust networks, especially if Finke and Stark (and others) are right about religious markets (and growth occurring among religious bodies making themselves distinct).
9. David Hoopes | 7 August 2008 at 4:03 pm

Do the vikings count as cooperative because they coordinated their efforts or were they not cooperative because they robbed and killed their Gaelic, Saxon, and Anglican neighbors? Oops I forgot they also founded Russia (Kiev!). Cooperative (part of a new state) or not cooperative (conquering the poor Slavs).
10. Kevin Carson | 8 August 2008 at 12:42 am

Cliff: That’s an *amazing* map. Coincidentally, what I had in mind when I wrote that was, among other things, a claim by (of all people) the Calvinist theocrat Rousas Rushdoony that a large number of American counties had a majority of the same religious denomination or ethnic group.
11. Cliff Grammich | 8 August 2008 at 7:18 am

Kevin, when did Rushdoony make that claim? I think “majority” might be overstating things, although saying “preponderance” (short of a majority) might be accurate. Maybe I’m splitting hairs. But note the map of leading religious groups indicates relatively few counties in which the leading group comprises a majority. I suspect we all overestimate the prevalence of others like us. I vaguely remember somebody (Greeley?) finding Chicago South Side “Irish” neighborhoods had not been nearly as “Irish” as those who were raised in them recalled them being.

There have also been some changes in the map of religious change over time. Comparing the 2000 maps with earlier versions (none that I can find online, unfortunately), shows the Mormon expansion in the West may be starting to be checked by Hispanic (and Catholic) population growth. I also know that the southern half of California has become much more Catholic in recent decades, thanks both to Hispanic population growth and immigration. Finally, there have also been what I consider to be some interesting changes in Catholic growth in the South in recent decades (see http://www.frinstitute.org/southern.htm, especially Map 1, showing increase in percent Catholic by county from 1971 to 2000).

Anyway, maybe I’ll suggest Prof. Kilpinen at Valpo put together some dynamic maps. Or maybe I’ll see if I can convince the Glenmary Research Center to post some . . .