International Trade and the Persistence of Cultural.pdfVIP

International Trade and the Persistence of Cultural- Institutional Diversity Marianna Belloc Samuel Bowles SFI WORKING PAPER: 2009-03-005 SFI Working Papers contain accounts of scientific work of the author(s) and do not necessarily represent the views of the Santa Fe Institute. We accept papers intended for publication in peer-reviewed journals or proceedings volumes, but not papers that have already appeared in print. Except for papers by our external faculty, papers must be based on work done at SFI, inspired by an invited visit to or collaboration at SFI, or funded by an SFI grant. ©NOTICE: This working paper is included by permission of the contributing author(s) as a means to ensure timely distribution of the scholarly and technical work on a non-commercial basis. Copyright and all rights therein are maintained by the author(s). It is understood that all persons copying this information will adhere to the terms and constraints invoked by each authors copyright. These works may be reposted only with the explicit permission of the copyright holder. SANTA FE INSTITUTE International Trade and the Persistence of Cultural-Institutional Diversity§ * ** Marianna Belloc and Samuel Bowles February 21, 2009 Abstract Cultural and institutional differences among nations may affect the ratios of marginal costs of goods in autarchy and thus be the basis of specialization and comparative advantage as long as these differences are not eliminated by trade. We provide experimental and historical evidence motivating a model of the joint dynamics of preferences and institutions under autarchy and trade. We show that: i) spe