Cultural Transmission in the Long, Long Run: Evidence from a Natural Experiment
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We conduct a standard public goods game in three towns in the Indian state of Rajasthan. These towns were assigned to opposite sides of a colonial border separat- ing British India from the Princely States. One town fell on the British India side of the border on account of military conquest, unrelated to any geographic or commercial advantages. We find that participants of the former Princely State town make lower contributions to mixed groups composed of two home town participants and two partic- ipants from the British India town. More importantly, we find these effects are driven by participants with strong family ties to the town, either their parents or grandparents are from the town. We believe these differences reflect institutional differences in the presence of outsiders and local governance between the Princely States and British In- dia in Rajasthan, and that the historical exposure to such institutions has been passed down through the generations.
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