Paper #1885

Title:

The medieval church and the foundations of impersonal exchange

Authors:

Benito Arruñada and Lucas López-Manuel

Date:

April 2024

Abstract:

By refining the moral code and enforcing it through the new 'mendicant' orders, the Church of the 13th century laid the cognitive, interpersonal, and institutional groundwork for large-scale cooperation based on one-shot transactions between strangers. However, net outcomes at these three levels stem from opposite-sign effects coherent with the specialization of specific branches within the Church: while exposure to Dominicans had positive effects on traits favoring impersonal exchange, consistent with their emphasis on rationality, exposure to Franciscans had negative effects, related to their emotionality, and favoring personal exchange. Moreover, the effects of exposure to the secular clergy were insignificant. Our causal identification relies on refuting multiple confounders, comparing second-generation migrants, and leveraging withincountry differences in mendicants'exposure in Europe and Mesoamerica.

Keywords:

Cultural change, values, institutions, religion, Catholic Church, persistence, Late Middle Ages

JEL codes:

O10, Z12, Z13

Area of Research:

Business Economics and Industrial Organization

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