Paper #822

Title:

Human nature and institutional analysis

Author:

Benito Arruñada

Date:

March 2005 (Revised: September 2008)

Abstract:

This essay reviews some findings in cognition sciences and examines their consequences for the analysis of institutions. It starts by exploring how humans’ specialization in producing knowledge ensures our success in dominating the environment but also changes fast our environment. So fast that it did not give time to natural selection to adapt our biology, causing it to be potentially maladapted in important dimensions. A main function of institutions is therefore to fill the gap between the demands of our relatively new environment and our biology, still adapted to our ancestral environment as hunter-gatherers. Moreover, institutions are built with the available elements, which include our instincts. A deeper understanding of both aspects, their adaptive function and this recruitment of ancestral instincts, will add greatly to our ability to manage institutions.

Keywords:

Evolution, biology, behavior, institutions

JEL codes:

D01, D02

Area of Research:

Management and Organization Studies

Published in:

New Institutional Economics: A Guidebook, Cambridge University Press, E. Brousseau and J.-M. Glachant, eds., Cambridge, 2008, pp. 81-99

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