How does cultural diversity affect social organization? Do institutional differences between diverse and homogeneous communities have implications for economic development? This paper argues that heterogeneity not only impedes informal mechanisms of cooperation, but also increases demand for formal institutions. Greater reliance on formal law and public authority, in turn, facilitates economic development by enabling arm’s length transactions and encouraging entrepreneurship.

Property rights are important for economic exchange, but in much of the world they are not publicly guaranteed. Private market associations can fill this gap by providing an institutional structure to enforce agreements, but with this power comes the ability to extort from group members. Under what circumstances do private associations provide a stable environment for economic activity?

We use evidence from Afghanistan to illustrate how political instability and the absence of meaningful political constraints enables the predatory state. Foreign aid and foreign military intervention amplify the wealth-destroying features of political institutions.

I examine how matrilineal relative to patrilineal kinship systems affect spousal cooperation. In matrilineal kinship systems, lineage and inheritance are traced through women.

Land ownership in the United States extends below ground, whereas most governments retain subsurface ownership. Which system generates greater resource use?

Why do developing countries fail to adopt the institutions and policies that promote development? Our answer is the violence trap. The trap is set by the unavoidable interdependence of economic and political development.

This paper analyzes how British colonial rule altered the club-like and competitive features of chiefdoms and weakened the incentives of political leaders to be accountable to citizens.

Governments continue to be concerned about kidnapping as a source of terrorist finance. A host of international commitments, underpinned by UN Security Council Resolutions and domestic laws, forbids the commercial resolution of terrorist-related kidnappings and prevents governments from making concessions to terrorists.