Economic Research on Identity, Norms and Narratives (ERINN)

To escape poverty, all societies need key state institutions to function properly. The countries of the 'bottom billion' are stuck in poverty partly because although they all have agencies which purport to perform these functions, in practice they are severely dysfunctional. For example, tax inspectors pocket money for themselves instead of raising money for the state; judges and police take bribes to subvert justice; port and energy authorities are captured by special interests; teachers do not turn up for class. While this has been known for many years, social science has lacked a rigorous analytic framework within which it can be understood. Interventions based on the principal-agent model of rewards and punishments have proved difficult to implement and have had very limited success.

The aim of this project is to construct a new economics that embodies how people think, which, in turn, affects how organisations function. One way to characterise human thinking is that we think in terms of ‘narratives’. Fundamental to sociology is the notion that we are motivated by the stories we are telling ourselves at the time of our decisions. Identity and norms are at the heart of those narratives, since they centre on who the protagonist thinks she (and others) is (their identities), and what she (and others) think they should do (their norms).

The project will develop a new analytic framework in which these ‘social constructs’ (identity, norms and narratives) play a critical role in understanding determinants of the functionality of public organisations. A key component of this project is a global network of scholars who are engaged in developing a coherent research programme with a particular focus in sub-Saharan Africa and in engaging in dialogue with policy practitioners in African countries. Work will include fieldwork piloting new approaches for organisational reforms which can be rigorously evaluated, establishing new measures of identities, norms, and narratives, how they emerge and evolve within social networks, and designing policy tools can be used to target dysfunctional organisational norms.

Executive Committee

George Akerlof (Berkley); Robert Akerlof (Warwick); Paul Collier (Oxford); Stefan Dercon (Oxford); Rachel Kranton (Duke); Denis Snower (Kiel)