New Books Network Avner Greif et al., "Two Paths to Prosperity: Culture and Institutions in Europe and China, 1000–2000" (Princeton UP, 2025)
Apr 2, 2026
Guido Tabellini, economist and Bocconi vice president, co-author of Two Paths to Prosperity. He contrasts European corporations and Chinese clans. He explains how fragmentation, law, and associations shaped institutions. He links corporate organization to innovation and traces cultural roots in family and religion shaping cooperation.
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Great Divergence Framed As Institutional And Cultural Reversal
- The Great Divergence is a reversal where China, once ahead around year 1000, stagnated while Europe later surged economically and politically.
- Guido Tabellini links this divergence to differences in political institutions, social structures, family patterns, and culture rather than solely geography.
Corporations Versus Clans Shaped Local Cooperation
- Local public goods needed where states were weak, so both Europe and China relied on non-state organizations to provide protection, risk sharing, dispute resolution, and education.
- Europe formed associations of unrelated individuals (corporations) while China organized around patrilineal clans, shaping divergent institutional paths.
Church Policy Enabled Corporations By Weakening Kinship
- The medieval Church deliberately weakened extended family ties in Europe, promoting nuclear families and universalistic values that enabled cooperation among strangers.
- That cultural shift fostered fraternities, guilds, monasteries, and self-governing towns which became early corporations.
