The origins of culture and institutions, how these forces interact, and the effect this interaction has on economic outcomes
Devesh Rustagi is an Assistant Professor in Economics. He is also a Senior Fellow at the Center for Development Research (ZEF), Bonn University.
Often students are surprised to hear that culture matters and that it is economics!
What are your research interests?
I am interested in understanding the origins of culture and institutions, how these forces interact, and the effect this interaction has on economic outcomes. I then build on these insights to design and evaluate organisational forms and policies that foster economic development. My work combines behavioural experiments with quasi-experimental methods and randomised field experiments to answer these questions. For example: does self-governance foster cooperation? How do markets affect our values? Does honesty matter for product quality in markets? My projects are based in Ethiopia, Germany, India, Switzerland, and the United Kingdom.
What is the impact of your research?
My research work in Ethiopia was covered by the World Bank in their World Development Report to highlight the importance of behavioural approaches to development economics. One of the papers from this list also appears on the list of highly cited papers in the Web of Science index. To make this impact reach the policy makers on ground, I would need to carry out randomised control trials with implementing agencies in the field. I have now begun to conduct these in India and Germany on the role of empathy and memorials in mitigating discrimination.
How does you research influence your teaching?
I teach courses that involve discussing in detail the origins of differences in culture and the effect this has on economic outcomes. Often students are surprised to hear that culture matters and that it is economics! But, having an in-depth research experience on this topic allows me to start with rich anecdotal evidence that could excite students from different backgrounds and nationalities. Once the intuition is clear, it is easier to teach different techniques necessary to measure culture and draw causal inference.
What are the challenges in your field?
Culture and institutions are endogenous, so studying their causal effect on outcomes is very difficult. Researchers often rely on a combination of historical events and geographical peculiarities to achieve this. So far, the outcomes are restricted to contemporaneous periods, but now there is a growing demand to track outcomes over a longer period. In addition, understanding of mechanisms via which these effects unfold is often murky, as such data are not easily available. There is a need for policy experiments, which would allow researchers to design their own study and collect the data of their choice. This would bridge the gap in studying the role of underlying cultural norms and institutions.