Total Factor Productivity and Social Cooperation: Theoretical Framework and Tentative Empirical Analysis

Abstract

The paper develops the ideas centered around the proposition that high total factor productivity (TFP) is conducive to social cooperation by drawing the interests of economic and, in more general terms, social agents together. In the first part of the paper, a simple theoretical framework is presented that leads to a typology of social orders which is based upon the stimuli of social agents for cooperation and predation. In the second part, a tentative empirical analysis is conducted (panel-data regression with fixed effects) which provides a crude testimony for the plausibility of the theoretical claim that high TFP is associated with cooperation-fostering institutions. The third part of the paper elaborates on the results of empirical analysis and presents some further hypotheses which are concerned with two quite different subject-matters: on the one hand, with the role of TFP as a possible factor of social cooperation; on the other hand, with the typology of social orders proposed by North, Wallis and Weingast in their “Violence and Social Orders”. The latter theme is integrated in the discussion about TFP, cooperation and predation