Culture

A number of empirical studies confirm that culture is an important mechanism that helps explain why historical shocks can have persistent impacts; these are reviewed here. As an example, I discuss the colonial origins hypothesis (Acemoglu, Johnson and Robinson, 2001), and show that our understanding of the transplantation of European legal and political institutions during the colonial period remains incomplete unless the values and beliefs brought by European settlers are taken into account. It is these cultural beliefs that formed the foundation of the initial institutions that in turn were key for long-term economic development.

That is from the very interesting paper "Culture and the historical process" by Nathan Nunn. 

The author argues that there are historical shocks that shape culture, those episodes affect the way societies make choices. His examples are fascinating!

The author claims:

. . . [i]ndividuals from different cultural backgrounds make systematically different choices even when faced with the same decision in the same environment. 

HT: Matthew Baker