6/1/98

CONTACT: Kathleen O'Toole, News Service (650) 725-1939;
e-mail kathleen.otoole@stanford.edu

Stanford economist Avner Greif among 29 MacArthur fellows

Stanford economist Avner Greif is among 29 MacArthur Fellows announced by the John D. and Catherine T. MacArthur Foundation on Monday, June 1. All will receive fellowships that range from $220,000 to $375,000 over five years depending upon the age of the recipient. The program, which began in 1981, seeks to foster lasting improvements in the human condition by selecting talented individuals in a variety of fields for the no-strings-attached grants.

Greif, age 42, is an Israeli citizen who joined the Stanford faculty as an assistant professor in 1989 after receiving a doctorate in economics from Northwestern University. In announcing his selection, the foundation said his work has led to "greater understanding of the institutional evolution and the conditions that lead to social conflict or cooperation." Using game theory and other modeling techniques, he has shown "how beliefs, institutions and other social ties, which appear to be randomly connected, are in fact linked to cultural norms of trust and reciprocity."

Asked how he would use his grant, which is $265,000, Greif, an associate professor of economics, said he would like to "buy some spare time to get additional tools and exposed to different knowledge that can enhance one's research."

His work demonstrates why it is not wise to study economics in isolation from social and political aspects of a society. So the money from the grant represents to him a chance to spend more time reading about and meeting with other social scientists who might be collaborators on future projects, as well as time to learn more languages. "The more languages you know, the better equipped you are to understand phenomena," he said.

He also will use some of the money to travel to archives abroad, especially those in the Mediterranean region, to conduct economic history research on late medieval Italian city states that were the early bearers of a republican or semi-democratic political system in modern Europe. "I haven't traveled too much in recent years because my wife, Estee, and I have three children (ages 14, 12 and 3), which has made it pretty tough to go for any length of time," he said. Now, he can afford to take the family with him.

Greif became interested in economic history as an undergraduate at Tel Aviv University, where, under the supervision of Moshe Gil he wrote his master's thesis on the Maghribi traders, late medieval Jewish merchants who operated in the Muslim Mediterranean and who kept detailed records of their business dealings. Later at Northwestern University under the supervision of Joel Mokyr, Greif learned new tools of game theory and applied them to study the institutions that facilitated agency relations among the Maghribi traders. A natural extension of the study was to compare Maghribi institutions with those that prevailed on the European side of the Mediterranean. That led him to Genoa, Italy, where there were records from Genoese traders who dominated the Mediterranean Sea at a slightly later time.

What emerged from his comparisons of the two groups of merchants had an explosive impact on academic economists. About that time, many of them were beginning to see the difficulties of importing market economies to former Communist bloc countries. Greif's work on the Middle Ages was hinting at why.

Among the Maghribis and the Genoese, distinct initial cultural beliefs led to the emergence of distinct institutions to govern agency relations ­ the relationships between merchants and the agents they relied upon to represent them in distant locations. These institutions or practices, in turn, reinforced the underlying cultural beliefs, further reinforcing the institutional differences and launching the societies on very different trajectories.

Greif is sometimes asked by such organizations as the World Bank to apply his insights to the modern world ­ the institutional foundations of growth in Asia, for example, or the failure of some types of market institutions in the Soviet Union.

"My research shows the necessity of deep knowledge" in analysis of any social-political-economic system, he said. The MacArthur Fellowship will help him gain deep knowledge of more situations, he said, but it will take many scholars, reading each other's work and teaming up on projects, to make the lessons of history into better prescriptions for the future.

-30-

A color photo of Avner Greif is available on the Stanford News Service ftp site. The address is: ftp://36.15.0.227/images/Greif.tif.

By Kathleen O'Toole