The moral economy of communities: Structured populations and the evolution of pro-social norms

Why do communities persist despite their inability to exploit the efficiency-enhancing properties of markets and the advantages of universal enforcement of rules provided by states? One reason is the capacity of communities to foster cooperative behavior. Communities align the individual and collective benefits and costs of people's actions. We model three mechanisms by which communities raise the net benefits to individual prosocial behaviors: reputation, retaliation, and segmentation. Unlike most treatments of the evolution of group-beneficial traits our communities promote pro-social behaviors in the absence of group selection, We further show that the restricted mobility associated with communities (parochialism) enhances these mechanisms, Communities are thus specifically adapted to settings that make formal property rights systems untenable and preclude the efficient centralized determination of outcomes. (C) 1998 Elsevier Science Inc.