Cultural doorways in the barriers to development

Abstract We develop novel indices of cultural similarity among ethnic groups derived from their oral traditions. We find that variation in these indices significantly affects currently observed pairwise disparities in income per capita, even after controlling for measures of geo-climatic, historical, religious, and linguistic barriers. We also propose an empirical exploration of the mechanisms linking folklore similarities to income differences. These findings lend support to the relevance of knowledge, information and technological transfers across people and societies in the diffusion of development.