Cultural Assimilation and Nation Building

We present a model of nation building in which individuals balance the expected coordination benefit from “fitting in” against the opportunity cost of foregoing behaviors prescribed by their intrinsic cultural values. Cultural values allow individuals to resolve strategic uncertainty, and endogenous, partial, cultural assimilation emerges in the unique equilibrium of the model. We contrast assimilationist and bicultural policies pursued by an office-seeking politician with those of a planner and show that policy prescriptions sometimes diverge. Our analysis tempers traditional arguments for nation-building agendas and generates testable predictions that speak to historical episodes of nation building.