In Ecuador we bullfight with cars, literally. It’s not a game, its the name we give to the strategy we use when we cross the street. As in a bullfight, you stand on the edge of the curb, waiting for the car/bull to pass and then run behind the passing car to succesfully cross the street.

This is true no matter what the right of way legislation says (pedestrians have the right of way, de jure, in Ecuador as elsewhere), and as such is a very useful example to teach the difference between law and legistlation when talking about institutions. Although the actual phrase has fallen out of fashion lately, along with the falling popularity of bullfights (cue nostalgic music for dying traditions), the strategy remains as strong as ever.

Both pedestrians and drivers are familiar enough with the strategy that it is not uncommon to see pedestrians motioning angrily at the innocent driver that stops at a crosswalk, usually a foreigner, so that the car can pass and they can safely cross the street. Drivers speed up at crosswalks where people are waiting to cross, not in attempt to run them over, but as a courtesy, so as to get out of pedestrian’s way faster (at least many people I’ve talked to have shamefully confessed that is why they do this!). When a driver does stop at a crosswalk to give the people on the sidewalk the right of way there is a marked delay and drivers and pedestrians are incovenienced by the delay.

From conversations I have had with people from other developing nations, the strategy used by drivers and pedestrians to cross the street is nearly identical to bullfighting with cars we use in Ecuador. Although it’s not the best possible strategy for coordinating street crossing, it is an effective strategy that allows for social coordination since everyone knows that game that is being played. It is an institution of the developing world.

Moving to the US for my undergraduate degree, many years ago, I packed this institutional baggage along with me, which led me to be late for the first class of the semester. When I arrived at the crosswalk in front of a big red brick building in Boston’s suburbs, a car pulled up to the stop sign and stopped. My mind was lost thinking about what college in the US would be like, as I patiently waited at the edge of the curb for the car to pass so that I could bullfight the car to cross the street. A sudden honk of the horn startled me as I looked around to see an angry driver waving for me to cross the street. Partly because I was startled, but also because I was used to bullfighting with cars, instead of jumping out immediatly to cross, my feet began to do an akward one-step-forward one-step-back shuffle. It wasn’t until I made eye contact with the now exasperated driver, that I was confident enough I wouldn’t be run over to gathered my courage, break out of my developing-country meet developed-country shuffle, and finally cross the street.

Talking to a classmate from Central America later that day, he told me that he was all too familiar with what had happened to me, and with the one-step-forward one-step-back shuffle being discovered by tourists, immigrants, and foreing students all over the developing world. Many years later I have informally confirmed the shuffle still exists in conversations with students that have traveled abroad to the US and Europe.

When I tell this story in class, the question of how to switch to the obviously superior institutions of the US and Europe for street crossing, where pedestrians have the right of way, de jure and de facto always comes up. For institutional change to succeed without pedestrian bloodshed, the new institution would need to become common knowledge rather quickly. In more technical language, bullfighting with cars is the equilibrium now in the developing world, and we know a better equilibrium exists, but the path to the new equilibrium is difficult to traverse.

When I ask what students would do to change to this superior equilibrium, the most common first response is very economic in orientation. Increase monitoring and impose larger fines they say. But given the costs of these policies in an already poor and corrupt institutional environment, I doubt this is necesarily the path to superior institutions, for street crossing or anything else. This is especially true when we consider the relative cost effectiveness of changing this institution vs. other potential institutional investments in the developing world.

I also doubt that larger fines and increased monitoring are the main reasons that superior institutions for street crossing have emerged in the developed world. I have rarely seen police monitoring crosswalks (with the excpetion of school crossings) in the US and Europe, and while fear of punishment is definately an important influence, I don’t know how heavily the expectation of punishment weighs on the minds of drivers in developed countries.

Institutions are important for development but we know very little about how to change them. More thoughtfull students also suggest that a superior institutional arrangement could be reached by convincing people to change their perceived payoffs of playing different strategies. The hard and long process of social entrepreneurship, seems more effective and conducive to robust success.