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Culture and institutions: economic development in the regions of Europe

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  • Guido Tabellini

Abstract

Does culture have a causal effect on economic development? The data on European regions suggest that it does. Culture is measured by indicators of individual values and beliefs, such as trust and respect for others, and confidence in individual self determination. To isolate the exogenous variation in culture, we rely on two historical variables used as instruments: the literacy rate at the end of the 19th century, and the political institutions in place over the past several centuries. The political and social history of Europe provides a rich source of variation in these two variables at a regional level. The exogenous component of culture due to history is strongly correlated with current regional economic development, after controlling for contemporaneous education, urbanization rates around 1850, and national effects. (JEL: O10, F10, P10, N13) (c) 2010 by the European Economic Association.

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Paper provided by David K. Levine in its series Levine's Working Paper Archive with number 321307000000000241.

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Date of creation: 31 Jul 2006
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Handle: RePEc:cla:levarc:321307000000000241

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  14. repec:rus:hseeco:72137 is not listed on IDEAS
  15. Bornhorst, Fabian & Ichino, Andrea & Schlag, Karl & Winter, Eyal, 2004. "Trust and Trustworthiness Among Europeans: South-North Comparison," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4378, C.E.P.R. Discussion Papers.
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  1. Are Economic Values Transmitted from Parents to Children?
    by Blog Author in Liberty Street Economics on 2014-01-06 12:00:00
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