The Cultural Roots of Institutions
AbstractDo political institutions have cultural roots? Using a novel data set of cultural values we show that culture, defined as a society's collective beliefs and values, is an important determinant of institutions. We argue that the traditional proxies for culture used in the existing literature suffer from conceptual problems and find that they do not survive several robustness checks. Our results suggest, that individualist societies and societies with preference for a more equal distribution of power set up institutions that better protect individual property rights, place more constraints on governments and have more effective governments. We find that our measures of culture are robust to the inclusion of other control variables and across different samples and that they always dominate the effects of the traditional proxies.
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Bibliographic InfoPaper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2008 with number 2008-24.
Length: 36 pages
Date of creation: Nov 2008
Date of revision:
Institutions; political institutions; culture; cultural values;
Find related papers by JEL classification:
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- F55 - International Economics - - International Relations and International Political Economy - - - International Institutional Arrangements
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- P00 - Economic Systems - - General - - - General
- P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-12-01 (All new papers)
- NEP-CBE-2008-12-01 (Cognitive & Behavioural Economics)
- NEP-CUL-2008-12-01 (Cultural Economics)
- NEP-HPE-2008-12-01 (History & Philosophy of Economics)
- NEP-PKE-2008-12-01 (Post Keynesian Economics)
- NEP-POL-2008-12-01 (Positive Political Economics)
- NEP-SOC-2008-12-01 (Social Norms & Social Capital)
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