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Cultural dimensions, collective values and their importance for institutions

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  • Klasing, Mariko J.

Abstract

This paper critically assesses the role of culture in determining the quality of institutions. Employing various measures of cultural differences, I find that only differences related to the degree of individualism in society and the extent to which inequality in the distribution of power is tolerated are strong and statistically significant predictors of the observed differences in institutional quality. This finding is robust to the inclusion of various other determinants of institutional differences across countries discussed in the literature and it holds for a variety of measures of institutional quality. Moreover, the strong link between these two cultural dimensions and the quality of institutions is also confirmed in instrumental variables regressions where a novel instruments for culture based on a weighted average of the cultural attitudes present in neighboring countries is employed.

Suggested Citation

  • Klasing, Mariko J., 2013. "Cultural dimensions, collective values and their importance for institutions," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 447-467.
  • Handle: RePEc:eee:jcecon:v:41:y:2013:i:2:p:447-467
    DOI: 10.1016/j.jce.2012.09.003
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    More about this item

    Keywords

    Cultural dimensions; Collective values; Individualism; Institutions; Power distance;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • Z1 - Other Special Topics - - Cultural Economics

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