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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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    Cited by:

    1. van Hoorn, Andre, 2016. "The Cultural Roots of Human Capital Accumulation," MPRA Paper 80007, University Library of Munich, Germany.
    2. Yann Algan & Pierre Cahuc, 2010. "Inherited Trust and Growth," American Economic Review, American Economic Association, vol. 100(5), pages 2060-2092, December.
    3. Davis, Lewis S. & Abdurazokzoda, Farangis, 2016. "Language, culture and institutions: Evidence from a new linguistic dataset," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 541-561.
    4. repec:eee:jcecon:v:45:y:2017:i:3:p:456-480 is not listed on IDEAS
    5. Sarafidis, Vasilis, 2016. "Neighbourhood GMM estimation of dynamic panel data models," Computational Statistics & Data Analysis, Elsevier, vol. 100(C), pages 526-544.
    6. Berggren, Niclas & Nilsson, Therese, 2015. "Globalization and the transmission of social values: The case of tolerance," Journal of Comparative Economics, Elsevier, vol. 43(2), pages 371-389.
    7. Beugelsdijk, Sjoerd & Klasing, Mariko J., 2016. "Diversity and trust: The role of shared values," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 522-540.
    8. repec:eee:chieco:v:48:y:2018:i:c:p:27-45 is not listed on IDEAS
    9. Jordaan, Jacob A. & Dima, Bogdan & Goleț, Ionuț, 2016. "Do societal values influence financial development? New evidence on the effects of post materialism and institutions on stock markets," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PA), pages 197-216.
    10. Davis, Lewis S. & Williamson, Claudia R., 2016. "Culture and the regulation of entry," Journal of Comparative Economics, Elsevier, vol. 44(4), pages 1055-1083.
    11. Klasing, Mariko J., 2014. "Cultural change, risk-taking behavior and implications for economic development," Journal of Development Economics, Elsevier, vol. 110(C), pages 158-169.
    12. repec:eee:corfin:v:46:y:2017:i:c:p:284-306 is not listed on IDEAS
    13. Kant, Chander, 2016. "Are institutions in developing countries malleable?," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 272-289.

    More about this item

    Keywords

    Cultural dimensions; Collective values; Individualism; Institutions; Power distance;

    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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