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How are cultural dimensions and governance quality related to socioeconomic development?

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  • Gaygısız, Esma

Abstract

This study presents evidence about relations between national cultural dimensions, socioeconomic development and governance quality. Relations between Hofstede's dimensions, Schwartz cultural values, Worldwide Governance Indicators (WGI) and UNPD Human Development Index (HDI) were analysed by using correlations, multiple regression analysis, moderator and mediator analyses as well as path analyses. Correlation results showed that WGI, indulgence, harmony, affective and intellectual autonomy and egalitarianism were positively and power distance, embeddedness, and hierarchy negatively related to HDI. Regression analyses and moderation analyses showed that WGI moderated the relations between HDI and indulgence, embeddedness, intellectual autonomy and affective autonomy. In path models using structural equation modelling techniques, the effects of power distance and individualism on HDI were fully mediated by WGI whereas indulgence vs. restraint and long-term orientation had significant paths only to WGI. The effect of Schwarz's embeddedness dimension on HDI was partly mediated by WGI. In both models, WGI was strongly related to HDI. These results emphasize the importance of the quality of governance in socioeconomic development.

Suggested Citation

  • Gaygısız, Esma, 2013. "How are cultural dimensions and governance quality related to socioeconomic development?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 170-179.
    • Handle: RePEc:eee:soceco:v:47:y:2013:i:c:p:170-179
    DOI: 10.1016/j.socec.2013.02.012
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    References listed on IDEAS

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    1. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    2. Licht, Amir N. & Goldschmidt, Chanan & Schwartz, Shalom H., 2005. "Culture, Law, and Corporate Governance," International Review of Law and Economics, Elsevier, vol. 25(2), pages 229-255, June.
    3. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2007. "The worldwide governance indicators project : answering the critics," Policy Research Working Paper Series 4149, The World Bank.
    4. Laura Langbein & Stephen Knack, 2010. "The Worldwide Governance Indicators: Six, One, or None?," Journal of Development Studies, Taylor & Francis Journals, vol. 46(2), pages 350-370.
    5. Licht, Amir N. & Goldschmidt, Chanan & Schwartz, Shalom H., 2007. "Culture rules: The foundations of the rule of law and other norms of governance," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 659-688, December.
    6. Langbein, Laura & Knack, Stephen, 2008. "The worldwide governance indicators and tautology : causally related separable concepts, indicators of a common cause, or both ?," Policy Research Working Paper Series 4669, The World Bank.
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    Keywords

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    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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