The Impact of Tolerance on Economic Modernization in a Comparative Perspective

For the majority of countries modernization of any kind is an important part of the political agenda. Policy-makers and experts are challenged to elucidate its distinct paths in different economies, to show why some countries succeed and others fail on their way towards modernization, and to identify the factors that make success stories. In this case, close attention is paid to the linkages between modernization and value systems, in particular, to tolerance. The aim of this paper is to test empirically the assumption that tolerance exerts a significant positive influence on modernization (which is understood in its ‘narrow’ sense as economic and technological development) as well as the contribution of an enabling mechanism — political institutions. The theoretical frameworks of our study are the cultural modernization approach by Ronald Inglehart and the concept of the «creative class» by Richard Florida. We used data from 58 countries over 1996-2008, retrieved from the World Values Survey, as well as from the World Bank databases «World Development Indicators» and «Worldwide Governance Indicators». The analysis confirmed that tolerance does have a significant impact on modernization in terms of transition towards a post-industrial (innovation) economy. This process is associated with the emergence of a specific social class — a creative class. Tolerance, expressed as a tolerant attitude towards homosexuality, gender equality, and a decrease in xenophobia, is a crucial prerequisite in establishing and maintaining favorable conditions for attracting creative people. Two distinct patterns of modernization are revealed, depending on the level of social tolerance: a tolerant model and a catch-up model. The post-industrial economy requires the formation of a relevant society based on the values of self-expression. However, some countries try to build a post-industrial economy without building a post-industrial society, although the probability of success in this case is rather low. This catch-up model focuses on investment, a lower-level of tolerance, and weak political institutions. The latter matter especially, and they seem to be the causal mechanism to ensure the linkages between tolerance and successful modernization. First of all, the linkage emerges from the rule of law and control of corruption. Institutions are regarded as a key element in the tolerant model of modernization, ensuring creative people to maintain openness, diversity, and protection of their interests, including the right to identity. Catch-up strategy, in contrast, puts the main emphasis not on values and strengthening institutions, but on higher investment rates. Note: Downloadable document is in Russian.