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The Cultural and Political Foundations of Quality of Institutions: The Role of Tightness and Looseness

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  • Vincenzo Alfano
  • Salvatore Ercolano

Abstract

This paper examines how cultural and political dimensions of normative looseness shape institutional quality across European regions. Drawing on the Regional Index of Looseness (RIL) developed by Alfano and Ercolano (2026), which distinguishes between a vertical dimension and a horizontal dimension of tightness-looseness, we estimate fractional probit models for 142 NUTS-2 regions using measureas of institutional quality (the European Quality of Government Index-EQI, and its pillars) as dependent variables. Our results show that overall looseness is negatively associated with institutional quality, but this aggregate effect is driven (almost) entirely by the vertical dimension, reflecting tolerance for defying hierarchical authority. On the other hand, the horizontal dimension proves largely insignificant. These findings suggest that the relationship between culture and governance operates primarily through the vertical legitimacy of state authority rather than through peer-level normative pluralism, with important implications for the debate on institutional reform and regional divergence in Europe.

Suggested Citation

  • Vincenzo Alfano & Salvatore Ercolano, 2026. "The Cultural and Political Foundations of Quality of Institutions: The Role of Tightness and Looseness," CESifo Working Paper Series 12627, CESifo.
    • Handle: RePEc:ces:ceswps:_12627
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    Keywords

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    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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