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Is tolerance good or bad for growth?

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  • Berggren, Niclas

    () (The Ratio Institute)

  • Elinder, Mikael

    () (Uppsala Center for Fiscal Studies)

Abstract

We investigate to what extent tolerance, as measured by attitudes toward different types of neighbors, affects economic growth. Data from the World Values Survey enable us to investigate tolerance–growth relationships for 54 countries. We provide estimates based on cross-sectional as well as panel-data regressions. In addition we test for robustness with respect to model specification and sample composition.Unlike previous studies, by Richard Florida and others, we find that tolerance toward homosexuals is negatively related to growth. For tolerance toward people of a different race, we do not find robust results, but the sign of the estimated coefficients is positive, suggesting that inclusion of people irrespective of race makes good use of productive capacity. We propose mechanisms to explain these divergent findings, which clarify why different kinds of tolerance may be of different economic importance.

Suggested Citation

  • Berggren, Niclas & Elinder, Mikael, 2010. "Is tolerance good or bad for growth?," Working Paper Series, Center for Fiscal Studies 2010:8, Uppsala University, Department of Economics.
  • Handle: RePEc:hhs:uufswp:2010_008
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    Cited by:

    1. Christian Bjørnskov & Pierre-Guillaume Méon, 2015. "The productivity of trust," Post-Print CEB, ULB -- Universite Libre de Bruxelles, June.
    2. Niclas Berggren & Therese Nilsson, 2013. "Does Economic Freedom Foster Tolerance?," Kyklos, Wiley Blackwell, vol. 66(2), pages 177-207, May.
    3. Shi, Yingying & Pan, Min & Peng, Daiyan, 2017. "Replicator dynamics and evolutionary game of social tolerance: The role of neutral agents," Economics Letters, Elsevier, vol. 159(C), pages 10-14.
    4. Eduard Bomhoff & Grace Lee, 2012. "Tolerance and economic growth revisited: a note," Public Choice, Springer, vol. 153(3), pages 487-494, December.
    5. Sherif Khalifa, 2017. "Endowments, Culture and Economic Development," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 664-677, August.
    6. Yingying SHI & Min PAN, 2018. "Dynamics of Social Tolerance on Corruption: An Economic Interaction Perspective," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 135-141, December.
    7. Colin Jennings & Elizabeth Ralph-Morrow, 2020. "Selective tolerance and the radical right," Rationality and Society, , vol. 32(2), pages 144-167, May.
    8. Badgett, M.V. Lee & Waaldijk, Kees & Rodgers, Yana van der Meulen, 2019. "The relationship between LGBT inclusion and economic development: Macro-level evidence," World Development, Elsevier, vol. 120(C), pages 1-14.
    9. Berggren, Niclas & Nilsson, Therese, 2016. "Tolerance in the United States: Does economic freedom transform racial, religious, political and sexual attitudes?," European Journal of Political Economy, Elsevier, vol. 45(S), pages 53-70.
    10. Pitlik, Hans & Rode, Martin, 2017. "Individualistic values, institutional trust, and interventionist attitudes," Journal of Institutional Economics, Cambridge University Press, vol. 13(3), pages 575-598, September.
    11. Necati Aydin, 2017. "Institutional Values Needed for Transformative Socio-economic Development in the Muslim World القيم المؤسسية اللازمة للتنمية الاقتصادية والاجتماعية التحويلية في العالم الإسلامي," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 30(SI), pages 17-35, April.
    12. 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.
    13. Eva Mª Buitrago & Mª Ángeles Caraballo & José L. Roldán, 2019. "Do Tolerant Societies Demand Better Institutions?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(3), pages 1161-1184, June.
    14. Niclas Berggren & Mikael Elinder, 2012. "Tolerance and growth: modeling the empirical relationship," Public Choice, Springer, vol. 153(3), pages 495-502, December.
    15. B. Dima & Ş. M. Dima, 2016. "Income Distribution and Social Tolerance," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 439-466, August.
    16. J. Sebastian Leguizamon & Susane Leguizamon, 2017. "Disentangling the effect of tolerance on housing values: how levels of human capital and race alter this link within the metropolitan area," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(2), pages 371-392, September.
    17. repec:abd:kauiea:v:30:y:2017:i:4:p:17-35 is not listed on IDEAS
    18. Richard Florida & Charlotta Mellander & Patrick Adler, 2011. "The Creative Class Paradigm," Chapters, in: David Emanuel Andersson & Åke E. Andersson & Charlotta Mellander (ed.), Handbook of Creative Cities, chapter 3, Edward Elgar Publishing.
    19. David B. Audretsch & Nikolaus Seitz & Katherine Margaret Rouch, 2018. "Tolerance and innovation: the role of institutional and social trust," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(1), pages 71-92, March.
    20. Polterovich, Victor, 2017. "Толерантность, Сотрудничество И Экономический Рост [Tolerance, collaboration and economic growth]," MPRA Paper 81277, University Library of Munich, Germany.

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    More about this item

    Keywords

    Tolerance; Growth; Diversity; Human Capital; Creativity; Innovation;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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