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Culture, Beliefs and Economic Performance

Author

Listed:
  • Rafael Di Tella

    (Harvard Business School)

  • Robert MacCulloch

    () (University of Auckland)

Abstract

Beliefs are one component of culture. Data from the World Values Survey is available on a subset of beliefs concerning (broadly) meritocracy and poverty that appear relevant for economics. We document how they vary as well as their distribution across countries. We then correlate these measures of beliefs with economic growth and compare them with institutional and geographical determinants of income. A strong negative relationship is found between leftist economic beliefs and growth but little evidence is found of a relationship with respect to non-economic beliefs. Finally, we briefly discuss some causal effects on beliefs. The evidence suggests that higher country risk and more dependence on natural resources shifts nations to a more leftist set of economic beliefs. Overall the evidence supports the view that cultural specificities may explain why certain institutions cannot be transplanted between nations with different cultural histories and underlines the limit to policy activism.

Suggested Citation

  • Rafael Di Tella & Robert MacCulloch, 2014. "Culture, Beliefs and Economic Performance," Working Papers 14_06, Motu Economic and Public Policy Research.
  • Handle: RePEc:mtu:wpaper:14_06
    as

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    File URL: http://motu-www.motu.org.nz/wpapers/14_06.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Beliefs; institutions; causality;

    JEL classification:

    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy

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