Cultural Factors in Economic Growth (Ethical Economy)


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fjghjhfg.co.vu/14411.php Therefore, a meta-analysis research would be desirable to integrate results from the existing studies to reveal patterns of causal relationships and to form a theoretical framework for further future studies. In addition, the researcher also suggests that big research institution should work hand in hand to conduct more researches in this field.

According to Cushrer and Brislin [ 1 ] National Culture can be defined as the average common ideas, values and assumptions about life that are widely shared and that guide the behavior of specific nation or people. Economic Growth can be defined as the rate of increase in the value added produced in the economy — GDP growth rate. Alternatively, the rate of increase in the incomes of all factors of production in one year always calculated in constant prices.

According to Guiso et al. But specialization requires trade, so that when the division of labor has extended itself sufficiently throughout a society, everyone lives by exchanging. In view of that, it is obvious that the very first writings in economics aimed at revealing the causes of economic wealth of some nations and the reasons behind economic growth.

On the other hand, knowing such reasons could pave the way for other weak economic nations to try applying them in an attempt to improve their weak economies and increase their growth rate. In the meantime, Guiso et al. Therefore, the purpose of this research paper is to review the literature with respect to the influence of national culture on economic growth and to discuss the different empirical findings shown by different studies conducted in this field and the debates take place between both culturalists and economists with regard to the causal link between culture on economic growth.

The role of National culture played in economic growth remained unrevealed till , when Max Weber linked in his early studies between the raise of an economic ideology capitalism , and a certain religious creed protestant ethic. Despite that Max Weber is widely recognized as one of the founding fathers of the discipline of sociology. Campbell, [ 3 ] yet Weber was the first one who suggested that they might be a certain correlation between national culture and economic growth.

Therefore, arguments which prioritize culture as a prominent development factor are not new, Max Weber raised awareness of the importance of a set of values to explain the success of industrial capitalism vis-a-vis pre-capitalist agrarian societies across Europe [ 4 ].

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He believes that while such theories may explain specific episodes of development, they fail to clearly explain the international development experience following the Second World War. You let them in, but you are now putting yourself and your family at risk. It also explains why Odinga is still the leading politician amongst the Luo after losing several elections. I therefore am convinced that if we would explore answer to the following questions we would shed more light on why some people and societies develop in specifif ways:. Third — I think you are being unfair in places. A study by Li et al.

Protestantism did this, he stated, by defining and sanctioning the ethic of everyday behavior that conduced to business success [ 5 ]. While these values spread widely along with the Protestant Reform in Central Europe, traditional values of obedience and religious faith remained in Southern Europe. That explains, according to Rao [ 6 ], why decades of poorer economic performance ensued across Southern Europe.

In the meantime, Calvalcanti et al. The main finding is that these differences may possibly explain why Northern Europe developed before Southern Europe, but they cannot explain why Europe developed before Latin America. In the meantime, there are thousands of regional economies across the world that are also similarly premised on strong cohesive regional cultures, including ethnic cultures, trade unions cultures or work cultures based on particular sectoral specialization.

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This volume is the product of the "Sixth Annual SEEP-Conference on Economic Ethics and Philosophy" on the theme of 'Cultural Factors in Economic Growth'. Ethical Economy. Other renditions Economics: Economic Growth. Casson Growth. The volume deals with analysis of cultural factors in Economic Growth.

Moreover, some of the well-known geographical examples of new industrial districts are also based on religious regional cultures. As a result culture in its own right has not been dealt with explicitly as a major issue by economists. Some researchers neither approve nor support that approach while others supported his ideas and beliefs through relating some of the economic growth leaps of some countries especially after the Second World War to Weber's theory, to the extent that they attributed such economic success of some nations only to the cultural factor.

Banfield in is the first to propose a cultural explanation for underdevelopment. Cuesta suggested that a critical review of economicist and culturalist paradigms shows that the developmental role attributed to culture in general and to specific values, beliefs and behaviors in particular has fluctuated between two extremes, from complete neglect to claims of explanatory superiority.

Furthermore, Weber intended to claim that a Protestant ethic actually caused the rise of modern capitalism. Weiss and Hobson [ 10 ] remind us that the same revered Confucian ethics, to which culturalist theories attribute the success of East Asian countries, have been associated for centuries with stagnant economies.

He believes that while such theories may explain specific episodes of development, they fail to clearly explain the international development experience following the Second World War. They also reject the implication that Confucianism encompasses a homogeneous ethics, an argument equally applicable to Christianity or Islamism. Instead, they argue that the choice of political arrangements such as strategic industrialization guided by the State is behind the development success of the region. Therefore, national culture has been either neglected as a determinant of economic growth by economicist theories or deemed the main explanation behind international developmental differences by culturalist theses.

Empirical evidence supports neither of these arguments. Less ambitious theories connecting concrete cultural aspects, such as trust and associational participation in communities, have more convincingly estimated a significant and positive impact on economic welfare. Moreover, since the s, both the paradigm of human development and passionate discussions on globalization has revived interest in the role of culture in economic development. The myopic approach of many analyses has contributed to a heated debate.

Unsurprisingly, empirical evidence does not support such claims. The protestant work ethic worked its wonders not just in the western world but also in Asia. Japan has been characterized as a society whose sense of duty and collective obligation, in all realms, set it apart from the individualism cultivated in the west. Along with the government initiatives and a collective commitment to modernization, this work ethic and Japanese personal values made possible the socalled Japanese miracle [ 14 ].

More recently, the contribution of cultural factors to economic success or failure in different countries or regions of the world has been documented [ 15 ]. Huntington [ 16 ] predicts that, as a result, economic globalization will lead to a ferocious competition among civilizations and a protracted confrontation among the most prominent cultures. He envisages that economic competition without cultural convergence will dominate future world relations.

Confrontation between democratic, communist and fascist regimes has been replaced by Western, Islamic, Confucian and other culture clashes. A frequent critique of this thesis, however, is that traditional civilizations are bound to conflict. There are, after all, at least as many examples in history of civilizations collapsing at the hands of others, as there are of successful episodes of cooperation among them. Huntington in his attempt to link national culture with economic growth took an example of two countries that had similar per capita income levels, economic sectors and composition of exports in the early s.

There, the weather is warm and there are annual rains more or less. My friend was arguing that this is why Thais are always late — they never had to plan. Northern Europeans had to plan ahead to get through the cold months. That argument has a long history. Second — I think you are missing some cultural items which likely impact efficiency and productivity.

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Perhaps a risk taking culture is good for productivity in the long run more invocation or learning. Perhaps a bargaining culture has higher transaction costs; or maybe it has for efficient price discrimination. A less truthful culture might incur higher transaction costs through increased need for due diligence. A culture of corruption which might include entertainment, kickbacks, purchaser rebates, birthday gifts, red packets, etc might lead to larger capital outflows to protect the ill-gotten gains. A culture which encourages education might lead to higher productivity.

Third — I think you are being unfair in places. Nor have I heard economists recommend that the stereotype Malaysian work ethic is better than the stereotype Chinese work ethic because it means less, well, work. No, I think that cultural economics informs the tradeoff space. How much do siestas cost an economy? How much would an extra week of vacation cost? What is the impact of more paternity leave for fathers? The economics can tell us about the monetary cost or benefit.

Then it is up to the people to make the utility choice. So yes, I think the study is very worth while. I think your last point may be the most pertinent. And if everyone is making an individual choice to conform to some cultural norm, but this has a big economic cost, then perhaps culture can be a significant factor in economic growth. In this case, culture is like an externality or coordination failure.

I am interested in the role reciprocity plays in finance and I have started looking at how different commercial cultures affect the development of the financial system. My hypothesis is that a financial network based on e. This will impact on the distribution of money in the financial system and its resilience to shocks. The point of divergence, I suspect, is that I do not take it as axiomatic that I work in a framework of utility maximisation.

If differences in the utility function are the only difference, then I agree. But what if the ability to make good choices differs across cultures. Have you considered the possibility that some cultures are better at maximizing their own utility than others?

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Effectively, what is the difference? Maximizing utility does not mean that everyone enjoys their decisions. So culture could maximize utility but not maximize happiness. Thank you for the great post. Insofar as economic growth is the emergent phenomenon of each individual behaving in a certain way working , and insofar culture affects how each individual behaves, then it is easy to draw a conclusion that culture must indeed have an effect on economic growth.

Furthermore, the assumption that culture — whatever it might be — is static seems to be, at least intuitively, erroneous, therefore any regression such as above would be temporal at best.

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Alternatively, we could instead focus on ethical values which, unlike culture, can be defined to be static concepts i,e, unchanging through time , and try to observe their correlation with economic growth. Even if we cannot really escape the realm of subjectivity, at the very least we have a simpler task. The existence of a certain value in an individual is a boolean either true or false , and as such we can easily measure how much that value is prevalent within a certain community. Culture , Education, Ethic undervalued factors of competitive development http: This i wrote about on april Culture — Ethics — Information: In the Economic policy measures , especially in the last years, it has been given a lot of emphasis to some impediments that block both the development policies and the employment.

Among the referred obstacles appears: Against this situation , trying to emulate the successes achieved in other Western countries , the measures put in place by some other Governments, have been focused primarily on quantitative measures, underestimating the capacity to react to these measures of the social system respect that one of other Western countries.

Some Governments did it.. A deterioration , the last, very serious in our economy as it incorporates a structural and not cyclical deterioration which will impact on the future of our country. The same situation happen in other weak countries of Eurozone … and.. This is mainly becouse the accelleration in the last years of an incredible Worldwide sophistication of the Economic development process. A crucial role in this game must be played by Politics, by Politicians and then by the Government, the government parties and all political parties in general, which should start to give an example.

The Political Parties seems not capable any more to select ruling class especially at intermediate level becouse the need to favourite clientelism and corporative interest.

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The parties and therefore Politics are dependent too much from the vote system and from corporative interests that are not any more helpful to the satisfation of general interest of the countries and of the worldwide economy. These considerations, which affected public opinion and newspapers and television on and off and only during some election campaign , assume today a greater value as greater is the level of the modernization and communication of the country to which they refer becouse also the higher level of influence that either directly or indirectly foreign investors lead also and above all on our productive system and enterprises.

Basically the Politics today must be made more seriously than in the past because it is not only the political decision ie the one that determines the address of the strategic choices made by the government in different sectors but it is mostly the Ethics embodied by political class and by the government that make the difference to gain positive effects on the long term economic development.

I think culture influence many many variables that turn to have impacted on the utility function for the societies and the household in general. Take for example factors such as educational impacts on culture, employment impacts on culture and so on affects the GDP growth either negative or positive depending on the people pespective about cultures on growth. For me i think the factors influence on culture on growth are not only the above but others like decision making in the society,household protection or stay indoor in some countries women stay indoor lower education, lower participation in labor force and so on.

Overall only caring kids and only acts as house wife , affects productivity, affects consumption and saving and even affects investment. So cultures will have correlation either positive or negative with economics growth. So, culture must matter but impossible to prove. Reblogged this on Things I grab, motley collection. Does Culture Matter for Economic Growth? Thanks for this interesting post. It points into the right direction: This is comprised of individual ambitions, values, belief systems etc.

I therefore am convinced that if we would explore answer to the following questions we would shed more light on why some people and societies develop in specifif ways:. Lets take some young entrepreneurs as an example. With being open-minded, self-motivated, passionate, pro-active, solution-seeking? If so, then how can we empower people and entrepreneurs, how can mind-sets and inner attitudes be shifted? These dimensions do matter and can be developed if taken into account. Unless someone has tried meditation or a a similar practice it is a difficult topic for economists and development practitioners to grasp.

Development is what people do for themselves. It must start and end from within. Our job is to facilitate the process. Nwanze, Addis Ababa, May The Growth Economics Blog. The concept of culture seems to be taken in a very wide sense but the answer is yes. The Luo of Western Kenya were mentioned above and they can serve as an example of culture causing relatively poor, but difficult to measure, economic growth. In the culture of the Luo, the younger brother cannot plough until the eldest brother has ploughed.

Does Culture Matter for Economic Growth?

Hence, assuming the old adage, that the sooner ploughing is done the greater is the yield and economic growth, then the delay in younger men ploughing is harmful to economic growth caused by the above mentioned cultural law, by some immeasurable amount. So, measure this, somehow, against say another Kenyan tribe, which does not cause such delays then you would say, all things being equals as to rain, inputs, etc. It may be that because of this law they plough a lot quicker but that is not commonly held to be the case.

The issue here is not actually culture in its narrower sense but religion. It also explains why Odinga is still the leading politician amongst the Luo after losing several elections. He is a senior man of a certain house and this law mentioned above means that no one within the Luo will seek to replace him in his lifetime.

This law, therefore, opens up the question of economic growth and factors militating against it, in cultures with such laws reflected through to the very top of society and the government of the culture or society.

"Culture of Gowth: Origins of the Modern Economy"

In effect the person of age rules and if he does so badly, none, even although disagreeing with it, will challenge it and do their own thing for their own good. They just agree to suffer the consequences even if harmful.