The Cultural Correlates of Growth: An Empirical Investigation
Understanding the determinants of long-run economic growth has attracted the attention of economists and social scientists since, at least, the times of Adam Smith. It has only been more recently, however, that social scientists started a systematic effort at uncovering the inter-relations between growth and cultural factors. In a pioneering contribution, Granato, Inglehart and Legland (1996) found that an index of cultural values containing the positive influence of thrift and motivation net of the negative impacts of obedience and religious faith had a positive effect on long-term growth.
In this paper we use data from the World Values Survey and the World Database of Happiness to study the cultural correlates of economic growth in more detail. By incorporating insights from social psychology and economics, we start to explore the aggregation of multiple cultural determinants into broader categories containing homogeneous information to explain long-term economic growth. In particular, we propose a first classification of the data. Our results indicate that previous findings are particularly sensitive to the existence of outliers. Given that cultural factors display very little variation over long time horizons, a significant obstacle in furthering our understanding of the influence of culture on economic growth is given by the small sample size of current cross-country datasets.
Keywords: Economic Growth, Macroeconomics, Economic Development, Social Psychology, Culture
Dr. Federico Guerrero
Associate Professor, Economics, University of Nevada
Lecturer, Economics, University of Nevada