Week 15 - Lecture A

Week 15 - Lecture A - ECON 4411A, Fall 2011 Development...

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Unformatted text preview: ECON 4411A, Fall 2011 Development Economics Summary Notes: Week 15, Lesson A Culture Quote of the day: The future belongs to those who believe in the beauty of their dreams. Eleanor Roosevelt Introduction to culture It is generally accepted that a person’s attitudes are an important determinant of economic success. All other things being equal, people who work hard and plan for the future are more likely to succeed than those who are do not. A natural question is whether attitudes, values and beliefs prevalent in a society- are partially responsible for differences in economic outcomes and can also be important for the success of a country as a whole? The idea that culture is a determinant of national wealth is an old one. Max Weber (1864-1920) a famous sociologist argued that the rise of a “Protestant ethic” which celebrated hard work and the acquisition of wealth, led to an explosion economic growth in northern Europe starting in the 16th century. Quite recently, scholars have debated whether the rapid growth of the Asian Tigers can be explained by their adherence to “Asian values” a term coined by The Economist magazine in 1980. Despite the possible link between culture and growth, economists have gen- erally not studied culture as a possible variable affecting social outcomes. One main reason for the general reluctance is the difficulty in quantifying culture, thus making it difficult to use mathematical tools to analyze its relationship with other indicators. Another problem with looking at culture is that we run the risk of offending people because research finding may seem to imply that some cultures are good and others are bad. In addition, not only does culture have many different dimensions, but even when we focus on one aspect of culture, we often lack any objective measure and have to rely on the observers’ subjective assessments. Another problem with evaluating culture, is that in some cases, there is direct evidence of culture’s economic effects, while in other cases, effects can only be inferred. Finally, it is possible that an observer assessment of a cul- ture may be affected by what he knows of the economic success of the country being examined. Despite this possible drawbacks, in this lesson we would consider some as- pects of culture and what we know so far about the relationship between these aspects of culture and economic growth. The Effect of Culture on Economic Growth There are six potential dimensions of culture that can affect growth. 1 1. Openness to new ideas: This is one aspect of culture that can affect economic growth, A society’s openness to importing new ideas from abroad for example technology might make such a country more technologically advanced than another that wouldn’t over the long run. History is full of institutions both religious and circular that felt threatened by new ideas and did their best to suppress them. Scholars often view countries’ differ- ences in willingness to adopt foreign technology as part of the explanation...
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This note was uploaded on 01/26/2012 for the course ECON 4411 taught by Professor Ruth during the Fall '11 term at Georgia Tech.

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Week 15 - Lecture A - ECON 4411A, Fall 2011 Development...

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