The moderating role of culture on the benefits of economic freedom: Cross-country analysis
Graafland,Johan de Jong,Eelke
Graafland,Johan
de Jong,Eelke
Abstract
The implementation of pro-market policies and institutions is often suggested for enhancing a country's development. However, implementing pro-market policies and institutions has a mixed track record. Some have ascribed the bad results to the neglect of people's predispositions, often described as culture. In this study, we argue that successful implementation of pro-market policies and institutions requires that large parts of the population know how to use the resulting freedom in a way that can bring long term benefits. A panel analysis on a sample of 67 countries from 1970 to 2019 confirms this theoretical argument. We find that Long Term Orientation increases the effect of economic freedom on income per capita, whereas Uncertainty Avoidance weakens the positive relationship between economic freedom and income per capita. The policy implication is that the introduction of free market policies and institutions will particularly foster economic development in long-term oriented societies and in societies with low Uncertainty Avoidance.
Description
Date
2022-03
Journal Title
Journal ISSN
Volume Title
Publisher
Research Projects
Organizational Units
Journal Issue
Keywords
culture, economic development, economic freedom, uncertainty avoidance, long term orientation, A13 - Relation of Economics to Social Values, E02 - Institutions and the Macroeconomy, O11 - Macroeconomic Analyses of Economic Development, P51 - Comparative Analysis of Economic Systems, Z19 - Other, SDG 8 - Decent Work and Economic Growth, SDG 16 - Peace, Justice and Strong Institutions
Citation
Graafland, J & de Jong, E 2022, 'The moderating role of culture on the benefits of economic freedom: Cross-country analysis', Journal of Comparative Economics, vol. 50, no. 1, pp. 280-292. https://doi.org/10.1016/j.jce.2021.09.005