Does Social Cohesion Really Promote Reforms?

Hannes Andréasson (), Niklas Elert () and Nils Karlson
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Hannes Andréasson: Ratio, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden

No 211, Ratio Working Papers from The Ratio Institute

Abstract: This paper investigates whether social cohesion makes economic reforms more likely. First, we investigate whether social cohesion is a coherent concept by using a principal-component factor (PCF) analysis covering 16 indicators used to measure social cohesion in the previous literature for 40 different countries. The results suggest that in fact social cohesion is a multidimensional concept, consisting of no less than five orthogonal components or distinct dimensions, which we label social divisions, modern values, traditional nationalism, institutional commitment, and fairness as merit. These dimensions are then examined in relationship with economic reform in a panel regression framework. Results show that most dimensions of social cohesion do not in fact influence reform capacity. However, views of fairness based on merit, in contrast to equality, and to some extent social divisions, are found to have a positive effect on economic reforms. The results go against the previous literature, challenging the prevailing view of social cohesion as being unambiguously beneficial to economic reform.

Keywords: social cohesion; welfare state; reform; economic freedom (search for similar items in EconPapers)
JEL-codes: D02 O17 O43 P00 Z13 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2013-08-19
New Economics Papers: this item is included in nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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