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Cultural dimensions, collective values and their importance for institutions

Mariko Klasing ()

Journal of Comparative Economics, 2013, vol. 41, issue 2, 447-467

Abstract: This paper critically assesses the role of culture in determining the quality of institutions. Employing various measures of cultural differences, I find that only differences related to the degree of individualism in society and the extent to which inequality in the distribution of power is tolerated are strong and statistically significant predictors of the observed differences in institutional quality. This finding is robust to the inclusion of various other determinants of institutional differences across countries discussed in the literature and it holds for a variety of measures of institutional quality. Moreover, the strong link between these two cultural dimensions and the quality of institutions is also confirmed in instrumental variables regressions where a novel instruments for culture based on a weighted average of the cultural attitudes present in neighboring countries is employed.

Keywords: Cultural dimensions; Collective values; Individualism; Institutions; Power distance (search for similar items in EconPapers)
JEL-codes: E02 O10 Z1 (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1016/j.jce.2012.09.003

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Handle: RePEc:eee:jcecon:v:41:y:2013:i:2:p:447-467