The Cultural and Political Foundations of Quality of Institutions: The Role of Tightness and Looseness

Vincenzo Alfano and Salvatore Ercolano

No 12627, CESifo Working Paper Series from CESifo

Abstract: This paper examines how cultural and political dimensions of normative looseness shape institutional quality across European regions. Drawing on the Regional Index of Looseness (RIL) developed by Alfano and Ercolano (2026), which distinguishes between a vertical dimension and a horizontal dimension of tightness-looseness, we estimate fractional probit models for 142 NUTS-2 regions using measureas of institutional quality (the European Quality of Government Index-EQI, and its pillars) as dependent variables. Our results show that overall looseness is negatively associated with institutional quality, but this aggregate effect is driven (almost) entirely by the vertical dimension, reflecting tolerance for defying hierarchical authority. On the other hand, the horizontal dimension proves largely insignificant. These findings suggest that the relationship between culture and governance operates primarily through the vertical legitimacy of state authority rather than through peer-level normative pluralism, with important implications for the debate on institutional reform and regional divergence in Europe.

Keywords: institutional quality; tightness-looseness; regional governance; European regions; culture and institutions; EQI; fractional probit (search for similar items in EconPapers)
JEL-codes: D73 H11 O43 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12627

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