Culture, Policy, and Economic Development

Natalie Bau, Sara Lowes and Eduardo Montero

No 20374, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Culture shapes how policies are made and how people react to them. This chapter explores how culture and development policy affect each other. First, we provide evidence that cultural mismatch - specifically a mismatch between project manager background and the location of project implementation - is associated with the reduced success of World Bank projects. Second, drawing on historical and ethnographic work, we show that disregarding local cultural norms can undermine well-intentioned development policies. Third, we review economic research demonstrating that cultural practices systematically shape policy effectiveness, often leading to heterogeneous or unintended effects. Fourth, we discuss evidence that policies themselves can reshape cultural norms, sometimes in unexpected ways. Finally, we discuss research on tailoring interventions to the local context and conclude with lessons for future research.

Keywords: Culture (search for similar items in EconPapers)
JEL-codes: N00 O1 Z1 (search for similar items in EconPapers)
Date: 2025-06
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