Culture Rules: The Foundations of the Rule of Law and Other Norms of Governance

Abstract:     
This study presents evidence about relations between national culture and social institutions. We operationalize culture with data on cultural dimensions for over 50 nations adopted from cross-cultural psychology and generate testable hypotheses about three basic social norms of governance: the rule of law, corruption, and democratic accountability. These norms correlate systematically and strongly with national scores on cultural dimensions and also differ across cultural regions of the world. Using a linguistic variable on pronoun drop as an instrument for cultural emphases on autonomy versus embeddedness points to a significant influence of culture on governance, with a clear link to economic outcomes. Using cultural profiles of a previous generation as an instrument indicates relative stability of cultural orientations and of their correlates. The results suggest a framework for understanding the relations between fundamental institutions of social order as well as policy implications for reform programs.

Number of Pages in PDF File: 56

JEL Classification: K00, O10, O19, P20, P26, P50, Z13

working papers series