Values and Norms Matter - On the Basic Determinants of Long-Run Economic Development

38 Pages Posted: 22 Jul 2008  

Stefan Voigt

University of Hamburg - Institute of Law & Economics; CESifo (Center for Economic Studies and Ifo Institute)

Sang-Min Park

University of Kassel; Marburg Center for Institutional Economics (MACIE)

Date Written: July 21, 2008

Abstract

Over the last couple of decades, it has become a commonplace to claim that institutions matter for economic development. Yet, institutions are not exogenous but the result of human action. It is argued here that the values and norms held by substantial parts of society's members are an important determinant of its institutions. It is further argued that values and norms have both a direct and an indirect effect on economic development: the direct effect materializes because the values and norms also contain the work ethic which, if transformed into behavior, should have direct consequences on economic development. The indirect effect is conjectured to work via the relevant institutions: if institutions are important for economic development and institutions are influenced by the values and norms, then this is a more indirect channel through which values and norms can display their impact.

Keywords: Institutions, Values and Norms, Democracy, Rule of Law, Culture, Social Capital, Civil Society, Economic Development, Total Factor Productivity

JEL Classification: 043, E19, E66, O11, O12, O17, Z13

Suggested Citation

Voigt, Stefan and Park, Sang-Min, Values and Norms Matter - On the Basic Determinants of Long-Run Economic Development (July 21, 2008). Available at SSRN: https://ssrn.com/abstract=1165343 or http://dx.doi.org/10.2139/ssrn.1165343

Stefan Voigt (Contact Author)

University of Hamburg - Institute of Law & Economics ( email )

Johnsallee 35
Hamburg, 20148
Germany
+49-40-428385782 (Phone)
+49-40-428386794 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Sang-Min Park

University of Kassel ( email )

Fachbereich 07
Nora-Platiel-Stra├če 4-6
34109 Kassel, 34127
Germany

Marburg Center for Institutional Economics (MACIE) ( email )

Universit├Ątsstrasse 24
D-35032 Marburg, D-35032
Germany

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