Does Culture Matter for Development?

32 Pages Posted: 20 Apr 2016

See all articles by Augusto Lopez-Claros

Augusto Lopez-Claros

World Bank - Financial and Private Sector Development

Valeria Perotti

World Bank

Date Written: November 1, 2014


Economists have either avoided or struggled with the concept of culture and its role in economic development. Although a few theoretical works -- and even fewer empirical studies -- have appeared in the past decades, this paper tries to build on a multidisciplinary approach to review the evidence on whether and how culture matters for development. First, the paper reviews available definitions of culture and illustrates ways in which culture can change and create favorable conditions for economic development. Second, the paper discusses the challenges of separating the effect of culture from other drivers of human behavior such as incentives, the availability of information, or climate. Finally, the paper argues that globalization has led to the emergence of a set of progressive values that are common cultural traits of all developed economies.

Keywords: Social Analysis, Quality of Life & Leisure

Suggested Citation

Lopez Claros, Augusto and Perotti, Valeria, Does Culture Matter for Development? (November 1, 2014). World Bank Policy Research Working Paper No. 7092, Available at SSRN:

Augusto Lopez Claros (Contact Author)

World Bank - Financial and Private Sector Development ( email )

United States

Valeria Perotti

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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