What is it about?

The aim of this paper is to verify the assertions made by these two schools of thought from the perspective of culture as a rationality component using an input-output growth model. We basically employed an approach that sought to define and aggregate cultural values under rationality indices: instrumental, affective, value and traditional rationality from 29 countries with data from world value survey (1981-2009). We systematically had them tested in an endogenous growth model alongside traditional economic variables

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Why is it important?

We conclude that when these cultural variables are combined with the so-called economic variables, there is an improvement in the model explanation than before. In addition, two of these cultural indices indicated a statistically positive effect on economic growth (instrumental and affective rationality). However, traditional rationality index was also robust but with a negative coefficient. Value rationality showed a somewhat weaker link to economic growth and was statistically insignificant.

Perspectives

There are widespread debates as to whether cultural values have a bearing on economic growth. Scholarly articles have actually had conflicting results with proponents arguing there is whiles opponents have thought otherwise.

Dr Joseph Ato Forson
National Institute of Development Administration

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This page is a summary of: Culture Matters: A Test of Rationality on Economic Growth, Asian Social Science, June 2013, Canadian Center of Science and Education,
DOI: 10.5539/ass.v9n9p287.
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