The impact of culture on economic behaviour

The impact of culture on economic behaviour Most modern neoclassical economists have ignored the important role played by culture in explaining fluctuations in economic behaviour, hence, they were more concerned about economic variable such prices, output, interest rate etc. However, culture (values, norms, believes and religions) have a profound influence on economic behaviour (Hogeland 2003:2). In contrast those interested in the matter, consider that culture explain differences in economic outcomes however, they face challenges of finding a credible technique to show that the influence of culture can be separated from institutions and economic variables (Tabellini 2007). In the recent two decades economists became seriously concerned about the effects of culture on economic behaviour and found that culture (religious beliefs, values and preferences) has a significant positive relationship to economic growth. However, the economists find it difficult to explain because they are mainly concerned about economic measurements and because of the broad complexity of culture that makes it difficult to measure and test. Therefore, to overcome the situation variables that include normative values (beliefs, religious, ethnicity, etc) were included in the model as proxy variables. The results suggest that causality between culture and economics is likely to go two way directions, that is, culture may influence economic behaviour and economic behaviour may also affect the culture (Qin, Shuhao, Heerink, Futian 2008). In common sense or stylized facts also suggest that culture indeed influence economics behaviour. Thus, government policy toward economic growth may be successful or a failure in different geographical areas dues due individual behaviours influenced by cultural backgrounds. Therefore, if we can not test the role of culture in economics we cannot assure its implications on economic behaviour (Greif 1994). However, in recent years better techniques have been put in place to identify systematic differences in individual values, beliefs and preferences. These new techniques are now able to measure and test the influence of culture on economics behaviour. This paper examines the effects of culture on economic behaviour by using proxy variables of culture such as trust, respect, self determination and religious beliefs. The paper will try to answer the question does culture influence economic behaviour? To answering this question the paper will provide some theoretical back ground including: definitions of terms in section two, section three discuss empirical evidence, relationship between culture and institutions etc. Definition of terms The definition of culture is very broad and complex. However, according to Tabellini (2007) culture is defined as individual values and convictions about the scope of application of norms of good conduct, is an important channel through which distant political history influences the functioning of current institutions. Similarly, Qin, Shuhao, Heerink, and Futian (2008) define culture as customary beliefs and values that ethnic, religious, and social groups transmit fairly unchanged from generation to generation. In other words, culture is a system of shared beliefs, values, customs, behaviour, and artefacts that the members of a society use to cope with their world and with one another, and that are transmitted from generation to generation through learning. However, culture that is inherited by an individual from previous generations rather than voluntarily accumulated, such as religion and ethnic background, can largely be treated as exogenous for that individuals life. A Religion is defined by Nath (2007) as a set of common beliefs and practices generally held by a group of people, often codified as prayer, ritual, and religious law. Religion also encompasses ancestral worshiping or cultural traditions, writings, history, and mythology, as well as personal faith and mystic experience. However in this paper culture will be referred as the customary beliefs and values that ethnic, religious, and social groups transmit fairly unchanged from generation to generation. Historical Perspectives on Economics and Culture The debate on culture as influencing economic behaviour started with the classical economist such as Adam Smith and John Mill who used culture to explaining economic phenomena. The former in the Theory of Moral Sentiment advocated that culture is an important factor in explaining the Wealth of Nations and the later regarded cultural behaviour as more important than the pursuit of personal interest. In contrast Karl Marx advocated that the technology changes determine the kind of structure dominant in the culture. That is the hand mill produces feudal society and steam mill produces capitalism (Marx 1859). Moreover, Weber (1905) regarded religions as a key factor for economic development. He defended that protestant religious taught that the creation of wealth should be regarded as a duty. Weber also recognized that culture plays an important role in influencing in pursuing wealth through production and establishment of markets. Other researchers non economists such as Hirschman (1967) also found a link between culture and economics, and culture causes differences in economic output within and across countries. Banfield (1958) suggests that culture is reason for underdevelopment in Southern Italy, that is, the pursuit of narrow self interest by the population contributes to underdevelopment of the region. Consequently the Italian government imposed identical forms of governance within the country, however, the areas with poor government intervention continued to perform poorly. In the late 1990s and early 2000s neoclassical economist went beyond the formal institutions into informal ones and started considering explicitly culture as a key factor to explaining economic phenomena. Therefore, Fukuyama (1996), Landes (1998) and Guiso, Sapienza Zingales (2006) emphasized the link between culture and economic outcomes. In their studied they found that cultural factors such as honesty, trust, tenacity and tolerance drive to success of countries economies. Empirical evidence Studies conducted by Guiso, Sapienza Zingales (2005) found that beliefs and religious are highly correlated to trust, thus, when it is associated with savings, taxation or trade it turnout to impact positively the economic outputs. Similarly, Tabellini (2007) studied the effects of culture on economic development in Europe and found that religious values and beliefs have a significant impact on economic success. Weber advocated that culture have a significant influence on economic performance. He further argued that protestant religious contributes greatly to the capitalist accumulation. Likewise, Landes (1998) and Putnam (2000) found that culture (beliefs and values) explain the differences in economic performance across countries. However the later put more emphases in the role played by social capital (trust) in stimulating trade and government efficiency. Carroll, Rhee, and Rhee (1994), studied the effects of emigrant culture on savings in Canada and fund that culture affects savings behaviour. Barro Mc Cleary (2003), Tabelline (2009) studied the effects of culture on economic growth. The former stressed more on the degree of religiosity by capturing the church attendance and religious beliefs in hell and heaven, they found that the magnitude of church attendance and the degree of religious beliefs explain significantly the differences in growth performance across countries. Thus, the religious belief matter to explaining growth. The later, emphasised on the degree of trust across European countries and found that regional variation on trust explain differences in growth rate. Algan Cahuc (2007) demonstrated that cultural behaviour toward families has an impact on employment patterns of different regions in the Organization for Economic Cooperation and Development (OECD) countries. They also show that civic culture and ethnicity has an influence on the structure of the labour market institutions including employment benefits and protection. Relationship between culture and economics behaviour In general most of the studies done on culture and economics found a relationship between culture and economics, however, they confronts with the problem of causality since it is likely to go in both directions. According to Becker (1996:16) Individuals have less control over their culture than over other social capital. They cannot alter their ethnicity, race or family history, and only with difficulty can they change their country or religion. Because of the difficulty of changing culture and its low depreciation rate, culture is largely a given to individuals throughout their lifetimes. likewise, religious practices respond slowly to economic conditions (Botticini Eckstein 2005). Culture affects economic behaviour in different ways, however, this paper will focus on production, institutions. Culture and Production Norms and values of groups or individuals varies significantly not only within or across cultures but also within regions, industries or sectors, that is, countries can be more open to trade or be more flexible in decision making than others, and can also allow external influence. Firms may have more or less hierarchical structure than others, for example the British economy had a decline in the growth rate in 20th century due to the fact that the middle an upper class values did not consider practical education and technological innovation (Fernà ¡ndez 2006). In Latin America, the population was characterised as having the culture of poverty, thus, the poverty was not a result of structural economic problems but caused by social beliefs that dominated the groups, they would prefer not to engage into economic activities (Barro Mc Cleary (2003). Similar cases occur in some areas Mozambique where although the population grow and hundreds of cows and goats they would prefer not to eat or even sell due to cultural beliefs. Other studies focussed on studying how culture of elite are as compared to poor and found that some elites would prefer leisure to investment thus, impacting economic outcomes. Culture and Institutions Studied found that social capital or culture affect the way institutions in different countries are set and managed that is institutions are dependent on the problem faced by each societal groups including cultural beliefs and preferences, individualists or collectivists (Greif 1994) . For example in post war Japan and Korea engaged into industrial policy to encourage economic growth whereas adopted economic planning bureaucracy, however this kind of institutions are not inclusive to the entire populations and is vulnerable to promote rent seeking. Similarly, institutions set in Latin America and Africa were also not effective compared to the North America counterparts. However, empirical results suggest that causality effect is likely to go in both directions. That is culture affects institutions and institutions also affects the evolution of the culture (Fernà ¡ndez, 2006). Conceptual Link of Culture to Growth Performance Hypothesis 0: Culture impacts on economic behaviour of societies with high degrees of trust, respect, and self-determination. Hypothesis 1: Culture has no impact on economic behaviour of societies with low degrees of trust, respect, and self-determination. The above definite of culture (section 3) helps in understanding how would culture affect economic outcomes. According to Porter (2000:14) economic culture are the beliefs, attitudes, and values that bear on economic activities of individuals, organizations, and other institutions. Therefore, the variables that compose the culture (trust, respect, self determination and religion) can constrain the economic behaviour and function as rules governing the interaction between individuals, employment, market operations. Trust Trust influences economic performance in different ways. According to Boettke (2009: 437), Knack Zak, (2001), trust affects economic outcomes through decrease in transaction cost, thus when an individual is trustworthy he reduces the monitoring cost and secures property rights. Moreover, high degrees of trust are consistent with high economic performance and development. In contrast lower degrees of trust would result in lesser trading networks and small market operations caused by the increased monitoring and transaction costs. For example trust is mostly relevant when the transaction involves unknown counterparts (Fukuyama 1996, Francois Zabojnik 2005). Using data on relative trust within the European countries Guiso, Sapienza Zingales (2006) studied the effects of trust for bilateral trust among the European counties and found that, countries that trust each other tend to trade more goods and financial assets as well as engage more in direct investment compared to other countries, thus, impacting in the economic performance of the countries. In summary, under circumstances of good environment (trustworthiness) individual would dedicate their time in economic activities whereas under poor environment (untrustworthiness) individual engage into unproductive activities due to lack of incentives. Self determination and Respect Self determination is a measure of control over individual determination of their actions. If individual can control their choices, that is, predict success or failure as a result of own actions, then, they will be more innovative, and would invest and work more hard and carefully for greater returns. Therefore, high degrees of innovation combined with high levels of productivity would lead to high growth performance as well as economic growth (Tabellini 2009, Coyne Williamson 2009) Respect, is also an important factor since it measures the morality within individuals and societies. High degrees of respects imply high levels of tolerance and lower level of respect would result in poor interaction within individuals and societies. Therefore, high degrees of tolerances connote acceptable attitudes towards trade partners, thus, boosting and increasing the market and increasing economic performance. In contrast lower tolerance would reduce economic interactions and trade can be hindered (Platteau 2000). Moreover, Coyne Williamson (2009:13) state that in societies with lower levels of social capital, and hence lower levels of respect, the extent of the market will be limited to close kin and friendship networks. Clearly, higher degrees of respect should increases economic outcomes. Religion The impact of religious on economic can me measured by the rate of church attendance and the religious belief about afterlife in hell or heaven. Individual who attend churches at regular bases tend to build better economic attitudes (respect and self determination and trustworthiness), thus impacting positively on economic outcomes. Similarly, those groups who believe in heaven and hell also tend to participate effectively in church services so as to build confidence on heaven, thus influencing positively economics outcomes through trust, respect and self determination (Barro and Mitchell 2004). Weber in his study on the rise of the capitalism found that the industrial capitalism developed rapidly in the protestant Europe and North America. He also fund that Hinduism and Buddhism were promoting asceticism, thus, hindering technical innovation and impeding adaptation of foreign innovation, therefore not promoting economic growth and development of these groups. Similarly, Williamson (2009) asserts, that the failure of India to achieve a successful development rate was due to laws of Hinduism that do not allow individual motivation and commitment to perform secular roles. However, there were some Hindu who did not abide with the rules of the Hinduism and show an inclination to economic activities. These minorities are the ones who boosted the modern Muslim in Indonesia. Moreover, religion also affects economic behaviour through, honest, work ethics and openness to people. For most religious hard work is a norm and should be done diligently. Additionally, work helps people to stay away from immorality, unproductive activities so that they maximize their time in economic activities. Being unproductive is connoted to evils. That is religion increases economic growth through promotion of positive attitudes towards, trust honest and self determination, and reduction of corruption and criminality (Guiso et al. 2003). Religions may also impact negatively on economic behaviour through restriction on credit markets, profit, resources accumulation, as well as interest. Some religious may allocated massive time and resources on church activities including the construction of cathedrals, thus, deviating resources from economic activities (McCleary 2008). Similarly Beed and Beed (1999) argue that some fundamental Christian and Islamic terrorists promote violent and intolerant behaviour and civil unrest among Christians and non Christians, which impact negatively on the values and norms of secular economics. Conclusion This paper attempts to answer the question does culture influence economic behaviour? The paper found that yes Culture affects significantly the economic behaviour. Cultural behaviour also shapes the structure of institutions in a country. Culture affects positively economic performance through trust, respect, self determination religious and institutions. However, it faces problems of causality, thus it is likely to go in both directions from culture to economics and from economics to culture. Trust affects economic behaviour through decrease in transaction cost, thus when an individual is trustworthy he reduces the monitoring cost and secures property rights. Moreover, high degrees of trust are consistent with high economic performance and development. In contrast lower degrees of trust would result in lesser trading networks and small market operations caused by the increased monitoring and transaction costs. Self determination promotes innovation, investment and hard work and diligence for greater returns. Therefore, high degrees of innovation combined with high levels of productivity would lead to high growth performance as well as economic growth. Moreover, high degrees of respects imply high levels of tolerance and lower level of respect would result in poor interaction within individuals and societies. Therefore, high degrees of tolerances connote acceptable attitudes towards trade partners, thus, boosting and increasing the market and economic performance. Religious beliefs also have a causal relationship with economic behaviour. It promotes economic growth through teaching of positive attitudes towards productive activities including hard work, trust, respect and self determination and absenteeism from unproductive activities. For example Barro and McCleary found that religious beliefs are important factors to explaining economic behaviour and to a certain extent why some nations develop than others. For example Protestantism in Europe and North American has boosted economic growth in these regions through promotion of capitalism. In contrast other studied found a negative effect of religion on economic. Thus, Beed and Beed found that Hinduism and Islam hindered growth and development of South Asia through promotion of violent behaviour.

How Thomas Hobbes and John Locke influenced Enlightenment Thinkers Essay

The Age of Enlightenment saw many great changes in Western Europe. The Age of Enlightenment or simple â€Å"the Enlightenment† was an intellectual movement during the 18th century. Its purpose was to reform society and to advance knowledge using reason and the scientific knowledge. It supported scientific thought and opposed superstition with its favorite target being the Catholic Church. The phrase was frequently used by writers of the period itself, implying that they were emerging from centuries of darkness and ignorance into an enlightenment period fueled by reason and science. The ones who sparked the enlightenment can be traced to the 17th century. They include the two political philosophers Thomas Hobbes and John Locke. Thomas Hobbes was born on April 5, 1588 and he was best known for his work on political philosophy. His book Leviathan established the foundation for most of Western political philosophy. In Leviathan, Hobbes set out his doctrine of the foundations of states and legitimate governments. Much of the book demonstrates the necessity of a strong central authority to avoid chaos and disorder. Hobbes hypothesizes what life would be like with no government, a state which he calls the state of nature. In that state, each person would have a right to everything in the world. However, he argues that it would lead to a â€Å"war against all† because he believed that all people were evil and selfish. In order to avoid this state, people establish a civil society and conceive a social contract. According to Hobbes, society is a population under a supreme authority. Thomas Hobbes is a supporter of absolutism but he also developed some of the fundamentals of liberal thoughts such as the rights of an individual and equality for all. He was also one of the founders of modern political science as well. His understanding on humans as being matter and following the same concepts and laws as other matter remains extremely influential. John Locke was born on August 29, 1632 and he was one of the most influential English philosophers during the enlightenment period. Locke’s theory of mind is referred to as the origin of conceptions of â€Å"self† and â€Å"identities†. He theorized that the mind is a blank slate and that we were born with only instinctive ideas and that knowledge is only derived from experience. The founding fathers of the United States used many of his political ideas as the bases for the declaration of independence. Locke believed in a democratic rule and that everyone is entitled to their own rights and liberty. He thought that nobody should have absolute power so he came up with the idea of â€Å"separation of powers† meaning that the church and judicial system operate independent of the ruling class so theoretically no one can commit a crime and get away with it. Even though Thomas Hobbes and John Locke were both influential social contract theorists and great political philosophers, their ideas completely contradict each other. While Locke believed that humans were born with a clean slate and only gain knowledge through experience and experiment, Hobbes theorized that all humans were born with an evil and selfish nature which cannot be contained without a supreme authority to rule. In terms of political power, Locke believed in democratic rule while Hobbes believed in an absolute power to rule over the evil and selfish humans for if there is no absolute power, our savage instincts will take over and we will do whatever it takes to satisfy our greedy nature. As for rights, Locke believed all men are equal rights but Hobbes concluded that we should give up our rights to the government in exchange for protection. The Enlightenment was a great step in humanity to make strides in science and let reason explain our lives. Enlightenment ideas and works have been especially influential in politics. Many of the world’s democracies are built on the ideas of Locke and other political philosophers in the enlightenment period. Democratic nations, such as the United States are founded upon enlightenment ideas such as individual rights and liberty, the rights of citizens, and people’s rights to participate in the government. However, different political philosophers have different ideas about what’s best for their government. For instance, Thomas Hobbes believed in absolute monarchs, an idea which is still used today in places like Canada, Japan, Spain, and the United Kingdoms. The Enlightenment completely revolutionized the way people have thought about religion, politics, and science. It was one of the greatest events in history because it gave people the idea to challenge what they’ve always been taught to be right. It gave people a mind of their own and not fall to one supreme ruler. The legacy of the enlightenment shall never be forgotten.

Be the First to Read What Gurus are Saying About Challenge Essay Topics

Be the First to Read What Gurus are Saying About Challenge Essay Topics College application essays are often the most difficult portion of the application approach. So all of the XAT aspirants, be ready to compose an essay on the advantages and disadvantages of GST implementation in Indian economy. Colleges are seeking a feeling of maturity and introspectionpinpoint the transformation and demonstrate your private growth. Conclusion needs to be concise and logical. Thesis Statement Thesis statement holds lots of importance in any sort of essay writing. It's possible for you to restate your argument, which is a rather common practice amongst essayists. There's yet another thing that may be carried out in conclusion. Don't be scared to express some contradictory ideas and ideas, so long as you find it possible to defend your opinions. Needless to say, some suggestions and beliefs will result in better essays than others. Top Choices of Challenge Essay Topics The introductio n is the opening paragraph which should incorporate a hook that has the power to catch the audience's interest. Thus, to compose a great essay you've got to brainstorm all thoughts concerning your life experiences. Lastly, the detail of real speech makes the scene pop. Relevant Topics that are related to your society will engage the reader in the most effective possible way. The Challenge Essay Topics Cover Up Writing the college application essay is a difficult gig. Students don't need to write about a significant turning point in their essay, Soule states. Unlike in the majority of other varieties of essay, you don't will need to generate a point or prove your opinion on the subject-matter is accurate. If you compose a fantastic essay, what you have will be sufficient. Bridget's essay is quite strong, but there continue to be a couple little things that could be made better. There are many steps which you should take as a way to compose an outstanding essay. Instead of just immediately writing about your argumentative essay topic, you first have to think about what you're likely to put back on your paper through a procedure of brainstorming and pre-writing. When you've got a completed outline, you'll have a step-by-step guide that it is possible to follow until you're done writing. When writing essays, the very first step is to produce a very good topic to write about. The Bizarre Secret of Challenge Essay Topics At precisely the same time, you will impress the college admissions folks greatly if you are able to present your capacity to learn from your failures and mistakes. None of the normal ones seemed to do the job. Often you'll get far better grades if you are able to write on something important. Most students don't know how to deal with the stress they've so they use alcohol, drugs or cheating for a stress reliever. It might be hard for you to think of an original topic about life because so many folks have written about it already. There are instances when you feel you have done everything right and nothing can fail and in addition, there are times when you think you have done everything wrong but have everything else in life go right. After discovering our website, you will no longer will need to bother friends and family with these kinds of requests. So my pals, don't quit. The government ought to be able to help it become available for the citizen. Write in such a fashion, that you'll be interested to read it. To the contrary, you can explore mental health tips and keep upbeat. It may be difficult to overcome let alone keeping the shock of the challenge. Keep in mind that the objective of a college admissions essay is to aid admissions officers get to know you. Explain your commitments, and you are going to be the sort of student colleges find immensely attractive. They are not looking for perfect pe ople. The New Fuss About Challenge Essay Topics Mentioned following are some of the helpful strategies to remember whilst selecting a topic. Students may find so many research topics readily available online.

Love And Death By William Shakespeare - 924 Words

Probably the two most popular topics in poems or sonnets are about love or death. The brilliant William Shakespeare also considered England s national poet, was an English actor, poet, and playwright who is considered to be the greatest writer in the English language during the Renaissance era. He wrote thirty eight plays, one hundred and fifty four sonnets, and two long narrative poems. Many of Shakespeare’s sonnets, poems, and plays focuses on the topic of love including the Sonnet 116 â€Å"Let me not to the marriage of true minds.† John Donne was an English poet born in 1572. Donne had two stages in his life when he was young he was often called a womanizer and rebellious, but as he got older he became more religious and was a dean of St. Paul’s Cathedral, he married and had twelve children. Most of his subjects in his poems included love, death, sexuality, and religion. Donne wrote religious poems but also secular, erotic poems about love. After his wife die d after child birth he wrote a good bye poem to her entitled â€Å"A Valediction Forbidding Mourning.† Although love and death can be completely different or go hand in hand, Shakespeare’s sonnet about love and Donne’s poem about death exhibit how people perceive love and death in different ways but also having common similarities. â€Å"Let me not to the marriage of true minds† by William Shakespeare is an English/Shakespearean Sonnet about true love, a soul mate. The first four lines talk about how no obstacle can changeShow MoreRelatedSonnet 71 Analysis Essay1281 Words   |  6 PagesLaura ENG-260 11 December 2011 William Shakespeare’s Sonnet 71 William Shakespeare is one of the most well-known writers of all time. His sonnets are timeless and his plays are performed again and again. Much of his history is known, but can also be considered a little cloudy. He seemed to be a sarcastic man not necessarily loved by all. 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