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Culture & Institutions Summary (lectures & articles)

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Radboud Universiteit Nijmegen (RU)

This document highlights the articles and lectures of the masters course Culture & Institutions at the Radboud University. Each article consists of a list of definitions, results, and implications of the article. This summary gave me a good grade --> 8 Good luck

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Culture & Institutions (MEC050)
Inhoudsopgave
INTRODUCTION AND METHODOLOGICAL ISSUES (PARTS I & II).......................................................................2
LECTURE 1: CULTURE, INSTITUTIONS, AND ECONOMICS..................................................................................................2
Recommended literature: Beugelsdijk & Maseland (2012). Culture in Economics, Ch. 1-4............................2
Article: Culture & Institutions (Alesina & Giuliano, 2015)...............................................................................5
LECTURE 2: CULTURAL DISTANCE AND THE MULTINATIONAL FIRM.....................................................................................6
Article: Cultural distance and firm internationalization (Beugelsdijk et al., 2018).........................................6
LECTURE 4: INDIVIDUALISM AND ECONOMIC PERFORMANCE...........................................................................................8
Article: Culture, institutions, and the wealth of nations (Gorodnichenko & Roland, 2016)............................8
Article: Evidence for a stronger work ethic in cold climates (Oumer et al., 2020)........................................10
LECTURE 6: FAMILY AND ECONOMIC OUTCOMES.........................................................................................................13
Article: Family Values and the Regulation of Labor (Alesina et al., 2015)....................................................13
The Deep Roots in Inequality (Kumon, 2021)................................................................................................15
LECTURE 8: BELIEFS, COGNITIONS AND ECONOMIC PERFORMANCE................................................................................16
Article: Was Weber wrong? Human Capital Theory and Protestant Work Ethic (Becker & Woessman, 2009)
.......................................................................................................................................................................16
Article: The effects of language on economic behavior (Chen, 2013)...........................................................17
SPECIALIZED SESSIONS (PART III).................................................................................................................. 19
LECTURE 9: DIVERSITY...........................................................................................................................................19
Article: Lineage Organizations and the Scope of Trust in Sub-Saharan Africa (Moscana et al., 2017).........19
Article: The ‘Out of Africa’ hypothesis, human genetic diversity, and comparative economic development
(Ashraf & Galor, 2013)...................................................................................................................................20
LECTURE 10: CULTURAL DIFFERENCES AND THE MNE: CORRUPTION..............................................................................22
Article: MNEs and corruption: The impact of national institutions and subsidiary strategy (Spencer &
Gomez, 2011)................................................................................................................................................22
Article: Multinational enterprises, political institutions and violence: a case study from Mozambique
(Mairoce et al., 2020)....................................................................................................................................26
LECTURE 11: CULTURE, HISTORY, AND POLITICAL INSTITUTIONS....................................................................................28
Article: The Social Determinants of the Rule of Law: A Comparison of Jamaica and Barbados (Dawson,
2013)..............................................................................................................................................................28
Article: Weak, Despotic, Or Inclusive? How State Type Emerges from State versus Civil Society Competition
(Acemoglu & Robinson, 2023).......................................................................................................................31
LECTURE 12: CULTURAL DISTANCE AND INSTITUTIONAL TRANSFERS................................................................................34
Article: Transnational transfer of strategic organizational practices: A contextual perspective (Kostova,
1999)..............................................................................................................................................................34
Article: Institutional stickiness and the new development economics (Boettke et al., 2015).......................37
Article: When do institutional transfers work? The relation between institutions, culture, and the
transplant effect: the case of Borno in north-eastern Nigeria (Seidler, 2014)..............................................39
LECTURE 1 SLIDES......................................................................................................................................... 41
LECTURE 2 SLIDES......................................................................................................................................... 46
LECTURE 4: NORMS: FAMILY......................................................................................................................... 50
LECTURE 5: COGNITIONS & BELIEFS.............................................................................................................. 54

,Introduction and methodological issues (Parts I & II)
Lecture 1: Culture, institutions, and economics
Recommended literature: Beugelsdijk & Maseland (2012). Culture in
Economics, Ch. 1-4
Chapter 1: Define culture
Culture is defined as those behavioral and ideational structures that are deemed essential to
the constructed identity of a community.

Chapter 2: How culture disappeared from economics
From culture to progress
Culture’s meaning evolved over time, originally related to individual moral and intellectual
development. In the seventeenth and eighteenth centuries, it transitioned from individual
development of entire societies. This shift laid the foundation for theories about culture’s
role in societal development, with culture seen as a driving force.

The “essentialization” of culture
In the late eighteenth century, an essentialist view of culture emerged, emphasizing the
unique, traditional, and inherent aspects of a society’s culture. Scholars in the “Historical
School” rejected the idea of universal self-interest and sought to understand the ethics and
motivations of individuals as the basis for economic functioning.

The “politicization” of culture
In the 19th century, the distinction between Kultur and Zivilisation fueled an essentialist view
of culture, as seen in the German Historical School. Karl Marx critiqued culture, religion, and
values from a political-economic perspective. Marx’s analysis focused on capitalism. He
emphasized the structural and economic basis of society, where culture, religion, and social
values supported the existing political-economic order.

The “traditionalization” of culture
Imperialism led to a redefined concept of culture. Western powers labeled themselves as
“civilized”, while other were “savage”. Culture now signified deviation from universal
development, linked to tradition and irrationality. It supported Western dominance by
contrasting their rational behavior with cultural practices elsewhere.

,Key historical trends:
- Renaissance and enlightenment (1500-1700): culture associated with moral
education
- Romanticism and nationalism (1800-1900): shift towards specific collective identities
- Imperialism (1900): emergence of the distinction between “cultural” and “cultured”

Cultural meaning and economic thoughts:
- Adam Smith (enlightenment): culture linked to collective moral development
- Roscher and German Historicists (romanticism): introduction of the idea of stages of
collective moral development
- Weber (end of 19th century): culture associated with specific types of collective moral
development

Shift in the 20th century:
- Neoclassical economics: emphasis on universal structures of individual rational
choice, inheriting the concept of civilization.
- Veblen and institutional economists: continue attention to specific contexts and
deviations from the economic norm

Modernization theory (post-WW2)
There was a shift towards formal mathematical methods. Economic development presented
as a technocratic project supporting capitalism. Emergence as a sub-discipline focused on
less developed countries. Modernization theory, cultural change integral to development,
but culture often seen as an obstacle. Some recognize the value of certain cultural traits in
aiding development.

Chapter 3: Explaining the rise of culture in modern economics
The role of culture has experienced a dynamic evolution. From the early perception of
economics as ‘cultureless’ science to the contemporary resurgence of interest in the
interplay between cultural forces and economic dynamics. The narrative unfolds against the
backdrop of influential theories such as the economization of social science, the
sociologization of economics, and the emergence of new institutionalism and behavioral
economics.

Modern economics: the cultureless science
The quest for a ‘cultureless’ science, exemplified by figures like Gary Becker and Anne
Krueger, sought to homogenize human behavior into rational, self-interested agents. This
reductionist approach, while providing analytical clarity, overlooked the rich tapestry of
cultural nuances that shape economic phenomena. The book underscores how this

, perspective, rooted in neoclassical ideals, paved the way for a more detached and individual-
centric economic analysis, laying the groundwork for subsequent shifts in economic thought.

Culture’s comeback
Against the backdrop of the cultureless paradigm, a seismic shift occurred as cultural
considerations resurged in economic discourse.
- Sociologization of economics (Inglehart, Barro, and Albert): driven by a recognition
of cultural disparities shaping economic outcomes, market a departure from the rigid
rationality of neoclassical models.
- The Asian values: debate further propelled this cultural renaissance, introducing a
nuanced exploration of how cultural values intersect with economic development.
This resurgence not only acknowledged the influence of culture but also laid the
groundwork for the subsequent integration of culture into economic theories.

Meanwhile, in cultural sciences
Simultaneously, cultural sciences underwent transformative developments. The
interpretative turn in anthropology, led by figures like Cliffor Geertz, questioned traditional
approaches to studying cultures from an outsider’s perspective. This shift aimed to eliminate
colonial biases and emphasized interpreting cultures from the viewpoint of the native.

Edward Said’s orientalism, which exposed how Western depictions of the Orient were not
mere academic exercises but political acts that reinforced power dynamics. This critical
stance led to the ‘writing culture’ debate, marking a departure from comprehensive, static
views of cultures to an acknowledgement of dynamic, negotiated identities. Additionally, a
functionalist development emerged, exemplified by Mary Douglas’s grid/group model,
introducing cross-cultural schemas to categorize and explain cultural beliefs. This
functionalist approach emphasized universal dimensions of social relations and their impact
on cultural biases.

Implications for the real world
The article’s argument implies that acknowledging and understanding cultural influences on
economic dynamics is crucial for a comprehensive analysis. In the real world, this recognition
has implications for policymaking, cross-cultural business practices, and international
relations.

Chapter 4: Culture in economics: contemporary theoretical perspectives

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