Does Culture Matter for Development?

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.