Grace Liu Zinan (Victoria Junior College) Research : Uses - PowerPoint PPT Presentation

Vivien Tan Ziyi (Hwa Chong Institution Junior College) Grace Liu Zinan (Victoria Junior College)

 Research : Uses within-country variation at the regional level to explore the link Historical institutions → culture → economic development  Conclusion : Cultural differences are important as they bring about the different functioning of the same formal institutions

 Generalized trust : Values, attitudes or social norms that produce trust towards those the respondent does not know when certain conditions are met  Source of data : World Values Survey GDP year 2000 2005 2010 Correlation coefficient 0.502532704 0.446180905 0.483388746

 Religiosity : Degree of religious involvement of a person  Source of data : World Values Survey GDP year 2000 2005 2010 Correlation coefficient -0.349768526 -0.370306705 -0.402877631

 Individualism : Emphasis on personal achievement and freedom, awarding social status to personal accomplishments  Source of data : World Development Indicators GDP year 2000 2005 2010 Correlation coefficient 0.559875753 0.561832229 0.5981096

1. Formal institutions play a more significant role in economic development in OECD countries 2. Informal institutions play a more significant role in economic development in non-OECD countries

 Individualism : Medium correlation coefficient  Trust : Medium correlation coefficient  Religiosity : Low correlation coefficient  Formal institutions : High correlation coefficient

Formal Institutions (More Significant) Informal Institutions (Less Significant)  OECD countries :  Individualism:  Medium correlation coefficient  Economically developed  Innovation stemming from individualism  Well-developed formal institutions affects economic growth to a lesser extent  Market economies highly dependent than policies introduced by formal on formal institutions to function institutions through frameworks & reforms  Trust:  Formal institutions:  Medium correlation coefficient  High correlation coefficient  OECD study revealed trust is deteriorating in many OECD countries, progressively  Ingrained into systems (e.g. weakening its correlation coefficient to Government, laws and regulations) economic growth  Dictate runnings of economic system  Religiosity:  Low correlation coefficient  Pew Research Center: Weak religious commitment in OECD countries → Weak effect on behavior → Not driving factor of economic growth

 Individualism : High correlation coefficient  Trust : Low correlation coefficient  Religiosity : Medium correlation coefficient  Formal institutions : Low correlation coefficient

Formal Institutions (Less Significant) Informal Institutions (More Significant)  Non-OECD countries:  Individualism:  Developing countries  High correlation coefficient  Non-OECD countries: Many live in poverty  Weak formal institutions in developing nation → Individualism drives innovation to break cycle of poverty  Formal institutions: → Drives economic growth  Low Correlation Coefficient  Trust:  No effective function → Lack of  Low correlation coefficient policies to drive economic growth  Low level of trust in nation and governing  Corruption and lack of strong judicial body due to weak governing body → Not system → Distrust of system → Failure driving factor of economic growth of policies to promote economic growth  Religiosity:  Medium correlation coefficient  Pew Research Center (2018): Developing country → Large proportion of religious people → Religion has a great effect on behaviors and economic transactions → Driving force of economic growth

1.Formal institutions play a more significant role in economic development in OECD countries 2.Informal institutions play a more significant role in economic development in non-OECD countries