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)

• OECD countries:
• Economically developed
• Well-developed formal institutions
• Market economies highly dependent
• n formal institutions to function

through frameworks & reforms

• Formal institutions:
• High correlation coefficient
• Ingrained into systems (e.g.

Government, laws and regulations)

• Dictate runnings of economic system

Informal Institutions (Less Significant)

• Individualism:
• Medium correlation coefficient
• Innovation stemming from individualism

affects economic growth to a lesser extent than policies introduced by formal institutions

• Trust:
• Medium correlation coefficient
• OECD study revealed trust is deteriorating

in many OECD countries, progressively weakening its correlation coefficient to economic growth

• 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)

• Non-OECD countries:
• Developing countries
• Weak formal institutions
• Formal institutions:
• Low Correlation Coefficient
• No effective function → Lack of

policies to drive economic growth

• Corruption and lack of strong judicial

system → Distrust of system → Failure

• f policies to promote economic

growth Informal Institutions (More Significant)

• Individualism:
• High correlation coefficient
• Non-OECD countries: Many live in poverty

in developing nation → Individualism drives innovation to break cycle of poverty → Drives economic growth

• Trust:
• Low correlation coefficient
• Low level of trust in nation and governing

body due to weak governing body → Not driving factor of 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