I am writing this post in the wake of Florian Biermann’s excellent piece on the role of culture in the economic life of Georgia. The debate itself is infinitely fascinating, as culture is truly one of those complex, stupendously vast concepts, which I find very difficult to grasp, let alone define or analyze.
Cultural attitudes play a crucial role in the way human beings interact with one another, the way they define their values and priorities. From the economic perspective, culture has a significant bearing on the functioning and effectiveness of both political and economic institutions - which in turn can help explain a large amount of variation in the income levels between countries.
Following this debate, I observed that culture is often taken to mean some permanent characteristics of a nation or a society, something resembling the rigid structure of Egyptian pyramids, giving way to a kind of cultural fatalism in development economics.
According to this interpretation, the “northern” nations such as Germany or Switzerland, with culturally strong sense of work ethics and social responsibility, would be destined to outperform the more relaxed and less cohesive “southern” societies of Europe – Greece, Portugal, Spain, etc.
Yet, I find that in the larger scheme of things, cultural attitudes while enduring, do exhibit very different degrees of persistence. Cultural traits, good or bad, are essentially adaptations to the external stimuli. Sometimes these stimuli reflect more permanent external conditions: geography, climate, quality of soil, etc. Yet, other cultural traits are often brought about by less enduring external shocks – wars, conquests, crises, structure of economic institutions, quality of enforcement.
Consider for example the case of my native Ukraine, which inherited all the institutional shortcomings brought about by the years of the Soviet rule. In the system where individual initiative and enterprise were severely discouraged, tardiness, absenteeism from work, were big drains on the labor productivity. We were by any definition a “lazy” nation. After independence, the free market system forced different kinds of incentives upon people. Nowadays, Western Europeans coming to Ukraine are amazed that most of the food stores are open 24 hours. The sellers on the outdoor markets work longer than 8-hour shifts, often in extreme weather conditions. Domestically owned import oriented companies have solved the problem of tardiness or absenteeism among their workforce. Suddenly, a different type of work culture has emerged, or perhaps has been re-discovered.
Another example of shifting cultural attitudes came to my mind while I was visiting the Biennial Exhibition of Contemporary Art in Kyiv. One of the installations by a Chinese artist detailed the “culture of poverty” – something he argued run in the veins of her parents and grandparents. The installation was essentially an enormous room, filled with organized piles of junk – old newspapers, boxes of varying shapes and sizes, chairs, wooden window frames, even a pile rotting cabbage. The exhibit reminded me how my grandparents, who had lived through the hardships of wars and famines, also used to collect every piece of scrap that could prove useful in the household. I was calculating in my mind how many years it would take for China to shift from the “culture of poverty” to the “culture of consumption” – and what consequences this shift might have for our planet.
In light of this, I think is it important to think of culture as a kind of ecosystem, a river, fluid and potentially fragile. It is important not to take the cultural traits we can be rightfully proud of for granted, but rather cultivate and cherish them. It is equally important not to get hung up on the “bad” traits – such as propensity for nepotism, tolerance for corruption, or poor work ethics. The right kind of policies and incentives could go a long way toward changing our world and our culture for the better.
Comments
Very good set of ideas Yasya. In conjunction with Florian's earlier piece (and his replies) there is plenty of material here to think about. While Florian has talked about the static aspects of culture you have pointed out to even more challenging material- the dynamics of culture. These are cutting edge ideas and there would seem to be merit in formalizing them further. It might be useful to think of a working but more formal definition of culture (both Florian and you shy away from this). Does different cultures simply mean different preferences? or different stock of habits as in many macro models? or something else? A formal definition will allow you to draw upon already existing models or point out the way towards enriching them. Glad to know that you people are grappling with these difficult ideas. Keep it up.
Thank you, Sanjit, very interesting questions. A formidable challenge to provide even a working definition of culture, but definitely worth thinking about.
An extremely interesting blog post that got me thinking real hard about a whole bunch of related questions (stepping in the rivers of Ukrainian work habits and Georgian decency, how can "culture" be defined for analytical purposes) ...
No time to write this or next week but will definitely come back the week after. Hope the discussion will not die out completely by then...
Culture could be thought as anything and everything that changes very slowly or slower than other variables of interest. Thus, the "Georgian decency" could be conceived as a cultural characteristic if we observe that it is resilient to changes even under the pressure of civil war, utter economic destruction, etc. Corruption clearly has nothing to do with culture as it can be eradicated almost overnight with the right kind of policy. It could be seen as an "optimal" reaction to a particular institutional setup.
Following my definition, the change in Ukrainian work habits is also not something cultural. The underlying culture is still the same, whatever it is, but the circumstances changed. By the way, in countries that have a short agricultural season (certainly Ukraine and Russia would be included in this category) peasants were historically used to frequent changes of pace: from very intensive in summer to near-hibernation and drunkenness from late fall to early spring, when there is not much to do other than fishing and occasional hunting.
I am still thinking of what would those "permanent" features of the Ukrainian people that have a causal effect on their institutions, their ability to engage in economic activities, interact with other nations and handle internal divides...
Eric, very interesting things to think about! I want to comment on just one part so far.
Honesty is a complex trait. Two things might be formative here: first, in a very small society (or a small market if you wish), the reputational effects may be much stronger, as many games are repeated games drawing on a limited set of players. In a larger market, where the set of players changes frequently, many games are one-shot games (this is quite intuitive, I think if you compare the reputational effects in a small village relative to a large metropolis).
To give you a real life example: when my mom was visiting Tbilisi for the first time she noticed that a kilo of meat is “heavier” in Tbilisi than in Kyiv! I was really puzzled, until the answer dawned upon me – Georgians are a very tightly knit society, and the market, even in Tbilisi is small. If a local housewife tells her friends and relatives about a cheating merchant, you may be certain that the business will go under. In Kyiv, in contrast, even if I let everyone of my acquaintance know, the merchant will still have enough market to draw upon. Hence, the equilibrium where everyone is shrinking a kilo emerges.
Secondly, when I think about Morocco, which I imagine is also composed of clusters of tightly knit communities, it may be that due to historical circumstances, they treat foreigners as ‘outsiders’, and hence it may be permissible to deceive or swindle them, whereas it may not be permissible to cheat someone of your own kind. Georgia, for a combination of historical and geopolitical reasons is a kind of culture that does not insulate foreigners, and is accustomed to elevating a visitor to the status of someone of “their own kind”, i.e. a “guest”, for the time the person remains a in the place.
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I think that culture is rather pyramid-like. Otherwise, we wouldn't call it culture, would we? However, pyramids can be built, destructed, and modified. This is why culture matters for economic analysis. If it was something unchangeable and entirely exogenous, it would be an uninteresting parameter from an economic point of view.
Concerning Georgian decency, I am quite sure that somebody who visited Georgia in the 1990ies would not have come to the conclusion that Georgians are particularly decent. However, Georgia shows that a culture of decency and integrity can be established faster than one would think.
Many countries which have problems with corruption, like Greece, should look to Georgia and how they managed to establish a culture of integrity. In general, economists should include cultural parameters in their toolbox of policy recommendations.