The Soft Stuff of Institutional Development: Culture, Cohesion, and Economic Freedom

What are the effects of culture on economic institutions? Many see an essential role for culture in institutional development, a role that may be negative or positive. This paper systematically considers the effect of twelve dimensions of culture on economic freedom. No clear pattern emerges among the various dimensions of culture; adjacent dimensions of culture are shown to correlate quite differently with economic freedom. This analysis is partly framed in terms of the debate on the relationship between migration, culture, and institutions, and casts doubts on positions that these variables are as tightly or as consistently related as they are at times portrayed.