There are lots of things that are important for a good life and a prosperous, well-functioning society, including family and community. But something else that belongs on the list, at least if you want more growth, is individualism.
Here’s an excerpt from a new study by two scholars at the University of California at Berkeley.
The model shows that individualism has a dynamic advantage leading to a higher economic growth rate… We provided empirical evidence of a causal effect of individualism on measures of long run growth (output per capita, productivity) and innovation by instrumenting individualism scores with the frequency of blood types which are neutral genetic markers and plausibly satisfy the exclusion restriction. Parents transmit their culture as well as their genes to their children so that genetic data can serve as proxies for vertical cultural transmission and it is unlikely that there is a direct feedback from e.g. output per capita to genes. Since that research shows a powerful effect of culture on long run growth, the key question is what dimensions of culture other than individualism/collectivism matter for long run growth. In this paper, we look at the main existing cross-country measures of culture and analyze their effect on output per capita. We find essentially that only individualism has a robust effect. …We conclude from this exercise that the individualism-collectivism dimension is the central cultural variable that matters for long run growth.
(h/t: Garett Jones)
