The association between economic development indicators and cultural dimensions: the case of Turkey

Abstract

Over the past years, some developing countries have experienced substantial economic growth, diminishing the economic gaps with developed countries. Nevertheless, for other developing countries the gaps even widened. One of the factors that play role in these growth differences is argued to be culture. In past, economic development is found highly related with specific cultural dimensions. Hofstede identified four main cultural dimensions that reflect cultural differences across nations, basing on a large survey study with IBM employees. These cultural dimensions were power distance (PDI), individualism (IDY), masculinity (MAS), and uncertainty avoidance (UAI). In the current paper, we mainly aimed to investigate the association between Hofstede dimensions and qualitative (i.e. quality of life index) economic growth measures as well as quantitative growth dimensions (i.e, GDP, GDP growth rate, growth output measures on agriculture, manufacturing, industry and services) particularly for Turkey case. Then, we discussed specifically on the implication of these findings to recent economic growth of Turkey. We utilized countries' scores on Hofstede cultural dimensions in order to study cultural differences. The survey data Hosftede had analyzed covered value scores of employees in 70 countries (including Turkey) between 1967 and 1973. Our measure of quantitative economic growth indicators was taken from World Data Bank's database in World Development Indicators, 2006. Basing on findings in previous literature, we selected GDP per capita, GDP growth rate, and growth output rates on agriculture, manufacturing, industry and services from database. The qualitative growth dimension was the quality of life evaluations across countries. The Economists Intelligence Unit computed quality of life scores for countries basing on survey results of 111 countries. Quality of life index of a country measures the aggregate score of individuals on their life satisfaction level. Researchers suggested that quality of life scores have high correlations with GDP per capita and growth rate. We included scores of 68 countries in total, which had data on economic growth database, quality of life, and Hofstede survey study. We conducted a correlational analysis among four cultural dimensions (PDI, MAS, UAI, IDY), economic growth indicators of 2006 and quality of life indexes of 2007. Using Bonferroni approach, we corrected the significance level against Type-I error. We found significant positive correlations with individualism dimension and GDI per capita and quality of life index. Individualism correlated negatively with GDP growth rate and service output. There were significant positive correlations between power distance and agriculture output, as well as service output. Power distance negatively correlated with GDI per capita and quality of life index. Masculinity dimension and uncertainty avoidance did not correlate with growth indicators and quality of life index. We found that, in line with previous findings, high individualistic and low power distance countries have higher GDI per capita. Individualism goes along with lower GDP growth rate and service output. Countries of citizens who are more satisfied with their lives are more individualistic and have lower power distance. The implications of these findings were discussed for Turkey.