The relation between institutional and cultural factors in economic development: the case of Indonesia
Roger Spranz
A Lenger
N Goldschmidt
Abstract
This paper analyzes the relation of culture, institutions and economic development using the example of Indonesia. The success of economic catch-up development depends essentially on the interconnection between pre-existing informal constraints on the one hand and novel, imported institutions on the other. Hence culture, understood as the interplay between legal rules and non-legal constraints, has to be considered as an important determinant of economic development and growth. In order to adapt economic policies and thereby prevent institutional traps, which may otherwise hinder economic reforms, it is essential to understand culture and the ways in which different cultural factors support or constrain the functioning of formal institutional settings. Applying a cultural approach to economics in the case of Indonesia's economic development allows for the inclusion of complex cultural conditionality of economic behavior and puts special emphasis on the role of politicians as public and cultural entrepreneurs. Altogether, the example of Indonesia demonstrates once more the necessity to apply a cultural approach to the study of catch-up development in a globalized world.
Spranz R., Lenger A. and Goldschmidt N. (2012) The relation between institutional and cultural factors in economic development: the case of Indonesia. Journal of Institutional Economics 8(4): 459-488. 10.1017/S1744137412000124
@article{Spranz2012,
Title = {The relation between institutional and cultural factors in economic development: the case of Indonesia},
Author = {Spranz, Roger and Lenger, A and Goldschmidt, N},
Editor = {},
Journal = {Journal of Institutional Economics},
Year = {2012},
Pages = {459-488},
Volume = {8},
Doi = {10.1017/S1744137412000124},
Abstract = {This paper analyzes the relation of culture, institutions and economic development using the example of Indonesia. The success of economic catch-up development depends essentially on the interconnection between pre-existing informal constraints on the one hand and novel, imported institutions on the other. Hence culture, understood as the interplay between legal rules and non-legal constraints, has to be considered as an important determinant of economic development and growth. In order to adapt economic policies and thereby prevent institutional traps, which may otherwise hinder economic reforms, it is essential to understand culture and the ways in which different cultural factors support or constrain the functioning of formal institutional settings. Applying a cultural approach to economics in the case of Indonesia's economic development allows for the inclusion of complex cultural conditionality of economic behavior and puts special emphasis on the role of politicians as public and cultural entrepreneurs. Altogether, the example of Indonesia demonstrates once more the necessity to apply a cultural approach to the study of catch-up development in a globalized world.},
}
TY - JOUR
AU - Spranz, Roger
AU - Lenger, A
AU - Goldschmidt, N
TI - The relation between institutional and cultural factors in economic development: the case of Indonesia
T2 - Journal of Institutional Economics
PY - 2012
SP - 459-488
VL - 8
DO - 10.1017/S1744137412000124
AB - This paper analyzes the relation of culture, institutions and economic development using the example of Indonesia. The success of economic catch-up development depends essentially on the interconnection between pre-existing informal constraints on the one hand and novel, imported institutions on the other. Hence culture, understood as the interplay between legal rules and non-legal constraints, has to be considered as an important determinant of economic development and growth. In order to adapt economic policies and thereby prevent institutional traps, which may otherwise hinder economic reforms, it is essential to understand culture and the ways in which different cultural factors support or constrain the functioning of formal institutional settings. Applying a cultural approach to economics in the case of Indonesia's economic development allows for the inclusion of complex cultural conditionality of economic behavior and puts special emphasis on the role of politicians as public and cultural entrepreneurs. Altogether, the example of Indonesia demonstrates once more the necessity to apply a cultural approach to the study of catch-up development in a globalized world.
ER -
