Economic Growth and Development

and acceptability of employing professional experts rather than family
members in family firms; attitudes to social changes generated by technologi-
cal change, innovation and entrepreneurship; the importance of literacy and
education; and non-economic influences on fertility.
Culture can also affect economic growth through its influence on whether
countries are open to ideas and innovation (see Chapter 13).
In their reluctance to engage with culture, some economists dismiss it with
the assumption that all consumers and producers behave in similar ‘rational’
ways to maximize wages/profits. Others have nervously stepped back feeling
that culture is too big and the links through which it can influence economic
outcomes so numerous that it is impossible to design any sort of testable
economic theories. Robert Barro’s paper (1991) did not include any measure
of culture. Culture is often simply derived as the residual in economic analysis:
rather than being theorized from the outset, it is a measure of our ignorance.
Once all the possible economic explanations for a given phenomenon have
been accounted for, economists allocate what remains to ‘culture’. A good
example is the difference between Hindu and Muslim fertility in India, where
demographic data suggest Muslim fertility is higher than Hindu. Some Hindus
allege that this is evidence of a Muslim plot to take over India by becoming the
majority population – a plot that is supposed to work through widespread
polygamy and the rejection of contraception. The reality is less dramatic. The
share of Muslims in the Indian population increased from 10.5 per cent in 1951
to 12.5 per cent in 1991. There is no difference in the occurrence of polygamy

Culture 251

Figure 12.1 Culture as a deeper determinant of economic growth

Figure 12.1

GDP growth

See Chapter 4

See Chapter 3 See Chapter 5

Culture

Productivity

Investment (TFP)

Labour supply/

population