The Effect of Culture on EconomicsMike Rappaport

An extremely interesting short essay discussing this very important subject.  Really, a must read.  There will be others commenting on the essay, which I am looking forward to. 

Here is one interesting implication.  Harrison writes:

All five Nordic countries Finland, Sweden, Norway, Denmark, andIceland have a Lutheran background, even though few today arechurchgoers. Lutheranism is the source of much of the Nordic valuesystem that has produced high educational levels, extensive welfareprograms, and high quality entrepreneurship symbolized by Finland’sNokia and Sweden’s Volvo, Saab, and Ikea.

Perhaps this explains why these Nordic countries can combine economic growth and high social spending.  Their culture allows them to spend without suffering the significant effects that other countries would.  Thus, their example does not suggest that other countries, especially developing countries, could do the same thing.  Moreover, I wonder how much growth there would be in these countries if they had lower social spending.  Perhaps quite a bit more.