Finished projects

Conditions for Growth – Institutions and Social Attitudes in a Global Economy

The project has three overarching purposes. One is to investigate how globalization affects growth-related social attitudes like trust, tolerance and religion. A second purpose is to look at how formal institutions, i.e., laws and rules, affect important economic outcomes, such as economic growth, entrepreneurship, innovations, the size of government and corruption. It is also studied how globalization affects the emergence of institutions of this kind. The third purpose is to carry out new research concerning how social and cultural factors, like trust, tolerance and religion, affect economic outcomes like entrepreneurship and growth.

Project director: Niclas Berggren

Project participants: Niclas Berggren, Andreas Bergh and Therese Nilsson

Sponsor: The Swedish Research Council (2014–2017)

A few weeks before Ikea were to open its first store in Moscow in 2000 the company was asked to pay a bribe. Without this payment all electricity to the store would be closed off. Ikea opted not to pay the bribe and instead rented diesel generators, large enough to supply the whole shopping center with electricity. However, continued problems with corruption later made Ikea slow down its expansion in Russia.

The story of Ikea in Russia illustrates many of the questions that are addressed in this project. We already know, from previous research, that globalization has the potential to benefit economic growth and consumers, employers and capital owners – but it is not self-evident that such gains always appear. By globalization we mean the process that makes economies and societies more closely integrated, in spite of geographical distance. Globalization entails increased mobility for people, goods, capital and ideas.

The economy does not function in a vacuum. People’s behavior is affected by laws and rules, but also by social norms and attitudes. The consequences of globalization for growth will therefore vary depending with the context. One of the goals of the project is to study how globalization influences growth-related social attitudes such as trust, tolerance and religion. For example, it seems obvious that the high Russian corruption was a hindrance for Ikea. But how did Ikea’s presence and action affect people’s ideas, knowledge and social attitudes? What does this in turn imply for how globalization affects wealth-creating factors like entrepreneurship and investment?

A second purpose is to see how formal institutions, i.e. laws and rules, affect important economic outcomes, such as economic growth, entrepreneurship, innovations, the size of government and corruption. We also study how globalization influences the emergence of institutions of this kind.

The third purpose is to initiate new research about how social and cultural factors relate to economic outcomes like entrepreneurship and growth. This is a potentially fruitful approach for a better understanding of the mechanisms that bind together people’s ways of regarding themselves and others with the way the economy functions.

In this project we carry out a number of statistical analyses which address the questions above quantitatively. Unlike most of the existing research we try to use individual-level data and data over time. This improves chances for causal identification.

A lot in this project is of political relevance. For example, this is so for our studies of what affects tolerance towards religious minorities, homosexuals and people born in a foreign country. Are there elements of globalization that stimulate or work against tolerance? What (other) laws and rules affect the degree of tolerance in society? Does GDP per capita grow faster in tolerant societies?

Another relevant question concerns the effects of the welfare state on various social attitudes. On this previous studies are not in agreement: Some suggest that the welfare state creates social trust, while other results indicate that the welfare state does not affect social trust in general or that it even reduces trust. In this area there is a need for further research to resolve these disputes.

Finally, the project has parts that matter for foreign-aid policy and for development issues in general. The consequences of globalization in poor countries is a controversial topic. Clearly globalization entails large social effects in many poor countries, many of which have not so far been studied scientifically. In this project we, e.g., look at how globalization affects norms regarding the use of contraceptives. Earlier research indicates that globalization plays a large role in influencing not least the knowledge and choice options of women.

International cooperation

Visiting researchers

Collaborating with others is essential for IFN as a research institute. Our researchers co-author articles with colleagues from other institutes, and many also teach at various universities and colleges.

As part of our extensive program of guest researchers, leading international researchers visit the institute. The visitors present and pursue their research as well as interact and cooperate with researchers at IFN.

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