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Wednesday, April 20, 2011

Trust and Economic Development

There is a study published today in the NY Times that I think tends to confirm the idea that it is the national "culture" that drives development.  Trust is number 6 on my list of factors that influence development.  A study found that the level of trust between citizens tends to correlate well with high per capital income.  You can read it here:
   http://economix.blogs.nytimes.com/2011/04/18/trust-me-were-rich/

Of course, the argument could be that the wealth creates the trust - but I really think it is the other way around.  The trust relationship makes the economic one work.  When trust is absent, things simply do not work.  When the courts do not defend ownership, when business agreements are not upheld, when profits cannot readily be counted on - people do not undertake risky development activities.

If you have not read my prior pieces on "Culture and Development", they are here in this blog.  See these:
http://carlscheider.blogspot.com/2011/01/culture-and-developing-nations.html
http://carlscheider.blogspot.com/2011/02/culture-and-development-bits-and-pieces.html

The study also evaluated the corruption index, and the confidence in national institutions, and those correlate well with wealth.  Pro-social behavior also correlates well with wealth.  But, interestingly, the relationship between income inequality and anti-social behavior is very weak.  Also interestingly, Greece has a relatively high pro-social behavior, given its wealth position.  There must be some history there in that realm.
See:  http://www.oecd.org/document/24/0,3746,en_2649_37419_2671576_1_1_1_37419,00.html#data
Data is downloadable as an XML/ Excel file.

Why "Culture"
I also got some commentary on those posts that is worth addressing.  A friend suggested that we should use the term "world view" instead of "culture" to identify the different mental framework of people that influences how they see things, and how they operate in the ecnomic realm.  But, most of the literature I have been reading talks about culture - world view is a small part of that.  This article, the one on trust, exemplifies that.  One's world view of how things work might or might not include one's trust of others.  Culture can clearly encompass that, and many other traits that seem to impact on development.  It is not that ALL components of culture have a direct influence on development - but clearly SOME do.  For example, I highly doubt that artistic flavor or taste has much to do with it.  In some countries I have visited, the walls are bare and plain, compared to those found in Northern Europe and the US.  I don't think that relates to economic development.  Trust clearly does, as does "who is in charge", "the value of hard work", etc.  Music and poetry and dance - probably not so much.

The more I learn, the more amazed I am at just how much we actually know about stuff, but how little of that knowledge is generally shared, or had any influence on our political behaviors!

What do you think?

Tuesday, April 12, 2011

Finland's low pressure, high performance schools

I like this recent article in Time on Finnish schools.
  http://www.time.com/time/magazine/article/0,9171,2062419,00.html 
The gist of it is that the Finnish schools are very non competitive, very relaxed about testing, homework, etc., and yet turn out superior results.  They do very little testing and measuring results.
In the latest PISA survey, in 2009, Finland placed second in science literacy, third in mathematics and second in reading. The U.S. came in 15th in reading, close to the OECD average, which is where most of the U.S.'s results fell.
There's less homework too.
"An hour a day is good enough to be a successful student," says Katja Tuori, who is in charge of student counseling at Kallahti Comprehensive, which educates kids up to age 16. "These kids have a life.
The key ingredient appears to be treating the teachers as true professionals.  Every teacher must complete five years of training - our Master's degree.  They are highly selective on who can get into the profession - only 10% of applicants are accepted.  The quality of the teachers seem to be the key to their success.  A teacher stays with students from first grade through sixth grade.  And once they are there, they leave them alone.
"You don't buy a dog and bark for it," says Dan MacIsaac, a specialist in physics-teacher education at the State University of New York at Buffalo who visited Finland for two months. "In the U.S., they treat teachers like pizza delivery boys and then do efficiency studies on how well they deliver the pizza."  
 But this approach may not work everywhere.  The Finnish non competitive culture is behind it - and it won't port well to some place where that doesn't fit.  Just another example of the tremendous influence of the local culture on the way we work.