Friday, October 14, 2011

Why do people in countries with strong social values tend to support free markets?

This question presupposes that people in countries with strong social values do actually tend to support free markets. Some evidence in support of this is provided in the table below.

The table has been constructed from information in the World Values Surveys conducted in 2005 to 2008. Countries are ranked by levels of inter-personal trust i.e. the percentage of people who are more inclined to agree with the proposition that ‘most people can be trusted, rather than that ‘you can’t be too careful’. Each entry in the table is presented against a green, yellow, orange or red background depending on how favourable it is to either the market economy or community values. Further information about the definition of the variables in the tables may be obtained from the last couple of posts (here and here).

Hint: If you click on the table you might still need a magnifying glass to read it!

The fact that there is more green and yellow at the top of the table and more red and orange at the bottom reflects a positive relationship between values supporting the market economy and community values. Why is this so? I suspect the answer has to do with the development of institutions that support both inter-personal trust and strong feelings of individual agency.

I will write more about this later (and possibly present some information from the table in a more readable form).

No comments: