You can't beat alumni magazines for giving you a taste of information and articles that the popular business press doesn't have space for. This weekend I read an interesting study in my NYU/Stern magazine, called "Comparative Capitalism" by Augustin Landier, David Thesmar, and Mathias Thoenig.
Their study presents an analysis of various developed nations' citizen attitudes on some of the key tenants of capitalism and free markets. Key insights of the study focused on how historic government structures seem to be correlated to today's opinion on free markets. For example:
"French legal origin was strongly related to competition aversion, and British common law was related to a strong preference for owner control. These findings suggest that long-run institutional determinants rooted in the history and culture of a country dominate more recent developments in the organization of its economy."
There are several interesting implications of this analysis. It helps us understand why some countries' governments and citizens react differently to a move to global free markets. Cultural beliefs are difficult to modify, even after hundreds of years.
But the article failed to make an analysis of historic GDP trends. I decided to compare the country rankings for these two questions, alongside the ranking of GDP growth over the past ten years. The results are in the Excel chart above.
Unfortunately, I've lost my statistics brain and number crunching software to be able to gauge the significance and correlation here. However some general trends come out. The nations that embrace pro-market attitudes tend to fall higher on the GDP ranking (U.S. Canada, Australia). Meanwhile, those that look down on competition tend to be looking at lower GDP increases (Japan, Germany, Denmark). There are a few surprises and inconsistencies as well. For example, France is last on a combined attitude ranking, but fares mid-level in GDP growth; while Switzerland is high on competitive attitudes but low on GDP.
If I was a business professor, I would spend a good deal of time digging further on this link between competitive attitudes and GDP. It could be a rich area of study. But for this blogger, Dad and full-time business guy, I'll just stop now and claim enough of a link to declare yet more empirical evidence of The Challenge Dividend.
Comments