Culture and institutions

A growing body of empirical work measuring different types of cultural traits has shown that culture matters for a variety of economic outcomes. This paper focuses on one specific aspect of the relevance of culture: its relationship to institutions. We review work with a theoretical, empirical, and historical bent to assess the presence of a two-way causal effect between culture and institutions. The first part of the paper provides the main definitions and discusses the difficulties associated with the quantitative analysis of this effect. It also features a map of cultural traits used in economics and of their correlations.