How culture affects economic development

The rapid pace of economic development in some countries in Asia over the past few decades has awed the world.

Since the 1980's, economies of South Korea, Taiwan, China and India have experienced very rapid growth rates.

Why is there relatively large differences in economic growth between Asian countries ? Why is it that China and India have surged ahead economically during this time, whilst by comparison Philippines has lagged in relative terms?

There have been several theories posed, but culture remains as one dominant factor. Research have discovered that the culture cultivated by a nation’s people tremendously influence business environment and sets the direction of the economy.

Nurtured values such as career over family, corporate loyalty, respect for elders can foster a work ethic that favors heavily for or against business.

The Philippines is largely Catholic, forming the base of norms of social morality, influencing personal, familial, and institutional relationships, and the system of governance. Religion provides the overall terms of reference for social morality and order in the country.

Religious influences include reverence for the education and social harmony, respect for elders and emphasis on the importance of personal relationships and the family. This means that most Filipinos, if given the choice, favor good relationships over career advancement. Most consider a job merely as a means to enable them to feed and keep their family happy.

Is this bad? That depends on how you look at it.

According to a psychologist, the Filipino’s social savvy and family security have given him a temperament that works as an armor against the negative effects of stress and everyday disappointments.

That is why you don’t hear of Filipino serial killers or suicidal maniacs (they are likely to commit suicide when spurned by a love one). That is why, from my point of you, Filipinos are effective in the services industry that values human relationships.

Although the typical Filipino doesn’t take himself seriously even if the joke is on him, there are matters which he gives much importance.

Filipino culture give much weight to the value of education, and parents will often sacrifice much in order to provide their children with as good an education as possible. Both within the family and without, there is enormous pressure to 'achieve' in the realm of education.

Note that education is a crucial factor in Knowledge Process Outsourcing, a fast rising industry sector. Knowing this, economic success for the Philippines would just be a matter of harnessing existing cultural advantages.

There is a perception that the economic transformations currently underway in Asia may be replicating western models. Still, as may be gleaned from past experience, economic activity does not take place in a social or cultural vacuum.