Cultural Corridors: An Analysis of Persistence in Impacts on Local Development — A Neo-Weberian Perspective on South-East Europe

Peter Nijkamp,Annie Tubadji

doi:10.1080/00213624.2018.1430948

Abstract

:Culture matters for economic development. This postulate has been a main conceptual concern for “old” institutional economics (OIE) and has lately also been tested through neoclassically inspired econometric techniques. This conceptual foundation has been confirmed in several quantitative studies on developed countries, in particular cases from the USA, Germany, and Italy. In less developed regions with a wealth of cultural heritage, particularly in South-East Europe, this postulate is still an underexplored issue from the perspective of advanced econometric approaches. Our goal is to examine the impact of the so-called South-East European cultural corridors on welfare — and especially on total employment — at the local or regional level. Accounting for gross value added and sectoral specialization, we examine the effect of such corridors by considering the distance to a cultural corridor: namely, the East Trans-Balkan Road (crossing Romania, Bulgaria, and Greece) as an explanatory factor for regional development, particularly employment. Using the European University Institute (EUI) European Regional Dataset (ERD), as well as the geo-data from the Cultural Corridors of the South-East Europe website, we estimate a regression model using a 2SLS instrumental variable (IV) approach, with a pooled dataset at the NUTS 3 level (Eurostat) from 1980 to 2011. We then triangulate the results by using the distance to the cultural corridor concerned as a treatment effect in a propensity-score-matching and difference-in-differences exploratory analysis. The findings confirm the importance of distance to the cultural corridor under investigation as a strong predictor for local socio-economic development. The results further suggest that the slow evolution of culture over time is likely to lead to the gradual emergence of new geographical cultural centers and a new cultural path-dependence build-up of persistence chains.

Highlights

‘Culture matters’ is a claim having a long conceptual tradition in the original or “old” institutional economics (OIE) developed by Veblen (1915), Commons (1931), Ayres (1961), and Hamilton (1991)
In the present contribution we argue that a bridge between OIE and neoclassical empirical methods can be built and is needed, because cultural impact plays an important role in socio-economic development
We need to extract the cultural bias from the regressor – the sectoral specialisation – by finding an instrumental variable (IV) related to this regressor, but not with the error term of the regression itself

Summary

Introduction

‘Culture matters’ is a claim having a long conceptual tradition in the original or “old” institutional economics (OIE) developed by Veblen (1915), Commons (1931), Ayres (1961), and Hamilton (1991). ‘Persistent effect’ refers here to an exogenously determined effect that, once occurring, acts like an initial condition and becomes a characteristic that continues to exist beyond the process that generated it In a sense, this assumes that culture, especially from a past period, is an exogenous factor for current socio-economic development. An intermediate approach can be found in the Inglehart (1977), Fukuyama (1992) and Hofstede (2001) sociology of culture, in which culture is interpreted as a locally-specific ‘programming of the mind’, which may or may not allow for certain developments under the same socio-economic conditions This is the path-dependence school, which views culture as a ‘bandwagon’ which attracts more or less followers of a particular pattern based on the overall mass of participants ( known as the ‘network effect’). A historical event – or the distance to a historically significant location – is interpreted as a factor with a direct economic meaning

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