The Effect of Country Economic Institutions and Cultural Values on Government Policy and Societal Compliance in the Covid-19 Pandemic

Abstract

Using data from 88 countries, we test hypotheses linking a country’s economic freedom and cultural values with the propensity and timing of decisions to impose stringent policies to combat the spread of Covid-19, as well as society’s compliance with those restrictive measures. Our analysis supports hypotheses that a country’s economic freedom and cultural dimensions of individualism and masculinity predict early implementation of stringent policies. After accounting for endogeneity, we find that individualism also helps explain residents’ compliance with stringent measures. These findings illustrate how institutions and cultural values influence government policies and societal compliance.