The Cultural Definiteness of Economic Efficiency and Competitiveness

Abstract

The key objective of this study is to try to find tangible relationships among economic performance, competitiveness and the so called “soft factors”, like the different elements of culture. Economists, especially those who follow the mainstream line believe that human beings and businesses make objective and rational decisions about economic issues. Therefore, economic performance is only influenced by objective, measurable facts, and therefore the causes and effects can be mathematically modelled and forecasted. Macroeconomic changes in today’s world, which are not at all easily predictable, do not verify this argument. It has been proved by many researchers—among them Nobel-prize winners—that decisions of people and businesses are also influenced by subjective elements, including soft factors, like cultural values and beliefs. This paper presents some of the most interesting arguments in the field, and suggests a research approach which can also consider some—from an economic point of view especially important—soft cultural factors which may influence economic performance and competitiveness. This way it is also possible to increase the range of hard and soft environmental factors which may have impact on economic performance and competitiveness. The importance of the subject can be proved by the fact that governance capabilities could also be improved by considering other factors than the typical hard, macro indicators while determining economic policies.