However, does economic growth affect poverty reduction equally in different countries? Contrary to conventional wisdom, we don’t think so. And here’s why.
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Economists have been increasingly looking at culture to explain the divergent economic fortunes of nations. Does culture matter for development? If it does, what kind of culture? In a recent paper we argue that differences in economic development across countries can be explained by a culture of entrepreneurship, that there is a role for government policy to shift culture towards risk-taking and innovation but that, ultimately, culture is subordinate to institutions.