Question

. Explain (i.e. compare and contrast) cultural and institutional theories of development. Be as specific and detailed as possible.

Answer 1

In this paper, similarities and differences between the institutional theory of organization and organizational culture theory are analysed, and how these theories complement each other is highlighted. This study posits that both the institutional and cultural theories of organizations have the same research subject and that they approach it from the same research paradigm. The level of analysis distinguishes the two, and therefore, an interaction between the institutional and cultural theories of organizations is useful. Organizational culture theory supports the institutional theory in explaining the underlying factors and the forms of the implementation of institutional pattern in organizations. The institutional theory of organizations supports the organizational culture theory to expand its findings regarding the sources of organizational culture.Institutional theory focuses on the roles of social, political and economic systems in which companies operate and gain their legitimacy. As explained by Scott, institutions provide for the rules of the game and define the available ways to operate by discouraging, constraining or encouraging given behavioral patterns. They have an impact on the decision-making process in giving indications of what would be acceptable or not, and in determining the individual socialization of norms and behaviors in a given society. Scott describes the three pillars on which societies are built: the regulative, the normative and the cognitive. The regulative pillar is formal and legally codified, while the normative one includes non-codified attitudes present in societies. When normative expectations and attitudes are largely diffused in society, they are gradually internalized by individuals and become accepted as the norms to which everybody is encouraged to conform. Institutions give stability and predictability to social behavior. Pressures and expectations can be exerted by institutional constituents, such as the state, professions, interest groups, public opinion and family. The underlying logic of the regulative pillar is conformity to the rules and laws, whereas that of the normative pillar relates to what is considered appropriate. But responses to institutional pressures and expectations may range from passive conformity to active resistance, depending on the nature and context of the pressures.
In general terms, it has been said that Asian cultural traits and standard values, including in the selected countries, are not propitious to the development of entrepreneurial spirit. Confucian values, linked for instance to respect for hierarchy, family responsibility and social risk associated with failure, present in Japan, Korea and Vietnam could inhibit entrepreneurs in taking risk and engaging in maverick behavior. The traditionally low social status of the merchant class in the Confucian world further complicates the entrepreneur’s task. A similar mindset is said to be dominant in Malaysia in the Malay population, where respect for authority tends to discourage challenging or bypassing the hierarchy. Up until recently, for a mix of religious, philosophical and ideological reasons,16 this strong sense of social hierarchy permeating human relationships made entrepreneurial endeavors a relatively unattractive professional choice, especially for younger members of the establishment in the whole East and South-East Asian region.The overall purpose of this undertaking, you will remember, was to search for the source of the uncomfortable silence I experienced when trying to communicate with a professor of neoclassical development economics about the idea of culture. I suggested that this silence was but a singular example of the many such silences that pervade, and impede, development thinking in general. Proposing that this silence had something to do with the evolution of disciplinary thinking regarding development and its relation to culture, I set out to explore this thought as it evolved in from the late eighteenth to early twentieth centuries. The story began with classical political economy and its holistic treatment of questions regarding wealth creation in national economies. We then saw what I suggested to be a splitting of this great discipline into three schools—neoclassical economics, critical political economy, and sociology. This taxonomic classification will be retained in the work of the current chapter with the exception of the last school of thought in the list.Recent work suggests achievement motivation and values embodied in civic culture promote economic growth while postmaterialist values inhibit growth. I provisionally propose that a distinct cluster of values and attitudes, particularly those that emphasize collective organization and societal consensus and concertation, combines with the institutions and practices of communitarian polities to foster economic growth. After considering the theoretical and methodological sources of diverse findings on culture presented by Granato, Inglehart, and Leblang (GIL), and Jackman and Miller (JM), I hypothesize that communitarian polities, both confucian statist and social corporatist, should have higher economic growth rates than noncommunitarian polities. To reflect on the often divergent conclusions on the growth effects of culture presented by GIL and JM, I consider the different theoretical and empirical models utilized by these authors and related methodological disparities. I then utilize Ordinary Least Squares and robust regression techniques to offer a preliminary analysis of the growth effects of communitarian polities in the context of the basic endogenous growth model. Diverse and divergent findings offered by GIL and JM stem from different theoretical emphases, distinct empirical modeling strategies, and different sample composition and time frames. Statistical analyses suggest that a parsimonious model highlighting the significance of convergence in growth rates, human capital investment, and communitarian polities is empirically more powerful than alternatives. It explains a full 84% of the cross-national variation in 1960-89 growth rates in 25 countries.