Culture, democracy, and market reforms: Evidence from transition countries

Transition countries differed widely in the extent to which they implemented market reforms. This paper empirically investigates the role of culture as a potential determinant of market reform adoption among the post-socialist economies of Eastern Europe and Central Asia. I examine an unbalanced panel of up to 21 transition countries over the period 1989-2001 and estimate the relationship between different cultural typologies and the adoption of liberalizing reforms. I report that a sense of individualism and intolerance for unequal dispersion of power within societies are robustly associated with greater market reform efforts. Only limited evidence exists for the influence of other cultural attitudes.