**Author details**

*Perspectives on Economic Development - Public Policy, Culture, and Economic Development*

**6. Conclusions**

results.

reforms.

much lower.

development are even more crucial.

ment depending on the cultural background.

is that the changes of the cultural background can only be slow-moving [55–57], even though there are behaviors that change even in a short-term horizon.

The forces deployed in the society either encourage the prevalence of features that promote a progrowth model or lead to a variety of problematic growth models, or to a mixture of progrowth and antigrowth characteristics with ambiguous

The transformation of a stagnated model to a progrowth one is not an easy task, focusing mainly on the coevolution requirements. Since the coevolution requirements cannot be met, there is a possibility that a perpetual stagnated prototype may become stronger. More specifically, the stagnated growth prototype may be transformed into a progrowth optimal prototype through suitable structural reforms on institutional and cultural background. However, the coevolution process taking place between institutions and culture may interrupt this process, having as a result a series of failing attempts to implement a modernized progrowth framework of institution settings and cultural behaviors leading to the salvation of the existing stagnated growth prototype, despite the probable design of ambitious structural

The analysis of the chapter reveals the complementary relationship between the institutional and cultural background in terms of their role in economic development and growth, as when both sizes are strong it leads to higher levels of GDP per capita. When either or both of them are at a weak level, economic development is

Thus, the existence of economic freedom is an important condition for economies to thrive. However, when these conditions are accompanied by social behaviors that promote economic development and growth and relate to individuals' trust and

For instance, the presence of institutional structures that adequately manage property rights and contracts between economic actors has a positive impact on the level of economic development. But when this is accompanied by a high level of generalized trust and respect for other members of the society, the positive impact on economic development multiplies as the performance of the already satisfying cultural background improves. In addition, when there is an institutional background in which government spending, taxation, and the size of state-controlled enterprises are such that state decisions do not replace private choices, financial freedom is increased with significant benefits for economic performance. But when this institutional framework characterizes societies that are independent of choices, the benefits of the institutional and cultural background to the level of economic

By presenting in a different way the conclusion about the complementarity of the two sizes, the results of the analysis lead to the fact that even if the institutional background is strong, it depends on whether the cultural background is weak (quadrant A in the analysis) or strong (quadrant B in the analysis) to determine whether or not an economy achieves satisfactory economic development. Thus, the same institutional background may have a different impact on economic develop-

This relationship gives a good explanation of why economic policies, such as structural reforms, are effective in some countries and noneffective in others. The transformation of a stagnated growth prototype to a progrowth one is not an easy task, focusing on the coevolution requirements. Since the coevolution requirements

independence, the highest possible level of economic growth is achieved.

**14**

Kyriaki I. Kafka, Pantelis C. Kostis and Panagiotis E. Petrakis\* Department of Economics, National and Kapodistrian University of Athens, Athens, Greece

\*Address all correspondence to: ppetrak@econ.uoa.gr

© 2020 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
