**2. Economic culture and economic success**

The concept of economic culture is related to the concept of political culture which was consolidated by Almond and Verba [3] and others. Berger and Peter [4], in their book, focus on the theory of the economic culture of capitalism, exploring the social, political and cultural matrix, or context within which these particular economic processes work. In doing so, it does not presuppose a direct or indirect connection and does not presuppose that culture determines the economy or that economic factors determine culture. The concept of economic culture draws attention to the relationships that such an empirical study has to explore.

On the basis of the relevant economic knowledge, economic culture can be considered as a whole in the economy of the related knowledge, experience, perceptions, evaluations, norms, and styles of behavior of whole nations or certain groups of the population within a particular society [5], which affects the economically relevant decision-making and conduct of actors or groups of actors. Economic culture has constituent and regulatory elements [6]. Thus, the (often unconsciously) structure of economic perception of the world, as well as the values and norms that determine their motives and limitations of their behavior, is more accessible to everyday awareness [7]. According to Weiss's and Fershtman's economic culture, "it is by no means a static system of value fields that determine the maneuvering space of behavior and outline the directions of action that they make for meaningful" [8]. "Culture is therefore the one that directs the process of the evolution of a system" [9]. The orientation is carried out partially with the help of internationalization of value performances and, insofar as the direct guidance instruments are more abandoning, the "guiding function of cultural forms and value fields" is all the more important [5]. According to Jones "economic institutions do not exist in a vacuum but rather in a context of social and political structures, cultural patterns, and, indeed, structures of consciousness (values, ideas, belief systems). An economic culture then contains a number of elements linked together in an empirical totality. The question concerns the manner of linkage [10]. Boyd and Richerson perceive culture as "the transfer of knowledge, values and others to the behavior or behavior of relevant factors through teaching and imitation from one generation to the next" [11]. The Berger's concept of culture argues that "economic institutions do not exist in a vacuum but rather in a context of social and political structures, cultural patterns, and, indeed, structures of consciousness (values, ideas, belief systems). An economic culture then contains a number of elements linked together in an empirical totality. The question concerns the manner of linkage" [5]. Cultural factors have a holistic impact on the process of emergence and on the structure of flows and interconnection networks within a given formal framework and affect the recognition, guidance, and also the effectiveness of formal institutions. The conflicts between formal institutions that have emerged during the transition and between cultural factors that act as informal institutions form an essential part of the societal developmental dynamics [5].

#### **2.1 Economic culture as a factor of transition**

Economic institutions do not exist in a vacuum but in the context (matrix) of social and political structures, cultural patterns, and conscious structures (values, ideas, belief systems). Economic culture (in capitalism, in socialism, in Hinduism, or in any other society) contains a number of elements linked together. The question is in what way are they connected [4].

Transition to a modern market economy requires an integrated and wellrounded study of the specific features and factors of modern economic transformation. Undoubtedly, man is always the most important factor in the production and

**43**

*Namibia's Triple Challenge and Its Economic Development*

managerial skills, and their view of the economy [12].

development of the economy. An important historical role of a democratic society is to free creative human resources from social and economic barriers and to enable people to work for their own benefit and profit. Motivation and interests are of primary importance in the creation of a modern market economy. Subjective social factors are a useful aspect of economic culture. This includes the economic policy, the quality of management, and the productivity of each individual and determines the functioning of socioeconomic laws. Economic culture is constantly changing people in society who work according to their level of economic knowledge, their

In a democratic society, economic culture represents economic relations and creative resources for the development of the economic life of social bodies, specialists, and entrepreneurs. They are all coordinated as the overall economic activity of people, where work practice and economic behavior play an important role in socioeconomic development. Economic culture is linked to the development of society and is crucial in ensuring a satisfactory life for people and for the development of a new quality of social life. The company is unified with economic culture, which operates not only through economic integration but also through the economic policy of the state. Democracy needs an industrial force of high quality. By people seeking new ways of satisfying their needs, economic culture is an objective need for a democratic society and becomes a coincidence for the country's economic policy. Economic culture is changing with social development. Today, an economiccultural person must have economic knowledge, the ability to economize resources and draw attention to the quality and quantity of production, the ability to make decisions, and care for investment in time and resources. The main components of

Depending on these components, economic culture can be described as a way of creatively shaping the economic activity of people, based on deep economic and technological knowledge related to their problem and profession, sufficient scope of objective laws of socioeconomic development, and belief based on economic

Economic performance and the development of market economies are dependent on many factors. According to Elster et al. [13], Bulgaria and Slovakia faced major problems in adopting democratic institutions and market economy and understanding and internalizing their will in the 1990s, as their rapid and forced industrialization was in contrast to cultural and political modernization. Because of the traditional cultural implications of the Soviet type, the basic communist concepts and perceptions of the agrarian society (mostly under cover) can survive in the behavioral patterns, values, and worldviews of the communist era. The Soviet Communist regime served as a suitable host, which enabled the sustainability of many forms of traditional dominance of agrarian society also in industrial rather than simultaneously modernized society [14]. It is important that the legacy of the social and cultural capital of the past is able to adapt to the requirements of the present [13] in: [14]. It has become evident that economic-cultural factors also play an important role. There is a lot of evidence that this role has been

*DOI: http://dx.doi.org/10.5772/intechopen.88638*

the economic culture are [12]:

• Economic knowledge

activity and experience [12].

• Belief

• Talent

• Experience

#### *Namibia's Triple Challenge and Its Economic Development DOI: http://dx.doi.org/10.5772/intechopen.88638*

development of the economy. An important historical role of a democratic society is to free creative human resources from social and economic barriers and to enable people to work for their own benefit and profit. Motivation and interests are of primary importance in the creation of a modern market economy. Subjective social factors are a useful aspect of economic culture. This includes the economic policy, the quality of management, and the productivity of each individual and determines the functioning of socioeconomic laws. Economic culture is constantly changing people in society who work according to their level of economic knowledge, their managerial skills, and their view of the economy [12].

In a democratic society, economic culture represents economic relations and creative resources for the development of the economic life of social bodies, specialists, and entrepreneurs. They are all coordinated as the overall economic activity of people, where work practice and economic behavior play an important role in socioeconomic development. Economic culture is linked to the development of society and is crucial in ensuring a satisfactory life for people and for the development of a new quality of social life. The company is unified with economic culture, which operates not only through economic integration but also through the economic policy of the state. Democracy needs an industrial force of high quality. By people seeking new ways of satisfying their needs, economic culture is an objective need for a democratic society and becomes a coincidence for the country's economic policy. Economic culture is changing with social development. Today, an economiccultural person must have economic knowledge, the ability to economize resources and draw attention to the quality and quantity of production, the ability to make decisions, and care for investment in time and resources. The main components of the economic culture are [12]:


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

tion to the relationships that such an empirical study has to explore.

an essential part of the societal developmental dynamics [5].

Economic institutions do not exist in a vacuum but in the context (matrix) of social and political structures, cultural patterns, and conscious structures (values, ideas, belief systems). Economic culture (in capitalism, in socialism, in Hinduism, or in any other society) contains a number of elements linked together. The ques-

Transition to a modern market economy requires an integrated and wellrounded study of the specific features and factors of modern economic transformation. Undoubtedly, man is always the most important factor in the production and

**2.1 Economic culture as a factor of transition**

tion is in what way are they connected [4].

The concept of economic culture is related to the concept of political culture which was consolidated by Almond and Verba [3] and others. Berger and Peter [4], in their book, focus on the theory of the economic culture of capitalism, exploring the social, political and cultural matrix, or context within which these particular economic processes work. In doing so, it does not presuppose a direct or indirect connection and does not presuppose that culture determines the economy or that economic factors determine culture. The concept of economic culture draws atten-

On the basis of the relevant economic knowledge, economic culture can be considered as a whole in the economy of the related knowledge, experience, perceptions, evaluations, norms, and styles of behavior of whole nations or certain groups of the population within a particular society [5], which affects the economically relevant decision-making and conduct of actors or groups of actors. Economic culture has constituent and regulatory elements [6]. Thus, the (often unconsciously) structure of economic perception of the world, as well as the values and norms that determine their motives and limitations of their behavior, is more accessible to everyday awareness [7]. According to Weiss's and Fershtman's economic culture, "it is by no means a static system of value fields that determine the maneuvering space of behavior and outline the directions of action that they make for meaningful" [8]. "Culture is therefore the one that directs the process of the evolution of a system" [9]. The orientation is carried out partially with the help of internationalization of value performances and, insofar as the direct guidance instruments are more abandoning, the "guiding function of cultural forms and value fields" is all the more important [5]. According to Jones "economic institutions do not exist in a vacuum but rather in a context of social and political structures, cultural patterns, and, indeed, structures of consciousness (values, ideas, belief systems). An economic culture then contains a number of elements linked together in an empirical totality. The question concerns the manner of linkage [10]. Boyd and Richerson perceive culture as "the transfer of knowledge, values and others to the behavior or behavior of relevant factors through teaching and imitation from one generation to the next" [11]. The Berger's concept of culture argues that "economic institutions do not exist in a vacuum but rather in a context of social and political structures, cultural patterns, and, indeed, structures of consciousness (values, ideas, belief systems). An economic culture then contains a number of elements linked together in an empirical totality. The question concerns the manner of linkage" [5]. Cultural factors have a holistic impact on the process of emergence and on the structure of flows and interconnection networks within a given formal framework and affect the recognition, guidance, and also the effectiveness of formal institutions. The conflicts between formal institutions that have emerged during the transition and between cultural factors that act as informal institutions form

**2. Economic culture and economic success**

**42**


Depending on these components, economic culture can be described as a way of creatively shaping the economic activity of people, based on deep economic and technological knowledge related to their problem and profession, sufficient scope of objective laws of socioeconomic development, and belief based on economic activity and experience [12].

Economic performance and the development of market economies are dependent on many factors. According to Elster et al. [13], Bulgaria and Slovakia faced major problems in adopting democratic institutions and market economy and understanding and internalizing their will in the 1990s, as their rapid and forced industrialization was in contrast to cultural and political modernization. Because of the traditional cultural implications of the Soviet type, the basic communist concepts and perceptions of the agrarian society (mostly under cover) can survive in the behavioral patterns, values, and worldviews of the communist era. The Soviet Communist regime served as a suitable host, which enabled the sustainability of many forms of traditional dominance of agrarian society also in industrial rather than simultaneously modernized society [14]. It is important that the legacy of the social and cultural capital of the past is able to adapt to the requirements of the present [13] in: [14]. It has become evident that economic-cultural factors also play an important role. There is a lot of evidence that this role has been

under-conceptualized and analytically-experimentally underexploited. The project "Researching Transition Economic and Culturally" is based on four fundamental hypotheses [5]:


In developing the appropriate conceptuality, it is possible to rely on an increasingly detailed conceptual apparatus, which is the result of an international cultural-oriented economic research. The reasons for the breakthrough of economic cognitive research are mutually accelerating factors of real change (Asian tigers, the collapse of global political blocs that hitherto covered cultural differences, different waves of transition) and the development of theory (the growth of the influence of the institutional economy, the evolutionary economy and economic sociology).

#### **2.2 Economic theory: culture and economic success**

Culture is a dynamic category; it changes over time. Changes are positions, values, norms, principles and customs, ideology, beliefs, behavior, etc. All of this is also linked to social structures, for example, in the economic system. Culture with its elements is the basis for the design and functioning of a social order and hence of economic regulation. It is understandable that social changes are changing with the changes in culture. On the other hand, we can expect that the change in economic regulation will affect the change of culture.

Economic activity of people is thus certainly among those that need to be judged from the point of view of good or bad. In the economy, people enter into urgent interrelationships, within which the basic existential issues are addressed, both at the individual and family level and at the level of the broader society as a whole. The socioeconomic order can only be effective if at the same time as the material goods increase, it also ensures the life of a human being to as many people as possible. In ethical issues in the economy, it is primarily because in material matters we are always looking for humanity [15].

The concept of culture is very wide, as it covers every part of personal life and has a direct impact on the patterns of life. Culture is a learned way of life within a given society. In essence, culture is a set of values and patterns of learned behaviors that are shaped as a result of living within a particular society.

This is enabled by the following processes:

• Cultural heritage as a way of transferring cultural values and norms from generation to generation (reproduction of cultural patterns)

**45**

*Namibia's Triple Challenge and Its Economic Development*

Culture does not stand still but gradually changes.

• Upgrading culture based on the internal potential of cultural groups

reproduction and a certain pattern of behavior of economic operators [16].

• Borrowing from other cultures as a way of assuming certain elements of other

In the broader sense, the economic system is defined as a set of mechanisms and institutions, laws, rules, traditions, and values that form a certain pattern of decision-making and the realization of economic decisions in the process of social

Throughout history, each country has created an indicative concept of culture that has its own specific characteristics. In connection with these cultural characteristics, each country has also developed a specific economic arrangement. Therefore, we can not claim that the economic system is identical in all countries. Of course, this can not be true, as economic potentials and culture, as an important element of economic regulation, are different in different countries. This intertwining of economy and culture was largely neglected in older economic theories. Recent economic theorists, however, are trying to capture the cultural aspect of the economy in their theories. An indirect link between culture and economy is possible through the role of the state as an institution and instance. In a dynamic market system with incomplete and diffuse information, culture is always the basis for competitive advantages in

North [17] states that the rules of the game in society are—or more formal—the constraints that people have built to create interactions. Consequently, they structure the incentives in political, social, or economic exchanges. Institutional changes shape a way of social development and are crucial to understanding historical change. Institutions can not be seen, felt, touched, or measured—they are constructs of the human mind. However, neoclassical economists recognize their existence and are usually used (implicitly or explicitly) in their models as parameters [17]. In his work of the institution, institutional changes, and economic success, North [17] laid the foundations for the analysis of institutional changes on economic performance. Keith Hudson [18], in his article in *The Economist*, asks what is crucial for the development—geography, institution, or politics. For many years, economists have emphasized the importance of good economic policy, and lately more emphasis is placed on long-stay institutions—political stability, property rights, the legal system, patterns of land ownership, etc. Other economists, on the contrary, emphasize geography, especially climate diseases, usability of certain technologies, agricultural opportunities, and access to the sea (influencing the extent of international integration). These explanatory factors do not necessarily have to be mutually exclusive1

Easterley and Levine [19] tested the importance of these groups of factors on a sample of 72 countries. The results of the survey are very impressive, as they have shown that institutional factors have a key effect on economic performance, while

Conceptual insights from contemporary social sciences show that the modern world is increasingly aware of the cultural condition of economic decisions. The decision-makers are not only economic but also cultural-national. The awareness of these complex relationships has not yet been sufficiently defined and researched. The Hofstede's six dimension model, where people's behavior conditions their values, is the cornerstone for the empirical model. In any case, we are aware that such an operational model has its own shortcomings, as are all mechanical methods [20].

<sup>1</sup> Rich economies usually combine appropriate policies, sound and stable institutions, and favorable geog-

.

*DOI: http://dx.doi.org/10.5772/intechopen.88638*

cultures

the realization of transactions.

other factors are almost non-negligible.

raphy. Many poor countries are poorly endowed with all three factors.

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

hypotheses [5]:

accelerating.

under-conceptualized and analytically-experimentally underexploited. The project "Researching Transition Economic and Culturally" is based on four fundamental

1.Success of economic transition in terms of a stable and economically viable change in the system depends on supporting economic and cultural factors.

2.Supportive economic-cultural factors occur in different transition countries or groups of countries of varying degrees. In some countries, the prevailing economic and cultural environment for transition is more aggressive than

3.Further progress of transition to less successful countries depends on the extent to which the obvious conflicts between the dominant elements of the traditional economic culture and the democratic and market economy mecha-

4.Economic culture is a concept that should be taken into account both in the analysis of global societies and in the research of individual groups of actors.

In developing the appropriate conceptuality, it is possible to rely on an increas-

cultural-oriented economic research. The reasons for the breakthrough of economic cognitive research are mutually accelerating factors of real change (Asian tigers, the collapse of global political blocs that hitherto covered cultural differences, different waves of transition) and the development of theory (the growth of the influence of the institutional economy, the evolutionary economy and economic sociology).

Culture is a dynamic category; it changes over time. Changes are positions, values, norms, principles and customs, ideology, beliefs, behavior, etc. All of this is also linked to social structures, for example, in the economic system. Culture with its elements is the basis for the design and functioning of a social order and hence of economic regulation. It is understandable that social changes are changing with the changes in culture. On the other hand, we can expect that the change in economic

Economic activity of people is thus certainly among those that need to be judged

The concept of culture is very wide, as it covers every part of personal life and has a direct impact on the patterns of life. Culture is a learned way of life within a given society. In essence, culture is a set of values and patterns of learned behaviors

• Cultural heritage as a way of transferring cultural values and norms from

generation to generation (reproduction of cultural patterns)

that are shaped as a result of living within a particular society.

This is enabled by the following processes:

from the point of view of good or bad. In the economy, people enter into urgent interrelationships, within which the basic existential issues are addressed, both at the individual and family level and at the level of the broader society as a whole. The socioeconomic order can only be effective if at the same time as the material goods increase, it also ensures the life of a human being to as many people as possible. In ethical issues in the economy, it is primarily because in material matters we are

ingly detailed conceptual apparatus, which is the result of an international

nisms supporting transition can be overcome.

**2.2 Economic theory: culture and economic success**

regulation will affect the change of culture.

always looking for humanity [15].

**44**


Culture does not stand still but gradually changes.

In the broader sense, the economic system is defined as a set of mechanisms and institutions, laws, rules, traditions, and values that form a certain pattern of decision-making and the realization of economic decisions in the process of social reproduction and a certain pattern of behavior of economic operators [16].

Throughout history, each country has created an indicative concept of culture that has its own specific characteristics. In connection with these cultural characteristics, each country has also developed a specific economic arrangement. Therefore, we can not claim that the economic system is identical in all countries. Of course, this can not be true, as economic potentials and culture, as an important element of economic regulation, are different in different countries. This intertwining of economy and culture was largely neglected in older economic theories. Recent economic theorists, however, are trying to capture the cultural aspect of the economy in their theories.

An indirect link between culture and economy is possible through the role of the state as an institution and instance. In a dynamic market system with incomplete and diffuse information, culture is always the basis for competitive advantages in the realization of transactions.

North [17] states that the rules of the game in society are—or more formal—the constraints that people have built to create interactions. Consequently, they structure the incentives in political, social, or economic exchanges. Institutional changes shape a way of social development and are crucial to understanding historical change.

Institutions can not be seen, felt, touched, or measured—they are constructs of the human mind. However, neoclassical economists recognize their existence and are usually used (implicitly or explicitly) in their models as parameters [17]. In his work of the institution, institutional changes, and economic success, North [17] laid the foundations for the analysis of institutional changes on economic performance.

Keith Hudson [18], in his article in *The Economist*, asks what is crucial for the development—geography, institution, or politics. For many years, economists have emphasized the importance of good economic policy, and lately more emphasis is placed on long-stay institutions—political stability, property rights, the legal system, patterns of land ownership, etc. Other economists, on the contrary, emphasize geography, especially climate diseases, usability of certain technologies, agricultural opportunities, and access to the sea (influencing the extent of international integration). These explanatory factors do not necessarily have to be mutually exclusive1 .

Easterley and Levine [19] tested the importance of these groups of factors on a sample of 72 countries. The results of the survey are very impressive, as they have shown that institutional factors have a key effect on economic performance, while other factors are almost non-negligible.

Conceptual insights from contemporary social sciences show that the modern world is increasingly aware of the cultural condition of economic decisions. The decision-makers are not only economic but also cultural-national. The awareness of these complex relationships has not yet been sufficiently defined and researched. The Hofstede's six dimension model, where people's behavior conditions their values, is the cornerstone for the empirical model. In any case, we are aware that such an operational model has its own shortcomings, as are all mechanical methods [20].

<sup>1</sup> Rich economies usually combine appropriate policies, sound and stable institutions, and favorable geography. Many poor countries are poorly endowed with all three factors.
