THE ROLE OF CULTURE AND GOVERNMENT ADAPTABILITY IN DETERMINING COUNTRIES’ ECONOMIC PERFORMANCE

Abstract

This study is an addition to the body of research about the relationship between culture, governance, and national economic performance. Specifically, it focuses on the mediating role of government in the relationship between national culture and Gross Domestic Product growth. We utilize the GLOBE study’s eight cultural dimensions and the World Economic Forum’s Government Adaptability Index to conduct a cross-sectional analysis in fifty-seven countries. Our results indicate that institutionally collectivist and future oriented societies are more likely to have governments that are adaptable to economic and technological changes and, thus, have a greater capacity to stimulate the output per capita growth. Additionally, the results suggest that cultural dimensions are related to each other, and these relationships may improve national economic performance. The findings provide valuable insights into policy decision-making and leadership.