David Emanuel Andersson

Values in a Border Region – Part 2 March 17, 2009

Posted by David in Economics, Personal stuff, Politics, The Social Sciences.
Tags: Border Regions, Inglehart, Oresund, World Values Survey
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The outline of my new book project is slowly taking shape. This is the latest version:

Title: Values in a Border Region: The Invisible Bridge?

 

Chapter 1: Border Regions of the World.

                                                                                                   

Border regions differ substantially in terms of cross-border differences, and there are several dimensions that may slow down cross-border integration processes. This chapter discusses and analyzes such differences. The chapter offers a brief introduction to the Øresund region as well as seven other comparable regions from around the world.  A gravity-type regression model is used to decompose the effect of time distance from the effects of various institutional barriers such as language or legal barriers on interactions such as trade (national data), migration (national), and scientific cooperation (functional urban region data). A model is also estimated for commuting patterns within the Øresund region in order to separate time distance, land price difference, and national boundary effects (reflecting cultural differences).

 

Factors with potential effects on actual cross-border integration:

 

Geography: Time distance, natural barriers/limitation of feasible route choices (water, mountains). Øresund: short time distance between Copenhagen and Malmö – but only one route.

 

Language: Is the same or a similar language spoken? Is one of the languages spoken as a second language on one side, or is there a joint second language such as English? Is the majority language on one side a minority language on the other side?

 

Politics: Are there institutional differences that raise transaction costs associated with business ventures (e.g. different legal systems and/or business regulations). Are there barriers to trade, migration or capital flows?

 

Level of economic development: Are differences good or bad for integration? (Differences may reflect complementarity but may also give rise to political tensions). Note that similar levels may also allow for complementarity and, anyway, integration may in all cases cause emergent agglomeration economies. Øresund: similar levels of development on both sides; some cross-border clusters but also some clusters that are confined to one side of the sound (relative trade-off: comparative advantages versus transaction costs).

 

Religion: The religious affiliations of a population may reflect their informal institutions. Øresund: similar mixture of Lutheranism, agnosticism, and atheism; large Muslim minority.

 

In general: Values are seen as reflecting religion (starting point), economic development (evolution of values), and politics (evolution of values). Values tend to be less dependent on language and geography.

 

Eight case studies (ten-page introduction about Øresund; three-page introductions about each of the other seven regions)

 

Commuting maps should be included here. Three maps from a French article (Basel, Geneva, Luxembourg) are useful and a similar map could be constructed with the help of commuting data for the Øresund region.

 

Chapter 2:  Values, Preferences, and Individual Behavior (What comes first – Economics or Culture?)

 

In this chapter individual behavior is analyzed as a rule-based activity, where the decision rules can be modeled according to psychological findings (Simon and Gigerenzer), or according to economic theories of expected utility maximization with institutional constraints.

 

Values tend to form early and mostly remain more or less the same for life. Preferences are much more fickle, and refer to ordinary market exchanges and consumption of relatively non-durable goods and services. Preferences tend to be altered by a variety of factors such as learning processes, momentary psychological states, and life-cycle effects.

 

Values form part of the institutional structure if they are shared among a group of people. When a majority or substantial subset of a population has a value in common it becomes an informal institution. When several values tend to occur in combination, we speak of a value system.

 

There are two main theoretical approaches to understanding the formation of values. The “thin” approach is to understand shared values as institutional side constraints. The thick approach is to investigate how institutions are formed and transmitted within a population. Values are then institutions that create both intersubjective utility-shaping structures as well as constraints on human interaction.

 

In economics, there are three approaches that illuminate different aspects of the role of value systems in society:

 

1.           The intersubjective approach emphasizes realistic foundations over common neoclassical assumptions such as independent and stable individual preferences or competitive markets. Experimental psychology and models of innovation and imitation processes then become important building blocks for understanding individual value formation and group interdependencies. Psychologists such as Herbert Simon and Gerd Gigerenzer have stressed the importance of satisficing behavior, lexicographic choice and the role of intuition, while institutional-evolutionary economists from Thorstein Veblen to Geoffrey Hodgson have stressed expressive (other-directed) consumer behavior as well as the contrasts between inert, imitative, and innovative behavior. While this approach has mainly been concerned with the abstract concepts of individual choice and preference, it is but a short step to extend this approach to value systems.

2.           A second approach takes orthodox neoclassical economics as a starting point, but relaxes certain key assumptions to come to grips with imperfect knowledge and positive transaction costs. Institutions are then understood as constraints on individual behavior that enable individuals to cope with uncertainty when interacting with others. This approach is closely associated with new institutional economists such as Ronald Coase, the early Douglass North, and Oliver Williamson.

3.           A third approach is more concerned with macro-phenomena and the evolutionary competition among different institutional packages. Different institutions give rise to different levels of procreation, survival, and technological progress. Only those cultures that have happened to evolve “institutional packages” that enable societies to both ensure a sufficient supply of food and shelter as well as to resist the encroachments of other cultures will endure. Both military conquest and imitation of institutions that are perceived as being successful elsewhere influence the relative success and dissemination of specific cultural, economic and political institutions. Important theorists in this field include Jared Diamond, Friedrich Hayek, and Douglass North (in the later stages of their respective careers).

 

In the social sciences outside of economics, there are four approaches – with implications for values system analysis – that have been especially influential:

 

1.           The Marxian approach, where values and culture is seem as a non-autonomous “superstructure” to (i.e. a reflection of) the prevailing economic organization of society.

2.           The culture-first approach of Max Weber and Morishima: the cultural and religious institutions of society determine attitudes to accumulation, wealth creation, and innovation. In this scheme, it is the relative “productivity” of values with economic consequences that determine long-term economic success.

3.           Inglehart’s  theory of modernization and postmodernization processes. Inglehart claims that while different societies have different cultural starting points, these values are not unchanging. Instead, they co-evolve with the economic evolution of society. In other words, culture and economic development are interdependent factors.

4.           The “varieties of capitalism” approach that sees distinct economic systems as a reflection of the contrasting values of different societies. While industrialized market economies are more productive than pre-industrial or centrally planned societies, different types of societies will develop slightly different institutions as a reflection of different values. Gert Hofsteede’s “cultural dimensions” are associated with this approach.

 

Typology of goods/services

Publicness/Speed of change	Fast change	Slow change
Individual or household-specific	Preference-based consumption; satisficing or constraint- based decisions	Decisions based on perceived risk and net present value calculations.
Public or shared by large groups of people	Fashions; imitation and diffusion models	Value systems and other institutions

 

 

 

Chapter 3: Value Demography and the Cohort Replacement Hypothesis.

 

This chapter concerns the relatively slow pace at which social value systems change. Are these changes a consequence of economic development or of other evolutionary factors? Does every new generation carry a value structure to be part of a long term substitution process, during which the values of older generations are replaced by the values of younger cohorts?

 

This chapter gives a brief introduction to Inglehart’s cohort replacement theory as well as a few empirical illustrations from the World Values Survey. In addition, demographic processes are discussed such as the effects of fertility and mortality rates as well as inter-cultural migration. What are the impacts of values on demographic behavior? Are the high birth rates of Muslim societies persistent during migration processes? Do women adapt to local values after migration to Scandinavia?

 

Chapter 4: Denmark and Sweden: An Avant-garde Region of Global Values?

 

In Inglehart’s studies there are ample examples of a special position in the value diagrams for Scandinavia and the Netherlands. It seems as if northern Europe has a value structure that is distinct from other postindustrial regions of the world. How and why?

 

Inglehart’s diagrams show Scandinavia, North America, the Netherlands, and Switzerland leading the transition toward postmodern and postmaterialist values. This is consistent with their being the most postindustrial regions of the world in terms of industrial specialization, knowledge production, and innovation propensity. There is however a marked difference regarding a second dimension associated with industrialization (the choice between “rational-legal” and “traditional” authorities) where Scandinavia (especially Sweden) is most similar to mainland China, Japan, and eastern Germany. In Inglehart’s scheme, industrialization substituted faith in Government and Science for faith in God and Family. However, this tendency was much more pronounced in northern Europe and Confucian Asia than in Catholic Europe and North America. And while the transition from industrial to post-industrial society is associated with skepticism toward all forms of authority (and a greater role for individual as compared with collective authority choice), this tendency is also less pronounced in Scandinavia in general and Sweden in particular.

 

An interesting hypothesis is the importance of “secular faiths” in Scandinavia and especially Sweden;

 

Hypothesis 1: Faith in the creation of the perfect Welfare State (1930-1980) and Faith in the creation of the perfect Environmental State (1980-)

Hypothesis 2: Faith in Family and/or God tends to be associated with non-socialists and non-environmentalists (assuming that other political ideologies are weaker/vaguer in Scandinavia).

 

Chapter 5: Value Change and the Political Lag

 

Are the political parties responsive to changing values or will the long-term evolution of values generate a “silent revolution” of politics in democracies? What are the interdependencies between value systems and political systems?

 

Hypothesis 1: Politics is a “lagging variable”: it changes, but it will reflect the average values of older cohorts.

Hypothesis 2: The political system influences values by providing a “default” orientation point – existing policies have an intrinsic advantage because they represent the “normal,” “no-change” situation (see psychological theories).

 

Chapter 6: The Emancipation of Women: Gender Differences and Gender Convergence

 

Earlier value studies have shown that many important choices are associated with important remaining gender differences, for example in entertainment preferences and in the choice of education and occupation, while many other values are converging.

 

In general, Swedes and Danes are less committed to the social preservation of gender roles (see Hofsteede’s Masculinity Index for various countries). However, there are still systematic gender differences associated with individual work and leisure choices.

 

Also, women tend to have more postmodern values than men, other things being equal. This has been a consistent finding, both in earlier Swedish and Danish surveys and in the World Values Survey.

 

This chapter provides a general description of gender differences in Denmark and Sweden, with a comparison between the 1992 and 2009 surveys. Rankings of masculine/neutral/feminine values use the following index:  (p1-p2)/(p1+p2)*100, which results in an index with a range from ‑100 to +100

 

Chapter 7: Religious Faith, Agnosticism and Atheism: The Decline of Organized Religion in Scandinavia

 

Most recent value studies have shown that the populations of northern Europe in general and specifically Denmark and Sweden are increasingly secular – in contrast to North America. Is this true also of the young generation of Danes and Swedes? Will the trend toward a non-religious society continue? What are the consequences?

 

A relevant starting point is the institutional difference in religious structure: a marketplace of religions in North America and religious monopolies or oligopolies in Europe. Stark and Fiske have studied American religious trends and have found “product differentiation” and religious divergence to be increasingly apparent within the US, with gains for total “lifestyle packages” (e.g. Mormonism); no religion (secularization), and new religions (e.g. New Age) at the expense of low-commitment, low-service traditional churches (Episcopalians, Lutherans etc.) Catholics have partly avoided the fate of other mainstream religions by means of internal segmentation with different levels of commitment and service.

 

There is also the question of the welfare state crowding out the philanthropic function of churches (as well as crowding out non-religious philanthropy).

 

Chapter 8: Diagnosing Extremist Values

 

The Copenhagen-Malmo region is experiencing increasing ethnic segregation and extremist behavior in civil society and the political system. Similar tendencies have been observed in other border regions. Are extremist values retained by a portion of the young generation?

 

The chapter discusses and analyzes factors that may be related to intolerance of “out-groups.” The “out-groups” are also analyzed in terms of their socio-economic characteristics. One important aspect is the spatial distributions within the Øresund region. Does intolerance tend to be directed at all groups, or are there “clusters” of intolerance that are associated with various background variables? (For example: general intolerance, drug intolerance, religious intolerance, sexual intolerance etc.)

 

In this chapter, an intolerance index will be applied: (12 – number of groups not liked)/12*100. This index ranges from 100 – every group accepted –  to 0 – no group accepted. Comparisons are made between genders, educational programs, socio-economic backgrounds, municipalities, immigration background, and countries (S/DK). Comparisons regarding specific out-groups are also carried out.

 

A logit equation should be estimated to explain the importance of different variables in determining (and predicting) the probability of out-group intolerance.

 

Chapter 9: Education and Work: The Changing Money-Happiness Trade-off

 

The older generations in industrial society tended to prefer monetary returns in terms of wages and salaries to jobs promising creativity, communication and self-control. Recent value studies have indicated that the choice of education and work increasingly favor creative and interesting jobs at the expense of monetary returns.

 

It should also be noted that monetary returns to educational investments in Denmark and Sweden are among the lowest in the western world. Do low monetary incentives matter less when other job attributes are deemed to be more important?

 

Chapter 10: Should I Go or Should I Stay: The Urban-Rural and the National-Global Trade-offs

 

Nothing seems to be as dominant as the migration to highly urbanized areas. This would favor conurbations like the Copenhagen-Malmö region with its population of almost three million. Another emerging tendency is a desire to combine an urban job with a semi-rural residential location. Is this desire different when viewed from a short-term and a long-term perspective? Most value systems studies have also shown an increasing tendency to look upon the leading global metropolitan regions as a network of accessible labor markets. Will global differences in economic returns lead to a “brain drain” from the Øresund region to more remunerative positions in global metropolises such as London or New York.

 

Chapter 11: Housing Preferences and the Future of Land-use Planning

 

Swedes and Danes spend a large share of their income on housing. This is especially true of the largest metropolitan regions. There is also a general tendency for housing to be income-elastic. But the choice of housing involves a number of unavoidable trade-offs, particularly concerning housing attributes such as lot size, floor area, workplace accessibility, leisure accessibility, and socio-economic neighborhood character. What do young people prioritize? Do they give priority to the same factors regardless of time horizon? Has environmental concerns given rise to new housing preferences?

 

The preferred type of housing has profound implications for the economic viability of alternative land-use plans. Both property developers and municipalities may therefore benefit from being well-informed about the desires of the young.

 

Chapter 12: Homo Ludens and the Importance of Being Entertained

 

One of the most rapidly growing sectors of postmodern society is the sector generating experiences, entertainment and the arts. The young generation of today have more generous income and time constraints in their pursuit of satisfying leisure activities. The entertainment sector is therefore one of the most income-elastic. What are the leisure pursuits of the future?   What are the trade-offs?

 

Chapter 13: The New Nature Worshippers: Health, Environment, and Sustainability

 

One of the most visible changes in recent years has been the increasing priority given to quality-of-life attributes such as health, environmental quality, and ecological sustainability. This is apparent from politics, the mass media, marketing, and popular entertainment. What does this imply about the political and economic life of the future? What does it imply about housing, leisure, and lifestyle choices? And what are the differences between different parts of the region and different socio-economic and ethnic groups?

 

Chapter 14: Cross-sound Interaction Before and After the Bridge

 

This chapter compares how the bridge has affected actual behaviour patterns and attitudes by comparing the responses from 1992 with 2009. Is Øresund substantially more integrated today than 15 or 20 years ago?

 

Chapter 15: Øresund Values: Long-run Convergence or Stable Contrasts?

 

Summary and conclusions

 

Appendix:  Statistical Methods and Data