There are a variety of factor categories to take into consideration when discussing the economic development of a country. One such category that is occasionally overlooked is a country’s social identity and interaction. Economics can be significantly influenced by social and cultural factors — both internally and externally.
Here are a few major social factors that tend to affect economic development.
Discrimination is obviously not a common indicator of societal strength, and in terms of economic development, it can be a significant detriment — particularly to poor countries. Discrimination can stunt the progress of poor countries in terms of their productivity and stability, creating unnecessary civil conflict that can become a distraction from key economic issues. For example, certain discriminatory standards may limit the education of a major demographic within a country, ultimately undermining groups of people who otherwise could contribute to economic growth. Furthermore, discrimination between two separate countries may negatively influence trade and other economic interaction between those countries.
A society’s cultural values can have a subtle, but powerful impact on its business, trade, and development. For example, MakeWealthHistory.org points to a period in China’s history where the country closed its borders as a result of its pride and self-sufficient mentality. Political and religious ideologies, among others, can be cited as major influencing factors in a country’s international relations and trade preferences.
Cultural interpretation can be very important to a society as far as its economics — however, it can also stand as a potential hindrance. From an outside perspective, cultural obligations impeding international trade can lead to frustration resulting from a lack of understanding. Other countries may see these matters as roadblocks or annoyances unworthy of being held in high regard, which in turn can potentially lead to future instances of discrimination, distrust, and intolerance.
Therefore, cultural values can be a double-edged economic sword of sorts.
Beliefs and superstitions
As briefly touched on in the previous section, some societies hinge on their ability to be ideologically cohesive, using prevailing beliefs, creeds, or superstitions as a basis for economic decision making. As EconomicDiscussion.net points out, “a society with conventional beliefs and superstitions resists the adoption of modern ways of living. In such a case, achieving becomes difficult.” In some cases, an immovable ideology can hold a society back in terms of its productivity, but it can also lead to a series of adaptations that allow that society to co-exist with other societies that have adopted modern economics.