lues at the cultural level, such as those employed by Hofstede (1984), Triandis (1995) and Schwartz (1994). Hofstede proposes a one dimensional structure called simply individualism-collecti vism; those cultures that emphasize the autonomy of the person are grouped under individualism, while those cultures whose most important values place emphasis on the dependency of the individual with respe...

We construct an endogenous growth model that includes a cultural variable along the dimension of individualism-collectivism. The model predicts that more individualism leads to more innovation because of the social rewards associated with innovation in an individualist culture. This cultural effect can offset the negative effects of bad institutions on growth and leads to a higher growth rate a...