Social Values and the Economic Development of Regions

Social values are argued to effect economic life. The literature distinguishes several key social values, such as social capital, modernism and tolerance. Overlapping and conflicting views argue that higher levels of social values correlate with higher levels of economic development. Our paper contributes to the literature in two ways. First, we develop a comprehensive theoretical model on the relation between social values and economic development. Second, we test this model for European regions. Our findings suggest that social values matter but that they work on the level of subgroups in the population rather than the region as a whole.