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Self-­‐Efficacy and Modernization. On the Origin of Change. Barbara Drosten 2016 Self-­‐Efficacy and Modernization On The Origin of Change Universität Hamburg Fakultät für Wirtschafts-­‐ und Sozialwissenschaften Dissertation zur Erlangung der einer Würde Doktorin der Wirtschafts-­‐ und Sozialwissenschaften “Dr. rer. ” pol. (gemäß der PromO vom 17. Juni 1998) vorgelegt von Barbara Drosten aus Meppen Hamburg, den 23.Januar 2018 Vorsitzender: Pro. Dr. Andreas von Staden Erstbetreuer: Prof. Dr. Rainer Tetzlaff Zweitbetreuer: Prof. Dr. Matthias Basedau Datum der Disputation: 13. Dezember 2017 Self-­‐Efficacy and Modernization. On the Origin of Change. Barbara Drosten 2016 For Ruben, Lea and David Self-­‐Efficacy and Modernization. On the Origin of Change. Barbara Drosten 2016 Self-­‐Efficacy and Modernization On the Origin of Change ABSTRACT: Self-­‐efficacy is the critical link between environment, culture, institutions, and modernization. It is the primum movens of change through learning by enabling human tation adap to environmental and circumstantial stimuli. Self-­‐efficacy develops everywhere at all times, but in different strengths, domains, and levels. It is equally required in both developed and less developed economies. A lack f o self-­‐efficacy in leaders, elites, and ordinary electorate reating can foster ret to manipulation or force, to exploitation and circumventing rules to pursue one´s interests. Self-­‐efficacy is not genetic but learned and culturally transmitted. Individuals and communities with high self-­‐efficacy believe to be able to learn and change their behavior favorably, and profit from doing so because they rned have lea that through positive past experience in a effort rewarding environment. Their past success ts bege future success through opportunity recognition, higher risk taking, better cooperation, and higher and longer . investment In contrast, individuals and communities with low levels of self-­‐efficacy experience an unrewarding environment that does not support their efforts, and thereby does not foster learning and change and the development of higher self-­‐efficacy. In a self-­‐fulfilling prophecy, without experiencing positive consequences to one´s activities, one will resist or not actively seek change becau se of the belief fail. to Fortunately, the development -­‐ of self efficacy can be nurtured by targeted policies and measures. Better understanding how self-­‐efficacy works and develops will increase the efficiency and effectiveness of economic development and modernization policies. The goal of these policies is to foster economic performance and societal progress. Economic performance reflects how much humans change their t habita , while culture reflects the collective experiences in that habitat in norms, habits and rules. -­‐ Self efficacy as the in orig of human behavior change vitally influences economic activity and social progress as changes can be brought about by the belief in one´s abilities without retreat ing to force or manipulation. KEYWORDS Self-­‐Efficacy; Modernization; Learning; Economic Performance; onomic Ec Development, Cultural Evolution. Self-­‐Efficacy and Modernization. On the Origin of Change. Barbara Drosten 2016 Table of Contents page 1. Introduction 1 1.1 Approach 12 1. 2 Contribution 16 2. What is Self-­‐Efficacy? 23 .1 2 Concept 23 2.2 Development and the question of identity 28 .3 2 Self-­‐efficacy in the economic and political process 31 2.4 What is not self-­‐efficacy: related concepts 40 3. How Self-­‐Efficacy Fits into the Theoretical Framework 44 3.1 Modernization and Development 44 3.2 Materialistic Approaches 52 3.3 The Human Factor 61 -­‐ Culture 68 -­‐ Institutions 82 -­‐ Policies 87 4. Modernization as a Process of Individual arning and Collective Le 90 4.1 Modernization is Learning for Change 90 4.2 Different Kinds ning of Lear : Collective and Individual 96 4.3 The Act of Learning 101 -­‐ Information and Knowledge 102 -­‐ Filters 103 4.4 Behavior Change 110 4.5 Utilities 112 -­‐ Utilities of Individual Learning and prospect theory 115 -­‐ Group "production" of learning in strong and weak groups 122 4.6 Learning and Identity 125 4.7 Prerequisites for Learning 129 Self-­‐Efficacy and Modernization. On the Origin of Change. Barbara Drosten 2016 4.8 Negative Ways of Learning 131 -­‐ Wrong-­‐Learning 132 -­‐ Pathological Learning 135 -­‐ Non-­‐Learning 136 5. Questions around Self-­‐Efficacy 138 5.1 Asymmetries 138 5.2 Proxies 140 5.3 Fostering Self-­‐Efficacy 143 5.4 Self-­‐Efficacy is Not Genetic 145 5.5 Empirical Testing of Self-­‐Efficacy 151 6. Historical Return On Investment and Current Economic Outcomes: The Cultural Evolution of Investment Self-­‐Efficacy 155 Abstract 155 6.1 Introduction 156 6.2 A Simple ent Ag Based Model 161 6.3 Empirical Framework 166 6.4 Empirical Analysis 168 6.5 Robustness Analysis and falsification Tests 183 6.6 Discussion and Conclusion 188 7. Theoretical Considerations on Self-­‐Efficacy-­‐Driven Modernization 191 8. Conclusion: A Culture of Learning Instead of Knowing Needs Self-­‐Efficacy 205 9. Outlook on Further Research 209 References 212 Acknowledgements Self-­‐Efficacy and Modernization. Origin On the Of Change. Barbara Drosten 2016 “Yet, only one thing has to be remembered: there is no effect without a cause, and there is no lawlessness in creation.” Albert Einstein1 1. Introduction When Acemoglu´s and Robinson´s (2012) suggested that the single most important factor for poverty was bad institutions, their conclusion was not only widely applauded, but also criticized as oversimplification, ethnocentrism, reversing causality or wrongly ignoring factors like geography, culture, uncontrollable and/or external circumstance and their historically-­‐based argumentation as suffering from a hindsight-­‐biased interpretation.2 In this discussion between the most renowned social scientists of our times, probably all aspects of influence on a nation´s prosperity were named, all of which for good and proven reasons, and to all of which counter examples could be found though. There are successful countries with warm or cold climates, democracies and dictatorships raising countries out of poverty, countries of different religious beliefs and geographical situations being successful and unsuccessful. So far, no pattern has unanimously been identified, that could include or explain the notorious exceptions to the assumed rule. Possibly, this is due to the lack of identifying a “general transmission belt”: an operative tool which actually could “work” to causally relate culture, environment and geography to economic performance, the formation of the political process, and the shaping of institutions. 1 Cited ter af Hermanns, William (2011). 2 Actually, Engermann &Sokoloff and North, Wallis & Weingast had earlier and found suggested in a range many of works aspects of what A&R later as wrote up a congruent explanation. Their critiques range from Bill Gates to Jared Diamond, Jeffrey Sachs, William Easterly, Paul et Collier al. 1 Self-­‐Efficacy and Modernization. Origin On the Of Change. Barbara Drosten 2016 This work suggests that self-­‐efficacy (SE) could be this “missing ” link which translates environment into culture and institutions, and all three to economic development and political participation. The psychological concept of SE was developed by Albert Bandura in the 1970´s nsively and has been exte empirically tested in a multitude of domains and applications; it was found as of high explanatory value for causally affecting human behavior and decision making. Here, I apply the concept of self-­‐efficacy to the process of development and modernization, and trace its effects in an extensive appraisal of the existing political and economic development . literature I research if it could be self-­‐ efficacious agents ho w m Adam Smith3 (1776/2000) describes as labourously, in rational self-­‐interest, chances reckognizing and s opportunitie persuing producers of the Wealth of Nations; if it could be self-­‐efficacy what constitutes Parson´s (1964) “evolutionary universal in development”, and account for the differing adaptive and creative capabilities of populations. Indeed, when Tetzlaff (2017)4 questions the possibility of development rn to produce Weste benefactions like financial well-­‐being, health, freedom, education, justice, individual choice and security outside of the (Western) economic and political system that brought these values about, self-­‐efficacy to develop people instead of a system may be an universally employable answer and vital part of an explanation for the different pathways of development that the people of 5 the world have taken . We can define economic performance as reflecting how much humans intervene in their natural habitat and change it -­‐ or nowadays re-­‐nature it -­‐, which also reflects if that habitat requests human intervention, how responsive it is, and if it 3 Smith describes drastically the distruction -­‐ of self efficacy unless protective policies are enforced: “But in every improved and civilized society this is the state (of lack of exertion, b.d.) into which the labouring poor, that is, the great body of the people, must cessarily ne fall, unless government takes some pains to prevent it.", p.840. 4 cmp. p. 10; see also discussion the on theories, nation state and systems of development, p.20 5 please see chpt. -­‐ 5.4: Self Efficacy is Not Genetic. 2 Self-­‐Efficacy and Modernization. Origin On the Of Change. Barbara Drosten 2016 tends to react positively
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