Modern Economy, 2011, 2, 324-334
doi:10.4236/me.2011.23035 Published Online July 2011 (http://www.SciRP.org/journal/me)
Cultural Background and Economic Development
Indicators: European South Vs European North
P. E. Petrakis
Department of Economic Studies, National a nd Ka p odi st ri a n Universi t y of Athens, Athens, Greece
Received February 10, 2011; revised April 12, 2011; accepted April 26, 2011
Abstract
This paper examines the relationship between cultural background and economic development. We focus on
the example of Greece in order to analyze the cultural disparities between the Mediterranean and the North-
ern European countries. We find that there is a common cultural model characterizing the Southern European
nations, which spans the Mediterranean coast, from Portugal to Turkey. These countries are characterized by
high uncertainty and absence of future orientation. On the other hand the cultural background in Northern
European countries is found on individualism. The paper shows that the cultural values model is mirrored in
the basic traits characterizing the economic and business environment of the areas (North-South) under ex-
amination. The differential cultural background is reflected in the basic economic and social developmental
indicators in a consistent way.
Keywords: Cultural Background, Economic Development, Growth and Culture
1. Introduction
Discourse into the role of cultural values in the formation
of a society’s economic model, its growth and develop-
ment has its roots in the ancient Greek authors in an effort
to explain economic reality through human behaviours.
The crucial question raised from this discourse is whether
the existing social model promotes or deters growth and
development and whether its evolution follows a favour-
able course for growth.
Within the European Union, Southern European coun-
tries, and particularly the Greek economy, systematically
present macroeconomic characteristics, such as public
over-indebting and a greater propensity to consume, that
contrast markedly with Scandinavian economies. These
characteristics have brought about higher standards of
living, however at a future cost; i.e. loss of welfare for the
generations to come. Other notable features of these
economies are the absence of production and investment
initiatives in innovation, high levels of self-employment,
etc. A macroeconomic behaviour can be considered irra-
tional if certain attributes are not repeated systematically.
If certain economic decisions are repeated, they cannot be
classified as “mistakes”, since economic agents act “ra-
tionally” and are not myopic by assumption. What could
be happening in this case is that economists interpret
these decisions in the wrong context. In other words, the
background information and assumptions made for the
purposes of interpreting the macroeconomic environment
are not the appropriate ones. Therefore, certain forces
within those societies are systematically influential and
contribute in the formation of economic phenomena. We
speculate that such forces are strongly related with the
structure of the specific cultural background and the
long-term development model of these societies.
This issue is particularly timely after the 2008 financial
crisis. The main characteristic of the over-indebted coun-
tries that were hit by the crisis is the government inability
to aggressively intervene by further increasing the deficit,
in order to cover the “potential production gap”. The
study of economic forces deriving from cultural values
cannot help form short-term intervention schemes, since
cultural norms are shaped under long-run influences.
Thus, a deeper understanding of those cultural values is
necessary for the assessment of the efficacy of short-term
policy goals and the elaboration of an efficient long-term
development strategy.
The rest of the article proceeds as follows: Section 2
discusses the cultural dimensions that we are focusing on,
in this paper. Section 3 presents some preliminary evi-
dence for the cultural differences between Northern and
Southern European countries. Section 4 presents, in detail,

P. E. PETRAKIS325
the dominating cultural model in the Greek society. Last,
Section 5 concludes.
2. Context of Culturality
Hofstede contributes to the valuatory, international com-
parative research literature in the following way [1,2]. He
comes up with a set of values which can be used to meas-
ure a country’s cultural background. Hofstede argues that
these valuatory dimensions describe humanity’s problems,
present in all societies [3]. Countries have different scores
per dimension demonstrating that various societies handle
these problems differently. Hofstede identifies four di-
mensions, which pertain to: power distance (i.e. the ac-
ceptance of inequalities), uncertainty avoidance, indivi-
dualism in opposition to collectiveness, and masculinity
in opposition to femininity [4].
The Global Leadership and Organizational Effective-
ness (GLOBE) study, conducted in the mid 1990s, adds to
Hofstede’s culture dimensions [5,6]. This research aims
to explore the relationship between social culture, organ-
isational culture and practice, and organisational leader-
ship. The GLOBE study establishes nine dimensions of
social culture that reflect society perceptions of me-
dium-ranged managers, and their preferences on desired
social traits. These dimensions are: power distance, un-
certainty avoidance, institutional collectiveness (Collec-
tiveness I), intra-group collectiveness (Collectiveness II),
gender equality, imposition, future orientation, effective-
ness orientation, and human orientation. Those dimen-
sions resulted from bibliographic research on a vast sam-
ple of studies on culture measurement and the existing
intercultural theory [7-11].
Table 1 presents the dimensions of social culturality in
light of existing research. The dimensions described in
points 1 through 4, derive from Hofstede’s respective di-
mensions [12]. The first three correspond to power dis-
tance, uncertainty avoidance, and individualism respec-
tively. Point 4 relates to the dimension of masculinity. In
Table 1, the role of religious background is mentioned as
a separate dimension. Religious background is not a dif-
ferent value per se, since its influence expands over the
whole valuatory background. However, it is addressed
here due to lack of in depth examination and analysis of
religion within the Greek society.
Many researchers have concluded that religion creates
and influences personal values and mentalities [13]. For
instance, according to Weber [14], individualism, prefer-
ence in personal choice and autonomy, and pursuing per-
sonal objectives are distinct features of Protestantism. By
contrast, Confucianism is family- and group-oriented,
shows respect for age and hierarchy, prefers harmony,
and avoids conflicts and competition.
According to Weber, the Protestant “moral” plays a
significant role, since it emphasises the tireless, endless
acquisition of goods that was developed in some areas of
Protestant Europe. Weber argues that Protestantism is the
cradle of the modern economic person and that Calvinism,
in particular, has accentuated individualism, personal
potential, and initiative.
Even though modern capitalism was the result of the
social structure in the Western world, it would have been
inconceivable without Calvinism’s contribution to freeing
the acquisition of goods from the restrictions of tradi-
tional morality [15].
The connection between cultural values, stemming
from the influence of the Orthodox Christian doctrine,
dominating roughly 90% of the population of Greece and
other Balkan countries for almost two millenniums, and
economic activity has not been sufficiently examined.
Table 1. Dimensions of social culturality.
(1) Power distance (Acceptance of Inequalities)
(2) Uncertainty Avoidance
(3) Individualism vs Collectiveness (3.1) Institutional Collectiveness
(Collectiveness Ι)
(3.2) Intra-group Collectiveness
(Collectiveness ΙΙ)
(4) Masculinity vs Femininity (4.1) Gender equality
(4.2)Imposition
(5) Confucian Dynamism/ Future Orientation
(6) Efficiency- orientation
(7) Human orientation
(8) The role of Religion

P. E. PETRAKIS
326
One of the rare sources examining this connection is H.
Economou [16]. It is worth mentioning the author’s ap-
proach to religious beliefs, which are holistic and “com-
prise principles that produce or inspire economic theory
and practice” (p. 150). An essential element of the Or-
thodox religious approach is that humans are not rulers of
the natural world but rather users and managers. Addi-
tionally, all “goods to be managed” (knowledge and ma-
terial goods) come from the outside (from God) and are
free: They are “divine trusts”. In Orthodox writings, there
are no specific negative references to profit, but the ten-
dency to maximise profit is strongly criticised. The per-
sonal benefit of the giver and responder to anyone’s par-
ticular needs is not of material nature but rather of “moral
and psychological nature” [17]. Thus, “the business activ-
ity is the opposite of religious, spiritual activity, which
pursues the theoretical and experiential approach in the
life issues. The activity of the human spirit comes first,
prepares and leads the course of the economic activity”
[18].
Based on these observations, it is understandable that
the Orthodox Christian perception is not favourable to the
notion of property, since according to this perception
there are no belongings and nothing comes from the ma-
terial world. If material goods are not at the centre of the
cultural background, then we are drifting away from the
logic of accumulation and therefore from the procedure of
growth. At the same time, the Orthodox doctrine seems to
move in an opposite direction from the process of profit
maximisation, which is the necessary motive for activat-
ing the economy and the growth process.
3. Empirical Indications for Ranking
Cultural Values
Table 2 presents the ranking of Greece and selected
Mediterranean and Northern European countries for each
of the culturality dimensions, according to the Hofstede
[19] and the GLOBE study criteria [20]. Hofstede’s util-
ized a sample of 53 countries, whereas GLOBE used 61
countries. The GLOBE scores refer to practices (as is)
and not to values (as it should be). The purpose of divid-
ing the countries in our sample in two sub-groups is to
make the cultural differences between the south and the
north more apparent. The first group, the Mediterranean
countries, is comprised of Spain, Italy, and Portugal,
while the second group, the Northern European countries,
is comprised of Denmark, the Netherlands, Sweden, and
Finland.
Table 2 leads to the following conclusions:
1) On the issue of cultural values, Greece may be con-
sidered as a typical Mediterranean country in the sense
that its ranking either places it within the limits of Medi-
terranean countries’ rankings or very close to those lim-
its.
2) Regarding the cultural indicators there is a clear dis-
tinction between the two groups, i.e. the Mediterranean
and Northern European countries.
Hofstede and GLOBE deliver similar rankings for the
two groups of countries. Nevertheless, it is necessary to
Table 2. Ranking of: greece, me diterr anean and northern europe countries as to the dimensions of social culturality, based on
the hofstede and GLOBE researches. Data coming from hofstede are marked with H; the GLOBE data bear no identification
sign.
Dimensions/Countries GREECE
MEDITERRANEAN
COUNTRIES NORTHERN EUROPE COUNTRIES
27 (H) 24 - 34 (H) 40 - 51 (H)
(1) Power Distance (Inequalities Acceptance) 21 15 - 20 47 - 60
(2) Uncertainty Avoidance (According to Hofstede) 1 (H) 2 - 23 (H) 31 - 51 (H)
(3) Individualism vs. Collectiveness 30 (H) 7 - 33 (H) 4 - 17 (H)
3.1 Institutional 61 46 - 56 1 - 20
3.2 Inta-group 35 26 - 41 54 - 60-
(4) Masculinity vs. Femininity 18 (H) 4 - 45 (H) 47 - 53 (H)
4.1 Gender equality 29 15 - 52 5 - 31
4.2 Imposition 60 11 - 46 1 - 18
(5) Confucian Dynamism Time orientation 51 37 - 56 4 - 14
(6) Efficiency-orientation 61 37 - 55 19 - 48
(7) Human-orientation 59 41 - 60 14 - 38

P. E. PETRAKIS
327
comment on the ranking for the uncertainty avoidance
dimension. The GLOBE research presents several dif-
ferent results on the uncertainty avoidance dimension
when compared to Hofstede’s findings: Mediterranean
countries have a lower ranking, implying lower uncer-
tainty avoidance levels. The explanation might lie in the
fact that Hofstede did not include Central and Eastern
European countries in his sample. Additionally, the two
studies used different measurement means in order to
render this dimension operational [21]. Veneik and
Brewer report 14 correlations between Hofstede’s and
GLOBE’s measures of cultural values [22]: five vari-
ables are statistically significant and bear the expected
sign (positive), eight bear the expected sign but are not
statistically significant, and for one (uncertainty avoid-
ance) there is a large negative and statistically significant
correlation between the two measurement ways, which is
strongly unexpectes. These two studies are similar in the
social culturality dimensions they develop, except for
“uncertainty avoidance”. Generally, the two studies are
similar in the rankings they create between societies,
except for the “uncertainty avoidance” dimension. Ve-
neik and Brewer are also concerned with this issue and in
particular with the disparate findings for Greece and
Portugal [23]. They base their interpretation of these
disparities on the time difference (two decades) between
the two studies. However, this interpretation does not
sound convincing due to the slow pace characterizing
behavioural and cultural changes. The authors rightly
note that the two studies measure opposing concepts.
This is due to the nature of the questions of the surveys
themselves. The present study adopts Hofstede’s meas-
urement of “uncertainty avoidance” because it is com-
patible with the risk measurements (see Table 3.2, lines
2, 3 and 4) which prove that the Mediterranean countries
have always been characterized by systematically higher
risk levels. This fact justifies the formation of chronic
risk avoidance behaviours.
The model of cultural values formed in the two groups
of countries is roughly the following: Mediterranean
countries accept more widely the existence of greater
inequalities and (according to Hofstede) and demonstrate
higher rates of uncertainty, when compared to Northern
European countries. Individual achievements are not
highly appreciated and at the same time the socially es-
tablished organization rules and practices are not ac-
ceptable. Nevertheless, individuals express pride, faith,
and cohesion with their families and any specific social
group they belong to. Feminine values, such as quality of
life, care for the weak, and solidarity play a small part
and are characteristic features of Northern European
countries. Accordingly, the values of imposition and of
dispute do not seem to prevail.
The Mediterranean countries examined here are char-
acterized by limited future orientation, lack of scheduling
and long-term planning and portray low efficiency and
human orientation levels while their main focus is on
short-term planning.
4. Synthesis on the Cultural Model of Greek
Society and Economy
Greece exhibits sociocultural traits similar to those of
other Mediterranean countries. The formation of a social
model for the Mediterranean as well as for Scandinavia
is primarily based on common elements shared by the
members of each group of countries (geography, evolu-
tion, history, etc.).
4.1. Basic Description of the Model
The cultural model of Greece consists of a synthesis of
priorities. Despite the existence of a high degree of ine-
quality in areas such as wealth, revenue, and power in
Greece, the general feeling is disapproving of inequali-
ties. It is characteristic that the GINI indicator (Table 3.1,
line 2) for Greece, and the Mediterranean countries in
general, is significantly higher (indicating a more un-
equal distribution) compared to that of the Northern
European countries.
The degree of uncertainty avoidance is high, while the
risk levels experienced by the social model are also large.
It is worth mentioning that all risk indicators―total risk,
political risk, and economic risk (Table 3.2, lines 2, 3,
4)―are higher (lower indexes) in the Mediterranean
countries than the Northern European countries. In addi-
tion, fear of crime is much more intense in Mediterra-
nean countries (see Table 3.2, lines 6, 7), compared to
Scandinavia, although Mediterranean countries experi-
ence considerably lower crime rates. Fear of crime has
an inverse prevalence, demonstrating that these countries
“are worried” and “scared” about the present and the
future.
Regarding future-orientation rankings, Greece is in the
51st place, a considerably low point among the 61 coun-
tries included in the sample. This fact points to poor use
of long-term planning. This implies that in general, there
is a short-term perspective in the country and poor use of
programming and long-term planning. The individualiza-
tion of effort and the value of individual achievements
are of low priority. The society does not encourage or
reward its members adequately or according to their
performance, while other indicators show that Greeks
point to the need for wider recognition. According to
Papalexandris there is a general trend of mistrust in indi-
vidual achievements and highuccess levels [24]. Com- s

P. E. PETRAKIS
328
Table 3.1. Economic indicators.
Mediterranean countries Northern countries
NR Variable Year Data
Greece Italy Spain PortugalNetherlandsDenmark Norway SwedenFinland
1 Rate of Growth
(GDP per capita)
Average
1999-2007 3.8% 0.9% 2.3% 1.2% 1.3% 1.6% 1.7% 2.8% 2.0%
2 Equality index
(Gini coefficient) 2000 32.1% 35.2% 31.9%38.5% 27.1% 23.2% 27.6% 23.4% 26.9%
3 Public debt
(% GDP)
Average
1999-2007 99.9% 107.4%48.5%58.6% 54.8% 42.1% 43.9% 52.2% 42.7%
4 Private consumption
(% GDP)
Average
1999-2007 71.8% 59.1% 58.3%64.2% 48.7% 48.5% 44.4% 48.5% 51.1%
5
Gross formation of
fixed capital (%
GDP)
Average.
1999-2007 22.2% 20.6% 27.8%24.0% 20.1% 20.3% 20.0% 17.6% 19.1%
6 Exports (% GDP) Average
1999-2007 22.0% 26.4% 26.6%29.3% 68.7% 47.3% 42.7% 47.2% 41.7%
7 Parallel Economy
size
Average.
2001-2002 28.5% 27.0% 22.5%22.5% 13.0% 17.9% 19.1% 19.1% 18.0%
8 Household wealth
per capita 2000 $72.825 $119.704$92.253$53.357$120.086 $66.191$72.254 $80.091$38.754
petition is usually combined with individualism, a ten-
dency to mistrust, difficulty sharing responsibilities or
combining efforts in order to achieve a common goal,
and constant disputes over facts or ideas.
It is worth noticing the lack of efficiency orientation in
the Greek society. The introduction of evaluation proce-
dures (quality assurance and transparency) at all levels of
education has not been fully implemented. Accordingly,
public acceptance of entrepreneurship seems to be mov-
ing to lower levels in the Mediterranean countries than in
the Northern European countries, except for Denmark
(Table 3.2, line 14).
In Greece as well as in other Mediterranean countries,
trust in institutions and participation in collective proce-
dures is particularly low (see Table 3.2, line 7). On the
other hand, intra-group collectiveness recognized mainly
within families (a form of institution), is strongly repre-
sented in the Greek society. According to a Eurobaro-
meter study on European society, 100% of Greeks be-
lieve that family is the most important social institution
[25]. This fact explains to a large extent the low atten-
dance rates of children in infant care in the Mediterra-
nean region when compared to Northern Europe (Table
3.2, line 9). According to Triandis intra-group collec-
tiveness pertains to differences between an attitude to-
wards a member of a group and an attitude towards a
non-member [26]. The group may include immediate
family, relatives, and friends. Its members enjoy protec-
tion, trust, and support in exchange for their faith, devo-
tion, and sacrifices. However, non-members are treated
with suspicion and hostility.
In Greece the majority of firms are family businesses.
Georgas reports that intra-group collectiveness has sig-
nificantly influences the way Greek companies are or-
ganized and managed [27]. Even in cases where the
company grows in size and activities, the owner-director
recruits people from his direct environment, such as im-
mediate family, other relatives, and friends, rather than
specialized professionals that he doesn’t personally know
[28]. It is suggested that the particularly slow develop-
ment of Greek businesses is highly attributable to the
coincidence of ownership and management [29,30].
Greece has a “masculine” social organization which is
developing in the absence of social solidarity and care
for the weak. Consequently, it is not surprising that there
is poor orientation towards human needs. A world full of
uncertainty and reduced collective trust leads to the ac-
quisition of individual wealth as the ultimate form of
security. It is worth noting that the level of individual
wealth in Greece is higher than in Denmark and is com-
parable to that of Norway (Table 3.1, line 8). Generally,
the levels of individual wealth in Northern European
countries are lower than those in Mediterranean countries.
The citizens of Northern European countries live more
“happy life years” (Table 3.2 , line 1) using services that
improve quality of life and are not necessarily related to
individual wealth levels. Nevertheless, in the North there
is rejection of the value of imposition and poor encour-
agement for competition in social relationships. Similarly,
“feminine values” in the Mediterranean countries are
weak. An example of that is the concern about environ-
mental quality, which is substantially different between
Mediterranean and Northern European countries (see
Table 3.2, line 17).

P. E. PETRAKIS329
Table 3.2. Developmental indicators.
Mediterranean Countries Northern countries
Variable Year
Greece Italy Spain PortugalNetherlandsDenmark Norway SwedenFinland
1 “Happy life years”*1 2008 50.4 54.4 57.8 44.0 59.1 65.4 61.7 62.2 69.0
2 Total Risk*2 2007 72.2 77.2 77.5 77.5 85.0 86.5 92.2 87.2 88.2
3 Political Risk*3 2007 77 79 80 83 84.5 85.5 89.5 88.5 94
4 Economic Risk*4 2007 35.5 39.0 39.5 35.5 45.0 44.0 48.0 46.0 46.0
5 Criminality*5 2004 12.3 12.6 9.1 10.4 19.7 18.8 15.8 16.1 12.7
6 Fear of Criminality*6 2004 42 35 33 34 18 17 14 19 14
7 Confidence in national
institutions*7 2006 –16.0% –31.0%–8.0% –23.0% 1.0% 7.0% - 3.0% 30.0%
8 Participation in groups*8 1999/2000 8.9% 23.8% 24.5% 18.0% 44.8% 65.1% 40.9% 55.2%
9
Participation percentage of
children (<3 years) in
organized infants’ care units*9
2005 7.0% 6.3% 20.7% 23.5% 29.5% 61.7% 43.7% 39.5% 22.4%
10 Corruption index*10 2008 4.7 4.8 6.5 6.1 8.9 9.3 7.9 9.3 9
11 Owner occupancy dwelling*11 ≈80% ≈72% ≈80% ≈50% ≈65% ≈65%
12 Employment*12 2007 61.5% 58.7% 66.6% 67.8% 74.1% 77.3% 77.5% 75.7% 70.5%
13 Entrepreneurship
acceptance*13 2007 65.9% 68.5% 61.0% 67.2% 68.8% 79.1% 56.6% 67.4% 84.8%
14
Concept of public opinion on
entrepreneurship
acceptance*14
2007 43.4% 43.9% 45.5% 51.2% 61.1% 35.5% 69.5% 62.8% 68.3%
15 Rating of the business activity
framework*15 2009 96 65 49 48 26 5 10 17 14
16 Governance Efficiency*16 2007 70 65 81 80 95 99 100 98 98
17 Gas emissions (millions in
CO2 equivalents)*17 2007 131.85 552.77 442.3281.84 207.5 66.64 55.05 65.41 78.35
*1: Estimates how long and how happily people of each country will live [36]. *2: The index of total risk is a calculation of separate risk indicators (economic,
financial, political, etc.) and its values are from 0 to 100. When the index increases it means the risk levels of a country are reduced and vice versa. Source PRS
Group, ICRG database. *3: The index of political risk is a calculation of separate measurements of political risk (for instance internal and external conflicts,
quality of public administration, corruption, etc.) and its values are from 0 to 100. When the index increases it means the political risk in a country is reduced
and vice versa. Source: PRS Group, ICRG database. *4: The index of economic risk is a calculation of separate indicators of a country’s economic situation (for
instance growth rate, inflation levels, balance of current transactions and budget, public debt levels, etc.) and its values are between 0 and 50. When the index
increases it means the economic risk in a country is reduced and vice versa. Source: PRS Group, ICRG database. *5: The index shows the population percent-
age reporting criminal acts. Source: OECD, Society at a glance, 2009. *6: The index shows the population percentage expressing fear of walking the streets
after sunset. Source: OECD, Society at a glance, 2009. *7: Positive minus negative opinions on the national institutions. Source: Eurobarometer 66 (2006). *8:
Source: European Values Study 1999/2000. *9: Source: OECD, Society at a glance, 2009. *10: The Corruption Perception Index is drown by calculating sepa-
rate indexes from answers in questionnaires by people with knowledge on the relevant subjects. Source: Transparency International, 2008. *11: Source: French
Statistics’ Agency (www.insee.fr). *12: Source: OECD, Society at a glance, 2009. *13: Percentage of positive answers in a question about accomplishment and
respect towards those who establish a new business successfully [37]. *14: Percentage of positive answers to a question on promoting success stories of new
businesses, by the media [38]. *15: The index is an indication for business facilitation and derives from calculation of separate indexes (for instance, facilitation
in new business establishment, recruitment of partners, obtaining credits etc). Source: World Bank, Doing Business. *16: The governance efficiency index
derives from statistical processing of questionnaire answers given by citizens, company employees, and experts in related fields. Its value is between 0 and 100.
The higher values mark governance efficiency and vice versa. Source: World Bank, Governance Indicators, 2007. *17: Source: Eurostat, env_air_emis, GHG
4.2. “Old” and “New” Societies
In the Greek economy cultural values are not just present
but also strongly felt. It is worth comparing Greek and
Scandinavian societies focusing on the four basic values,
Power Distance (PDI), Individualism (IDV), Masculinity
(MAS) and Uncertainty Avoidance (UA) [31]. The sum
of all points for the Scandinavian countries is 140, while
for Greece it is 269. Of Scandinavia’s 140 points, 69
account for the value of individualism (IDV).
The strength of the Greek results indicate that in
Greece (which is not different, as seen, from other
Mediterranean countries) there is an active cultural
background that could potentially benefit growth and
development. However, the exact opposite result occurs
if culture is not conducive to that direction. We claim

P. E. PETRAKIS
330
that the societies of the South have a “strong subcon-
scious” as “old” societies. On the other hand, northern
societies are “new”, lack a firm background, and are
therefore more open to cultivation of modern values that
provide them a satisfactory level of happiness. It is worth
noticing that in the “happy years of life” index (that is
the combination of satisfaction with life according to the
Gallup World Poll and life expectancy) the Northern
European countries have a lead of almost a decade com-
pared to the Mediterranean countries (Table 3.2, line 1).
4.3. The Basic Difference between the Two
Models
The difference between Greece and Scandinavia derives
from two values. For Greek society this value is uncer-
tainty avoidance, and for Scandinavia it is the importance
of individualism. These factors determine the vitality of
growth and development processes.
Morris et al. connect the dimension of individualism
with entrepreneurship [32]. They focus on the concept of
individualism in relation to the level of incitement for
achievements and the desire to breach the rules con-
nected to entrepreneurial action. Hofstede observed equi-
valence between economic indicators, such as per capita
GDP, and the dimension of individualism [33]. Although
the positive correlation between the two is not evidence
of causation, societies with a high individualism index
and low power distance index present higher economic
growth and stronger tendencies for innovation. This fact
is also confirmed by Shane [34].
Uncertainty avoidance in practice orients the social
model away from entrepreneurship (Table 3.2, line15)
but is able to cover survival needs through “secure” em-
ployment positions, i.e. in the public sector. It is re-
markable that approximately 27.4% (or 1,250,000 work-
ers) of the Greek labor force is employed in the public
sector, either as permanent employees (60%) or as con-
tract servants (40%). Lack of individualisation and rec-
ognition of personal achievements are among the most
important features of the prevailing cultural values model.
Serious discourse regarding the lack of these two values
in the Greek society took place between 1995 and 2005.
The most crucial contribution to this matter was done by
Ramfos in an attempt to relate the value of individualiza-
tion with its substitution by the constant reference to the
“state entity” [35]. The establishment of the significance
of state entity in social conscience should also be attrib-
uted to the historical evolution of the neo-Hellenic soci-
ety, in combination with high risk levels in the economy.
Besides, the acceptance of power distance in the Greek
society favours in particular the dominance of the state,
in the operation of which the citizens do not bear the
direct costs and at the same time are relieved from deci-
sion-making responsibilities. These features led to 1) the
formation of a strong bureaucratic management (requir-
ing multiple approval signatures), 2) the absence of per-
sonal responsibility in business successfulness, and 3)
lack of methods of control and evaluation of personal
activity, that lead to poor efficiency orientation. As a
result, Mediterranean countries are rated lower than
Northern European countries in governing efficiency
(Table 4.2, line 16).
At a first glance we observe a controversial correlation
between institutional entity and institutional collective-
ness, which however, can be intuitively explained in the
following way. Lack of strong individualism in the
Greek society is not due to its replacement by organized
collectiveness (where the person participates with re-
sponsibilities), but rather by a transcendent entity (that
resembles the divine ownership of the Orthodox doctrine)
that acts instead of the person.
The existence of such an entity a priori acts as an ob-
stacle to the motivation for entrepreneurship in the sense
that “it is not needed” and eventually “not approved”,
especially when it requires tying up resources for a con-
siderable period of time.
The second level of individual protection (after the
invocation of the state entity) is the promotion of in-
tra-group collectiveness, mainly comprising human and
social networks. As a cultural value, intra-group collec-
tiveness does foster the operation of the labor market
because it blocks important work forces. However, at the
same time it produces unusual levels of trust and social
cohesion. These two values are present in local markets,
however remain absent when a market is globalizes.
Consequently, the expectation of economic extroversion
is confirmed (see Table 3.1, line 4).
Individualization and “denial” of institutional collec-
tiveness in combination with promotion of “masculinity”
(aggressiveness) result in a non-regulated market opera-
tion, an example of which is the development of a paral-
lel economy and economic delinquency. The Mediterra-
nean countries demonstrate higher rates of parallel
economy (as a GDP percentage, see Table 3.1, line 5)
while the corruption index take lower values (indicating
higher corruption levels, see Table 3.2, line 11,) in the
Mediterranean countries compared to Northern European
countries.
4.4. Time Orientation and the Future
Hofstede and Bond showed that the measure of future
orientation and of delayed gratification named Confucian
Dynamism is positively related to the economic growth
of the Asian Tigers from 1968 to 1985 [39]. Dornbusch

P. E. PETRAKIS331
et al. comment on the economic miracle of those coun-
tries, underlining that hard work, sacrifices, education,
savings, and investment relate to economic growth [40].
Societies with members that sacrifice immediate con-
sumption for future consumption should experience faster
growth.
Using the database of the World Values Survey (2006),
Minkov and Blagoev point out that cultures demonstrat-
ing high savings rates show for the most part small in-
terest in entertainment, family, and contribution to their
fellow men [41]. The pessimism observed in Greek soci-
ety is connected to the lack of future orientation. More
specifically, in Greece we observe a strong pessimism
for the future, expressed by high percentages of people
who think that the economic situation and employment
will only deteriorate (55% and 59% respectively) [42]. A
study of the Eurobameter data surveys on the European
Union public opinion for the years 2001 and 2008 leads
to the conclusion that there is a progressively decreasing
number of Greek citizens who expect progress in social
issues [43-48].
It is extremely difficult to understand whether pessi-
mism and the lack of future orientation are related in a
causal manner or if the two simply coexist having dif-
ferent generating causes. Such a cause would be the so-
cial understanding of the potential of the development
model, which is limited. Another cause, however, could
be the gap between the actual life of a person as com-
pared to the perception of the real possibilities at his
disposal. It should be noted that this pessimism is also
abundant in other Southern European countries and less
so in Northern European countries. However, these val-
ues evidently drive people away from saving and invest-
ing and therefore away from growth, while pushing to-
wards consumption (see Table 3.1, line 3). Consumption
as a GDP percentage is higher in the Mediterranean
countries than in Northern Europe. The lack of future
orientation is equivalent to macroeconomic behaviours
expressed through political parties and governments as
global social perceptions. The constant presence of pub-
lic deficits in national accounts implies a strong prefer-
ence for the present rather than the future (see Table 3.1,
line 2). Public deficit as a percentage of GDP in the
Mediterranean countries is higher than in Northern Euro-
pean countries. This is another significant drawback of
the Greek managerial malpractices due to lack of strate-
gic long-term planning [49]. Makridakis et al. argue that
the lack of long-term planning is a result of i) increased
uncertainty for the future, ii) frequent legislative
amendments, and iii) unpredictable facts that force Greek
managers to restrict themselves to short-term planning
[50].
The lack of future orientation is also obvious in the
existence of high uncertainty levels that correlate with
the observation that the most preferable investment for
Greeks (and for other Southern Europe countries) is to
“have a roof over your head”, i.e. to invest in homes.
Greece presents one of the highest owner-occupancy
dwelling rates in the measurable world (see Table 3.2,
line 12). Additionally, in a world of uncertainty and a
lack of respect towards institutional collectiveness, and
the services provided by this collective entity, it is rea-
sonable to make efforts to expand personal wealth as a
means to secure the individual and his/her family from
the “hostility of the outside world”.
4.5. Self-Employment and Parallel Economy
Promotion of self-employment and the lack of creative
entrepreneurship are highly related with 1) the degrada-
tion of personal achievements, 2) the downgrading of the
value of profits in conjunction with the promotion of
competitiveness, and 3) the lack of faith in collective
work.
Self-employment has its roots in the lack of employ-
ment opportunities in the public sector, which is usually
the first employment choice in the Greek society, as well
as the private sector. “Masculinity” is expressed through
personal independence that goes along with self-em-
ployment. At the same time the individual tackles the
risks of the liberal profession using his personal net-
works. Consequently, a big proportion of the Greek labor
force is self employed (see Table 3.2, line 12). Future
uncertainty and the resulting reluctance to tie up capital
in business development contributes to higher self-em-
ployment levels.
From a cultural point of view, the parallel economy
expansion results from the coincidence of a number of
values. The lack of trust in institutions, combined with
the dominance of intra-group collectiveness, and the re-
jection of institutional collectiveness play the most sig-
nificant role. However, at the same time, an equally im-
portant role is played by the poor future orientation, in-
cluding the pessimism that prevents tying up resources.
In this view, an unwillingness to participate in the cost
carried by the society (tax evasion) is acceptable, fol-
lowed by the over-indebting of the “other entity” (the
state) that maintains the “inexpensive” improvement of
the living standard, while increasing the opportunities to
expand personal wealth. The parallel market delinquency
is cultivated by the masculinity background. Under these
circumstances, entrepreneurship develops by “extract-
ing” legitimacy from the state entity in a process of con-
flict between the two powerful actors (businessmen and
the state entity).

P. E. PETRAKIS
332
4.6. The Role of Religion
The social model described above is influenced by the
religious background (the Orthodox doctrine for the
Greek economy), whose role is independent of signifi-
cant driving forces of growth (ownership and accumula-
tion, the maximisation of profit). This conclusion is
based, not on the spiritual context of the doctrine (which
is rather negative on some issues), but rather on the lack
of will of the Orthodox Church to intervene in everyday
economic life. The Church’s practice in some areas of
economic reality (asset management, Church of Cyprus,
etc.) confirms this point of view. We note that in the Or-
thodox doctrine there are no ideological promotional
factors present in other religious beliefs, such as Protes-
tantism and Confucianism.
4.7. The Mediterranean vs Northern European
Model
A particularly interesting observation is that the cultural
value model found in Greece is common in almost all
Mediterranean countries and has specific differences
from the Scandinavian model. Let us explore the forces
that have interacted or still interact in the Mediterranean
societies forming homogenous value standards. Geogra-
phy, for instance, plays an important role. In the case of
Greece, geography relates to the temperature, the sea,
and the geological proximities. These proximities pertain
to the distance from technology production and innova-
tion centers of Central and Western Europe as well as the
proximity with the Arab countries in the South and Tur-
key in the East. Additionally, in the Balkans there are
strong Arab influences, and the cultural influence bor-
ders are indistinguishable. Within the last two millenni-
ums, this proximity involved a constant influence and
frontier redistribution process. The main feature of these
redistributions was their permanent and irregular charac-
ter (repeated invasions, piracy in the Mediterranean, etc.).
During the last two millenniums in Northern Europe
conflicts occurred along with constant changes in fron-
tiers. Perhaps the risk presented in South Europe had a
sense of “total” disaster due to the cultural conflict. This
conflict, unlike the case of Northern Europe, was not
characterised by unequal distribution of regions with
economic influence.
A simple comparison of the cultural value systems (as
Hofstede puts them) in Scandinavian, the Mediterranean,
the Arab countries and ultimately in Turkey (Table 4)
led to the following conclusions. The cultural models
characterizing the Arab countries are almost identical.
The Turkish cultural model is closer to that of the
Mediterranean region. In terms of cultural values and for
Table 4. Cultural models in Scandinavian countries, in the
Mediterranean, in the Arab World and in Turkey.
PDI IDV MASUA
Scandinavian Countries
(Norway, Sweden, Denmark,
Finland)
24 65 9 38
Greece 60 35 57 112
Italy 45 70 63 70
Spain 52 45 38 80
Portugal 58 20 25 98
Turkey 60 30 40 80
Arab World
(Egypt, Iraq, Kuwait, Lebanon,
Libya, Saudi Arabia, UAE)
80 38 52 68
the purposes of future research in this area, we argue that
it is evident to re-define the South European region to
include all countries from Portugal in the West through
Turkey in the East. This is due to the common cultural
factors present in these countries.
In addition, the Mediterranean model resembles more
that of the Arab nations than the Scandinavian ones.
Hence, we arrive at the conclusion that the determinants
of the cultural models characterizing the Mediterranean
and the Arab region are similar, however in the Mediter-
ranean these forces had a smaller impact over time.
These forces can be identified among the founding com-
ponents of Western civilization, i.e. religion and climate.
Given the above we conclude that the existing cultural
model in the Mediterranean countries is not the result of
extreme and continuous conflict but rather, the result of
an endless, constant mix of cultural models in the area
which took place under the interaction of common pri-
mary forces, identified above.
5. Conclusions
This article provides a description of the cultural back-
ground of the Greek society and its impact on economic
development. We also establish significant similarities in
the cultural backgrounds of the Mediterranean countries,
mainly characterized by uncertainty and pessimism about
the future. On the other hand, the cultural background in
Northern European countries is founded on individual-
ism and does not heavily rely on the social values exam-
ined through the course of the present study; these values
are however central in the Southern European cultural
model. With reference to the contribution of culture to
development and economic growth in Greece, one of the
strongest aspects is intra-group collectiveness (that holds
only for local business initiatives, whereas it has the op-

P. E. PETRAKIS333
posite effect when it comes to globalized initiatives).
With regards to elements that impede economic devel-
opment and growth in Greece, one can identify religion,
low levels of individualism, high power distance, uncer-
tainty avoidance, poor future orientation, and weak ori-
entation towards individual needs.
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