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Social polarization impedes economic development of European regions

30 October 2017
© Robert Hoetink / Nationale Beeldbank

Social polarization has a negative impact on economic development. For the first time, research recently conducted by Sjoerd Beugelsdijk, Mariko Klasing and Petros Milionis of the University of Groningen has substantiated this effect with figures. They analysed data on 250 regions in the European Union, publishing their findings in the Scandinavian Journal of Economics.

‘The extent to which the norms and values of various social groups differ will ultimately influence a region’s economic growth. Polarization leads to less willingness to collaborate or share, and is therefore detrimental to regional development’, says Beugelsdijk.

Clear indication

Political developments in the United States and various European countries point to increasing polarization, according to the researchers. Beugelsdijk: ‘Our findings clearly indicate what needs to be done. The trend towards polarization must be stopped, and social groups must reconnect. Not only will this make Europe a more pleasant place, it is also good for our wallets’, says the International Business and Management professor.

Fascinating questions

Beugelsdijk is an expert on the relationship between culture and economics. In 2012 he was awarded a Vidi grant for his project ‘Value heterogeneity in economics and business’. The article in the Scandinavian Journal of Economics presents findings from that line of research. ‘What is the impact of norms and values on economic development? What influence does a society’s culture have on regional economic growth? These questions fascinate me. It is a wonderful challenge to express in numerical terms abstract concepts which we all know are relevant, but which are difficult to delineate. This study is unique in that we have been able to quantify the great diversity of values in so many European regions.’

Arbitrary borders

The researchers were surprised by the great variety of values and norms within countries. ‘In this light, geopolitical boundaries appear arbitrary. There proved to be a lot of cross-border overlap of norms and values. The fault lines within Europe are defined by social groups which are international. This casts new light on discussions about the best way to run Europe, where decision-making is nation-based.’

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Last modified:27 October 2017 4.58 p.m.

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