Archive for November 6th, 2015

Cognitive Capital

A (July 2014) paper on ‘Cognitive capital, governance, and the wealth of nations’ (by Oasis Kodila-Tedika, Heiner Rindermann, and Gregory Christainsen) discusses exactly what it promises to. From the abstract:

Good governance or “government effectiveness” (per the World Bank) is seen as a critical factor for the wealth of nations insofar as it shapes political and economic institutions and affects overall economic performance. The quality of governance, in turn, depends on the attributes of the people involved. In an analysis based on international data, government effectiveness was related to the cognitive human capital of the society as a whole, of the intellectual class, and of leading politicians. The importance of cognitive capital was reflected in the rate of innovation, the degree of economic freedom, and country competitiveness, all of which were found to have an impact on the level of productivity (GDP per capita) and wealth (per adult). Correlation, regression, and path analyses involving N=98 to 201 countries showed that government effectiveness had a very strong impact on productivity and wealth (total standardized effects of β=.56-.68). The intellectual class’s cognitive competence, seen as background factor and indicated by scores for the top 5 percent of the population on PISA, TIMSS and PIRLS, also had a strong impact (β=.50-.54). Cross-lagged panel designs were used to establish causal directions, including backward effects from economic freedom and wealth on governance. The use of further controls showed no independent impacts on per capita wealth coming from geographical variables or natural resource rents.

(The takeaway for recent discussions here: Contra NRx dirigistes, high levels of economic freedom are a statistically-significant indicator of sound government but — contra libertarians — the foundation of social competence lies in cognitive capital, and not liberal institutions. Stated reverse-wise: Free societies are a product of deeper things, all feedback complexities aside, but they are — from the perspective of techno-economic functionality — an evidently desirable one.)

November 6, 2015admin 11 Comments »
FILED UNDER :Political economy
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