Tolerance and economic growth revisited: a note

• Published in: Public choice 2012-12, Vol.153 (3-4), p.487-494
• Main Authors: Bomhoff, Eduard J., Lee, Grace Hooi Yean
• Format: Article
• Language: English
• Subjects: Bias; China; Commentary to; Convergence; Culture; Datasets; Eastern Europe; Economic Development; Economic growth; Economic theory; Economics; Economics and Finance; Europe; Freedom; Gays & lesbians; GDP; Global economy; Gross Domestic Product; Growth models; Homosexuals; Hypotheses; International; Peoples Republic of China; Per capita; Political Science; Postcommunist Societies; Public choice; Public Finance; Reform; Regression analysis; Service industries; Statistical analysis; Studies; Tolerance
• ISSN: 0048-5829; 1573-7101
• DOI: 10.1007/s11127-012-0022-1

Berggren and Elinder (BE) in this journal write on the relationship between the degree of tolerance in a nation and its rate of economic growth. They are disturbed to find in their cross sections that faster economic growth statistically goes together with intolerance of homosexuals. In this comment, we revisit the issue and demonstrate that the concern expressed by BE is unwarranted if we properly account for “conditional convergence” in the regressions for economic growth. Other things being equal, a country grows faster if it starts from a poorer initial position. In the BE dataset, China since the Deng reforms is a prime example. At about the same time, another group of countries managed to accelerate their economic growth after a long period of stagnation: the ex-communist countries in central and Eastern Europe. Many of these nations also grew exceptionally fast for a number of years, once freedom had been regained and the initial chaos overcome. With simple modeling of these historical initial conditions, we find no statistical pattern that associates bias against homosexuals with weaker economic growth. Our results are robust under alternative specifications.