Cultural distances

I was looking at something called the World Value Survey. It’s an attempt to measure cultural values and cultural proximity across the world.

The makers of the survey wanted to provide a measurement of all major areas of human concern “from religion to politics to economic and social life”, and found that two dimensions dominated the picture:  (1) Traditional/ Secular-rational and (2) Survival/Self-expression values.

The Traditional/Secular-rational values dimension

The Traditional/Secular-rational values dimension reflects the contrast between societies in which religion is very important and those in which it is not. A wide range of other orientations are closely linked with this dimension. Societies near the traditional pole emphasize the importance of parent-child ties and deference to authority, along with absolute standards and traditional family values, and reject divorce, abortion, euthanasia, and suicide. These societies have high levels of national pride, and a nationalistic outlook. Societies with secular-rational values have the opposite preferences on all of these topics.

The Survival/Self-expression values dimension

The second major dimension of cross-cultural variation is linked with the transition from industrial society to post-industrial societies-which brings a polarization between Survival and Self-expression values. The unprecedented wealth that has accumulated in advanced societies during the past generation means that an increasing share of the population has grown up taking survival for granted. Thus, priorities have shifted from an overwhelming emphasis on economic and physical security toward an increasing emphasis on subjective well-being, self-expression and quality of life. Self-expression is a cluster of values that include social toleration, life satisfaction, public expression and an aspiration to liberty.

The World Value Survey Cultural Map 2005-2008

Now, the Ivory Coast wasn’t included in the survey, but I would put it in the Africa area, maybe a bit higher than Ghana on the secular/rational axis due to there being no one dominant religion. Northern Ivory Coast would probably be where Mali and Burkina Faso are, and the city of Abidjan maybe a bit above that.

The striking thing here, as a Swede doing business in Africa, is that it seems I have maximised the cultural distance.   That Sweden is an extreme point is no surprise, and I’m pretty much in the top right corner myself so I’m fine with it.  Unlike the other protestant European countries, in Sweden there has long been some sort publically embraced strive for modernity which pretty much means top right corner.  Comedian Fredrik Lindtröm, who says the conclusion of the values study is that Swedes are narcissistic engineers, explains it all very well in “Världens modernaste land” with english subtitles.

However, looking at the people I usually meet when doing business in Abidjan, or my Ivorian friends on facebook, they are wealthier and have much stronger self expression values than average Ivorians, and while still having a strong national pride and family values they are a bit up on the secular/rational scale compared to other Ivorians.  In other words, it’s like doing business with Americans!

UPDATE:  I would actually predict that as African countries get wealthier they will move towards and into the bottom of the “English Speaking” area.  Despite being poor African countries have more self-expression values than wealthier China, Russia, Romania or Korea.  I’d guess sub-saharan Africans have intrinsically pretty strong self expression values (with Rwanda seemingly an exception), just held backed by poverty which forces survival values.  Once the African economies get momentum, we’ll see a rapid move to the right on the cultural map.

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Ivorian presidents and the problem with power

Third time lucky?

With Ouattara’s installation today, I started thinking that the two previous heads of state of the Ivory Coast (and maybe Bédié too) seemed quite reasonable and idealistic before accessing power, but then seemed to be transformed by being in power and starting to desire to stay president for the power itself and the advantages it brings – at any cost.

It's good to be President

A while ago I quoted a speech by Vaclav Havel where he describes this process, talking about three different reasons for desiring political power:  idealism, self affirmation and longing for power for the perks it brings.  Havel says that the third type deserves special attention mentioning the  diabolical temptations of power in this sphere, and saying that “This is best observed among those of us who have never held power of any kind before.”

Ouattara has already held positions of power, but that doesn’t mean he is immune, just that the process of wanting power for its own sake is less easily observable.  However, I’m not too worried Ouattara will go down the route of Guei and Gbagbo – the Ivory Coast had bad luck with these two, and the temptations of power process – while it affects everybody – usually doesn’t turn that nasty.

And I would guess being democratically elected and being in power in a democratic system with checks and balances is a bit of a counterbalance. Not that I’m too confident about current checks and balances in the Ivory Coast, but both Guei and Gbagbo in all likelihood ordered extra-judicial killings of quite a few of their own citizens, so it’s hard seeing it getting much worse.

Power and moral hypocrisy

I recently read about a psychological study that appears to confirm some of the problems with power Vaclav Havel was talking about.  Experimental data point to that power in itself causes people to act as if moral rules don’t apply to them, while still applying them to others:

New research from the Kellogg School of Management explores why powerful people — many of whom take a moral high ground — don’t practice what they preach.

In “Power Increases Hypocrisy: Moralizing in Reasoning, Immunity and Behavior,” Kellogg Professor Adam Galinsky and his co-researchers sought to determine whether power inspires hypocrisy — the tendency to hold high standards for others while performing morally suspect behaviors oneself. The research finds that power makes people stricter in moral judgment of others, while being less strict with regard to their own behavior.

Five experiments followed in which researchers examined the impact of power on the moral hypocrisy of the participants. They found a consistent and alarming outcome:  those assigned to the ‘high-power’ group repeatedly condemned moral failures of others while committing unethical acts themselves. In one experiment, high-power participants were asked for their positions on cheating and over-reporting travel expenses, both of which they flatly condemned.  They and the low-power group were then asked to play a dice game alone, in a private cubicle, to win lottery tickets. The powerful reported significantly higher lottery winnings than the low-power group, even though both groups had the same odds of winning.

Three additional experiments further examined the degree to which powerful people accept their own moral transgressions versus those committed by others. In all cases, those assigned to high-power roles showed significant moral hypocrisy by more strictly judging others for speeding, dodging taxes and keeping a stolen bike, while finding it more acceptable to engage in these behaviors themselves.

Suddenly, it feels the world makes a lot more sense.  This seems to explain not only Ivorian Presidents’ actions, but also the likes of Elliot Spitzer and Dominique Strauss Kahn.

UPDATE:  Found an article in Wired from this week that also connects the Galinsky study with DSK:  How Power Corrupts

The Issue of Trust – follow up

Not Polyannas

I found a quite interesting paper called Not Polyannas: High Generalized Trust Predicts Lie Detection Ability by two researchers at the University of Toronto.

It’s about an experiment where participants first make a web survey that measures their generalized trust, ie if they generally trust other people.

People vary in their trusting propensities: Some, who assume that others are generally trustworthy, make themselves vulnerable to their counterparts until evidence challenges their trustworthiness assumptions; others assume that people are generally untrustworthy and act accordingly until their counterparts demonstrate their trustworthiness gradually over time.

Then participants watched videos of simulated job interviews in which half of the interviewees were truthful, and the other half told lies to make them appear as strong candidates for the job. The participants were asked to make judgements about each interviewee including whether the interviewee had lied, how confident they were about this conclusion, to evaluate the interviewees overall trustworthiness and honesty, and whether they would hire the interviewee.

Results

Contrary to popular belief, it turned out that high trusters were better lie detectors than low trusters, less gullible, and formed more appropriate impressions and hiring intentions.

The paper says the following about the reasons behind the observed result:

Yamagishi (2001) has theorized that generalized trust is a form of social intelligence that can be highly adaptive, counter to game theory’s predictions. His model suggests that high trusters, who take more social risks and are, therefore, more vulnerable to exploitation, obtain more differentiating social data and learn more, e.g., ‘‘Ah, this is what someone who will deceive me does.’’ In contrast, by defending themselves from possible exploitation, low trusters seem to be suspicious of everyone: They send signals that limit the development of potentially beneficial relationships and, therefore, in the absence of differentiating social data, they learn less about distinguishing trustworthy from untrustworthy others. Thus, by defending themselves from the costs associated with exploitation, low trusters can incur potentially massive opportunity costs.
…three potential adaptive explanations for a positive relationship between generalized trust and social intelligence . First, high generalized trust drives social risk taking, and the possibility of exploitation pushes high trusters to invest in learning how to identify people who are not trustworthy. Low trusters need no such skills because a social posture of defensiveness is a reliable (if costly) exploitation prophylactic. Second, advanced sensitivity to trustworthiness cues reduces a person’s vulnerability to detrimental consequences. Those who are less sensitive are better off assuming that unknown others are generally untrustworthy, leading to less generalized trust among the less socially intelligent. Assuming that people are liars prevents a person from being duped. In contrast, being effectively sensitive makes it safe to assume that others generally tell the truth because this sensitivity will help detect a lie before a person falls victim to it.

So the paper is saying that those that generally trust other people have greater social intelligence, defined as —‘‘the ability to understand own and other people’s internal state and use that understanding in social relations’’ which leads to benefits in many walks of life.

One important point is that low trusters lose out on opportunities not taken. In a business contexts this would mean missed out deals, investments and business relationships. Business is in many aspects based on trust.

To trust or not to trust

As discussed in the Issue of Trust post, the incentives for dishonesty are much stronger in a developing country like the Ivory Coast, and consequently it makes more sense to have lower trust in others.

On the other hand the benefits and opportunities from having high trust are tremendous, so when doing business in the Ivory Coast one has to handle a balancing act between trusting people, and avoiding being duped. I’d say handling of this is one of the most important factors for business success in a place like the Ivory Coast.

It would be interesting to make the  experiment of the Not Polyannas paper in the Ivory Coast. My guess is that if the high and low trust levels are redefined lower, one would get the same result, but who knows.

Marshmallows scheduled for 2014

I found this little animated video about “time orientation” – how our behaviour is influenced by how we relate to past, present, and imaginary future events.

It turned out to be a compressed version of the following 40 min presentation by psychology prof. Philip Zimbardo:

The Marshmallow experiment

In it Zimbardo, among other things, shows an experiment that checks if children are future oriented, meaning that they are apt at  planning for and achievement of future goals, often at the expense of present enjoyment, delaying gratification, and avoiding time-wasting temptations. A 4-year-old child is offered a marshmallow, the experimenter then says he has to leave the room for a while and tells the child that it will get two marshmallows if he/she can wait. (This part is just in the beginning of the video above,  the ways the children try to avoid eating the marshmallow are a must see!)

It turned out that 14 years later, the children that managed to delay gratification and didn’t eat the marshmallow, scored significantly better results at exams, and were described by the psychologists who made the experiment as confident and self-reliant, cooperative and work well under pressure, whereas the other children labelled “present-oriented” were described as moody, overreact to frustration, prone to jealousy and envy.

It should be said that it’s not as easy as future oriented equals good, and present oriented equals bad. Zimbardo talks about a so called balanced personality type scoring high on future orientation as well as orientations called “present hedonistic” and “past positive”, saying that having only one of these three orientations can be trouble. Those being very future oriented and not much else can have problems with anxiety, worry, social isolation, and over-competitiveness.

Delayed gratification and passive income

Still, the future orientation is important, and I’d say being future oriented is a bit of a precondition to start dabbling in passive income and lifestyle design.  One has to start by planning, working hard and delaying gratification – essentially staying away from the marshmallow.

Today I made an excel spreadsheet for my real estate investments in the Ivory Coast assuming an average 16% return, and some debt financing at 10%. The result was that if I reinvest all the returns and add quite a bit of my own savings every year until the end of 2013, after that I can take out enough money to live comfortably without any other source of income, reinvest the rest and still see the returns continue growing relatively rapidly.