In a 2010 paper on time preferences*, the authors Mei Wang et al. conducted an experiment in which participants could choose either $3400 now or $3800 a month later. Now I would choose the latter option but maybe it’s just because I’m intelligent and have been living in the West for quite a while. In other countries this is not the obvious choice however.
We see the usual correlates. Countries that are richer; more Germanic; less corrupt; more intelligent – they all have more future time orientation. In countries that have a Communist legacy future time orientations are perhaps lower than we might expect them to be otherwise.
This all of not insubstantial relevance because time preference can have an impact on economic structure and social life. For instance, as the paper notes, societies with higher future time orientation are likely to devote more attention to the environment. They are also likely to devote a greater share of their GDP to R&D.
There are some other intuitions we can make. In societies were more people are prepared to wait for more money we can expect savings rates to be higher. The structure of the economy will likely be more tilted towards things like hi-tech manufacturing (which requires a ton of R&D and capital) and less towards say IT (in which you can launch a start-up with just a small group of programmers) or resource extraction.
Confirming all the stereotypes, the Germanic peoples (Germany, Austria, Switzerland) were at the very top of the charts. This is ingrained in culture (and perhaps genetics to some extent?) because even gifted Americans were less likely to choose to wait than even the average German: “Even for the students from Princeton University, the percentage choosing the patient option is lower than the percentage of German students (80% vs. 89%).”
The Israelis have high future time clocking in at 80%. I would not be surprised if this rises to 90% among Ashkenazi Jews. A similar proportion of Czechs (basically Germanized Slavs) also choose to wait (the word “robot” came into English from the Czech word for laborer).
About 70% of Americans and Brits would choose to wait. However, there is no Anglo unity on this question – the rate for Australian and Kiwis is much lower at about 50%. Why the discrepancy? There’s the old trope about Australia being a nation of convicts, who tend to have low future time orientation, but less than a quarter of Australians are actually descended from exiled criminals. Surely other factors are at play. Maybe it’s a function of Australia’s resource wealth, much of which is shipped off to China without even being refined to add value. Sounds pretty short-termist to me. From what I observed its infrastructure also leaves a lot to be desired.
China clocks in at 60%, considerably lower than 70% in Taiwan, Korea and Japan, and 80% in Hong Kong. Confucianism has always praised foresight: “If a man take no thought about what is distant, he will find sorrow near at hand.” Surely this gap can be ascribed to the Maoist legacy.
In Spain, Greece, and Italy only 45% would choose to wait – less than a majority. No wonder they are always running up debts and devaluing… except that now it is no longer a straightforward option.
Less than 40% of Russians would choose to wait. Note that we are talking about the late 2000′s now so immediate economic instability and inflation are no longer germane factors in the decision on whether to get $3400 now or $3800 later. Part of it I suppose is the Communist legacy but knowing what I know of Russia I cannot imagine this figure ever having been a lot higher. Russians are a lot more impulsive and short-termist than their IQ would indicate. This low future time orientation is reflected in realities such as the high rate of corruption, the limited success of manufacturing enterprises, and the greater relative success of services and IT.
Low future time orientation also calls for a strong state capable of correcting these quintessentially Russian deficiencies. After all many things have to be developed over a time period longer than most Russians’ wallets to bear fruit: Infrastructure, industrial policy, stabilization and “rainy day” funds of all sorts, etc. No wonder that a coherent state in Russia only arose once the arguing tribes invited the Varangian (Nordic) Rurik to come rule over them, and the outstanding success of Germanic-influenced rulers (Peter the Great, Catherine, Putin) at improving the country in general.
As for Nigeria there is no hope. Future time orientation appears to be so low (<10%) that it would predominate even among the elites. Angola on the other hand has pretty respectable future time preference. Maybe that is why southern African countries like Angola itself along with Botswana have constructed pretty respectable states that benefit the people with oil/minerals revenue, while the likes of Nigeria and Equatorial Guinea wallow in poverty and total corruption. Basically their entire ruling elites are kleptocracies.
* I came upon this while trawling through GNXP archives. Here is Razib’s analysis.
PS. Can compare and contrast with Money Mania, By Country.