Governance is difficult due to our individualistic culture

In Denmark, farmers signed a climate agreement with the government at the end of last year. Much land will be reforested and farmers will have to deal with a system of emission taxes on the last part of their CO2 emissions. It caused surprise in the Netherlands and elsewhere.

The levy does not seem to be passed on to the consumer. At best, it is useful to stimulate innovation. Financed with the money that is obtained from the levy. The Danes seem satisfied with their agreement, to the surprise of farmers elsewhere. One of the explanations that is put forward is the community spirit of the Danes. Farmers are one group with the rest of society that makes decisions together to move forward.

Differences between national cultures
Time to get Hofstede's cultural study out of the closet. Geert Hofstede became very famous for his study of the differences between national cultures. He had a dataset in which employees of IBM, a multinational in office machines and computers, had answered questions about their relationship with their colleagues, their boss, their employees and numerous office practices. They had the same jobs, the same employer, they just worked in many different countries. Hofstede examined that dataset and found 6 factors that make national cultures different - and within those people differ in personality such as being more extroverted or introverted, but that was not what he was concerned with. Hofstede was concerned with national cultures such as the consensus culture in Japan or the fact that Americans always sell themselves well. And that things went wrong when such an American boss got a Dutch applicant.

After that groundbreaking work, the research has been repeated many times and many differences, also in marketing, have been explained with the factors found by Hofstede. That is why I read the third edition of the book Cultures and Organizations that Geert Hofstede wrote with his son Gert Jan (professor in Wageningen) and Michael Minkov in 2010.

Highest indicator of individualism
In the Netherlands, as in other Northern European countries, the power distance between people is relatively low. We feel equal. Inequality must be minimized, social relations must be handled carefully; toleration and tolerance. Countries that were once part of the Roman Empire have more respect for those in higher positions and treat subordinates differently. A second indicator is the degree of individualism. The Netherlands scores one of the highest on this indicator, behind North America and England. The Dutch work together out of well-understood self-interest, not from a "we-culture".

In terms of assertiveness versus modesty, the Netherlands and Scandinavia are much more feminine, people are more cooperative and less result-oriented. The explanation for this aspect of the culture in the regions around the North and Baltic Seas is sought in the long history of maritime trade that goes back to the Frisians and the Hanseatic League. This trade requires maintaining good relationships. And women had a greater role when men were at sea.

An axis of pleasure
Dutch society is reasonably tolerant of uncertainties. Much more so than, for example, Belgium and Germany, where they prefer to avoid uncertainties, but not nearly as much as in England, Denmark and Sweden. Hofstede's fifth indicator is that of short-term and long-term orientation respectively. Dutch culture is focused on the long term. Finally, national cultures can be distinguished on an axis of pleasure and a certain indulgence in it versus self-restraint and restraint. Northwestern Europe is characterised by the first.

Based on these six indicators, Dutch culture differs from its large neighbours France and Germany. There, bureaucracy with its rules plays a much greater role. Either from the central authority dating back to the Roman emperors (France), or because of a greater need for uncertainty reduction through clear rules (Germany). We share our preference for individualistic solutions through the market with the English and Americans, but masculinity is less important here. We are very similar to Scandinavia, but there is more emphasis on honesty and equality, while ours is more focused on consensus.

A deal based on fairness and equality
Research results that are still fascinating and that help explain why Danish farmers can be persuaded to make a deal based on fairness and equality in their society. While Dutch farmers did not see any well-understood self-interest in reaching a consensus. It also confirms that we will continue to be annoyed by the Franco-German tendency towards bureaucracy in the EU for a long time and that we like to trade. It was not for nothing that we were always the first country to make milk and sugar quotas or payment rights in agricultural policy transferable. Perhaps we should replace bureaucratic permits with tradable ammonia rights. Hofstede, Hofstede and Minkov could substantiate this.

Krijn J. Poppe

Krijn Poppe worked for almost 40 years as an economist at LEI and Wageningen UR and now holds a number of advisory and management positions. For Boerenbusiness he dives into his bookcase and discusses current developments on the basis of studies that have become classic.

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