Cultural Constraints on Managerial Productivity: Evidence from World Bank Lending

Abstract

Does cultural misalignment between project managers and the environments in which they operate undermine their effectiveness? Using administrative and project-level data from the World Bank and exploiting rotations of the same managers across countries, we show that project outcome ratings decline when manager attributes conflict with local norms. Projects led by women receive lower outcome ratings in more gender-unequal environments, and projects led by younger managers receive lower ratings where seniority is highly valued. By contrast, less conspicuous cultural attributes, such as nationality-based measures of cultural distance, do not appear to predict project performance.We find no evidence that these effects are driven by sorting on managerial ability. The results are robust to controlling for country and manager fixed effects and to using an instrumental-variables strategy exploiting variation in the supply of eligible managers to address endogenous assignment.