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Redistributional Preferences and Imposed Institutions

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  • Alberto Chong

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  • Mark Gradstein

Abstract

To what extent do imposed institutions shape preferences? We consider this issue by comparing the market-versus-state attitudes of respondents from a capitalist country, Finland, and an ex-communist group of Baltic countries, and by arguing that the period of communist rule can be viewed as an experiment in institutional imposition. We find that, consistent with some earlier related work, citizens from ex-communist countries tend to be more supportive of state ownership than respondents from capitalist economies. However, they also favor increasing inequality and competition as the means to enhance incentives. We conclude that, in some important relevant dimensions, institutional imposition (which lasted for about 50 years) had a limited effect on preferences. The lessons for Latin America are straightforward.

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Paper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 4482.

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Date of creation: Oct 2006
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Handle: RePEc:idb:wpaper:4482

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