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Do Institutions Affect Social Preferences? Evidence from Divided Korea

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Author Info

  • Kim, Byung-Yeon

    ()
    (Seoul National University)

  • Choi, Syngjoo

    ()
    (University College London)

  • Lee, Jungmin

    ()
    (Sogang University)

  • Lee, Sokbae

    ()
    (Seoul National University)

  • Choi, Kyunghui

    ()
    (University of Tokyo)

Abstract

The Cold War division of Korea, regarded as a natural experiment in institutional change, provides a unique opportunity to examine whether institutions affect social preferences. We recruited North Korean refugees and South Korean students to conduct laboratory experiments eliciting social preferences, together with standard surveys measuring subjective attitudes toward political and economic institutions. Our experiments employ widely used dictator and trust games, with four possible group matches between North and South Koreans by informing them of the group identity of their anonymous partners. Experimental behavior and support for institutions differ substantially between and within groups. North Korean refugees prefer more egalitarian distribution in the dictator games than South Korean students, even after controlling for individual characteristics that could be correlated with social preferences; however, two groups show little difference in the trust game, once we control for more egalitarian behavior of North Koreans. North Korean refugees show less support for market economy and democracy than South Korean subjects. Attitudes toward institutions are more strongly associated with the experimental behaviors among South Korean subjects than among North Korean subjects.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7567.

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Length: 48 pages
Date of creation: Aug 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7567

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Keywords: social preferences; experiment; institutions; market economy; democracy;

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  1. Roland Benabou & Jean Tirole, 2011. "Laws and Norms," NBER Working Papers 17579, National Bureau of Economic Research, Inc.
  2. Michal Bauer & Julie Chytilová & Barbara Pertold-Gebicka, 2014. "Parental background and other-regarding preferences in children," Experimental Economics, Springer, vol. 17(1), pages 24-46, March.
  3. Dawes, Christopher T. & Johannesson, Magnus & Lindqvist, Erik & Loewen, Peter & Östling, Robert & Bonde, Marianne & Priks, Frida, 2012. "Generosity and Political Preferences," Working Paper Series 941, Research Institute of Industrial Economics.
  4. Gachter, Simon & Herrmann, Benedikt & Thoni, Christian, 2004. "Trust, voluntary cooperation, and socio-economic background: survey and experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 505-531, December.
  5. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
  6. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.
  7. Algan, Yann & Cahuc, Pierre, 2014. "Trust, Growth, and Well-Being: New Evidence and Policy Implications," Handbook of Economic Growth, in: Handbook of Economic Growth, edition 1, volume 2, chapter 2, pages 49-120 Elsevier.
  8. Marcus Noland & Stephan Haggard, 2011. "Witness to Transformation: Refugee Insights into North Korea," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4389.
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