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Learning, Political Attitudes and the Crisis in Transition Countries

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  • Pauline Grosjean

    ()
    (School of Economics, The University of New South Wales)

  • Frantisek Ricka

    (European Bank for Reconstruction and Development)

  • Claudia Senik

    (Paris School of Economics)

Abstract

We estimate the impact of the recent economic crisis on support for democracy and a free market economy in 30 post transition countries and five western European countries. Political values are cyclical and reflect a learning process. Support for the market and democracy has decreased between 2006 and 2010 in countries that were hit the hardest and that were the most advanced on the path to liberal reform, and notably new EU members. By contrast, it has increased in the CIS. This last result is driven by the young and unemployed. Although individual exposure to the crisis is associated with lower average support to democracy and markets, it leads these segments of the population, which were most excluded from the political-economic system in place to demand more liberal reforms in countries with corrupt institutions and that lag behind in terms of economic and political reform. We rely on individual level, within-country variation and on the use of a large set of individual controls in order to identify the causal effect of the economic crisis on political attitudes.

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File URL: http://research.economics.unsw.edu.au/RePEc/papers/2011-16.pdf
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Bibliographic Info

Paper provided by School of Economics, The University of New South Wales in its series Discussion Papers with number 2011-16.

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Length: 34 pages
Date of creation: Dec 2011
Date of revision:
Handle: RePEc:swe:wpaper:2011-16

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Keywords: Crisis; cycles; corruption; learning; political preferences;

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References

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  1. Dani Rodrik, 1998. "Where Did All The Growth Go? External Shocks, Social Conflict, and Growth Collapses," NBER Working Papers 6350, National Bureau of Economic Research, Inc.
  2. Paolo Pinotti, 2012. "Trust, Regulation and Market Failures," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 650-658, August.
  3. Irena Grosfeld & Claudia Senik, 2008. "The Emerging Aversion to Inequality: Evidence from Poland 1992-2005," William Davidson Institute Working Papers Series wp919, William Davidson Institute at the University of Michigan.
  4. Alberto Alesina & Nichola Fuchs Schuendeln, 2005. "Good bye Lenin (or not?): The Effect of Communism on People's Preferences," NBER Working Papers 11700, National Bureau of Economic Research, Inc.
  5. Francisco J. Buera & Alexander Monge-Naranjo & Giorgio E. Primiceri, 2008. "Learning the Wealth of Nations," NBER Working Papers 14595, National Bureau of Economic Research, Inc.
  6. Raj M. Desai & Anders Olofsg�rd, 2006. "Political Constraints and Public Support for Market Reform," IMF Staff Papers, Palgrave Macmillan, vol. 53(si), pages 5.
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Cited by:
  1. Marc Sangnier & Yanos Zylberberg, 2013. "Protests and Beliefs in Social Coordination in Africa," Working Papers halshs-00822377, HAL.
  2. Afandi, Elvin & Habibov, Nazim, 2013. "Pre-Crisis and Post-Crisis Trust in Banks: Lessons from Transitional Countries," MPRA Paper 46999, University Library of Munich, Germany.

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