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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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  1. 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.
  2. Stevenson, Betsey & Wolfers, Justin, 2011. "Trust in Public Institutions over the Business Cycle," IZA Discussion Papers 5570, Institute for the Study of Labor (IZA).
  3. Philippe Aghion & Yann Algan & Pierre Cahuc & Andrei Shleifer, 2010. "Regulation and Distrust," The Quarterly Journal of Economics, MIT Press, vol. 125(3), pages 1015-1049, August.
  4. Rodrik, Dani, 1999. " Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses," Journal of Economic Growth, Springer, vol. 4(4), pages 385-412, December.
  5. Grosfeld, Irena & Senik, Claudia, 2008. "The Emerging Aversion to Inequality. Evidence from Poland 1992-2005," CEPREMAP Working Papers (Docweb) 0805, CEPREMAP.
  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.
  7. Augustin Landier & David Thesmar & Mathias Thoenig, 2008. "Investigating capitalism aversion," Economic Policy, CEPR & CES & MSH, vol. 23, pages 465-497, 07.
  8. Paolo Pinotti, 2012. "Trust, Regulation and Market Failures," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 650-658, August.
  9. Buera, Francisco & Monge-Naranjo, Alexander & Primiceri, Giorgio E., 2010. "Learning the Wealth of Nations," CEPR Discussion Papers 8030, C.E.P.R. Discussion Papers.
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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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