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The invisible hand meets the raised fist: Social movements and market legitimacy

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  • Shakya, Shishir
  • Ammons, Joshua D.

Abstract

We examine the long-run institutional and economic effects of successful one-time nonviolent campaigns. Using an event study on panel data (1950–2022) from the NAVCO and V-Dem datasets, we compare countries with successful one-time nonviolent campaigns to politically stable counterparts without any campaigns. This design plausibly mitigates concerns about selection bias, simultaneity, and timing endogeneity. Pre-treatment trends support the assumption of parallel trends. We find that nonviolent campaigns are associated with lasting improvements in liberal democracy, rule of law, civil liberties, and government accountability, alongside reduced state ownership of the economy. These results suggest that collective action can strengthen market-supporting institutions and reinforce the perceived legitimacy of liberal market systems.

Suggested Citation

  • Shakya, Shishir & Ammons, Joshua D., 2026. "The invisible hand meets the raised fist: Social movements and market legitimacy," Journal of Economic Behavior & Organization, Elsevier, vol. 241(C).
    • Handle: RePEc:eee:jeborg:v:241:y:2026:i:c:s0167268125005074
    DOI: 10.1016/j.jebo.2025.107390
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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