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Learning, political attitudes and the crisis in transition countries

  • Pauline Grosjean

    (Australian School of Business at the University of New South Wales)

  • Frantisek Ricka

    ()

  • Claudia Senik

    (University of Paris-Sorbonne)

We study how the recent economic crisis has reshaped support for democracy and the market economy in 30 transition 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 furthest along the reform path, and notably new EU members. In contrast, such support has increased in the CIS, driven by the young and unemployed. Although individual exposure to the crisis is associated with lower-than-average support for 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 lagging reforms. We rely on individual level, within-country variation and on the use of many individual controls to identify the causal effect of the crisis on attitudes.

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Paper provided by European Bank for Reconstruction and Development, Office of the Chief Economist in its series Working Papers with number 140.

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Length: 36 pages
Date of creation: Dec 2011
Date of revision:
Publication status: Published in Working papers 140, European Bank for Reconstruction and Development
Handle: RePEc:ebd:wpaper:140
Contact details of provider: Postal: One Exchange Square, London EC2A 2JN
Web page: http://www.ebrd.com/pages/research/publications/workingpapers.shtml

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  1. Irena Grosfeld & Claudia Senik, 2008. "The Emerging Aversion to Inequality: Evidence from Poland 1992-2005," CASE Network Studies and Analyses 0360, CASE-Center for Social and Economic Research.
  2. 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.
  3. Stevenson, Betsey & Wolfers, Justin, 2011. "Trust in Public Institutions over the Business Cycle," CEPR Discussion Papers 8308, C.E.P.R. Discussion Papers.
  4. 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.
  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.
  7. Augustin Landier & David Thesmar & Mathias Thoenig, 2008. "Investigating capitalism aversion," Economic Policy, CEPR;CES;MSH, vol. 23, pages 465-497, 07.
  8. Alberto Alesina & Nicola Fuchs-Schundeln, 2005. "Good bye Lenin (or not?): The effect of Communism on people's preferences," Harvard Institute of Economic Research Working Papers 2076, Harvard - Institute of Economic Research.
  9. Paolo Pinotti, 2012. "Trust, Regulation and Market Failures," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 650-658, August.
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