How populist democracy promotes market liberalization

Using a new set of micro evidence from an original survey of 28 transition countries, we show that democracy increases citizens' support for the market by guaranteeing income redistribution to inequality-averse agents. Our identification strategy relies on the restriction of the sample to inhabitants of open borders between formerly integrated countries, where people face the same level of market development and economic inequality, as well as the same historically inherited politico-economic culture. Democratic rights increase popular support for the market. This is true, in particular, of inequality-averse agents, provided that they trust political institutions. Our findings suggest that one solution to the recent electoral backlash of reformist parties in the former socialist block lies in a deepening of democracy.democracy ; income inequality ; redistribution ; market liberalization ; trust

Should market liberalization precede democracy? Causal relations between political preferences and development

This paper is dedicated to the relation between market development and democracy. We distinguish contexts and preferences and ask whether it is true that the demand for democracy only emerges after a certain degree of market development is reached, and whether, conversely, democratization is likely to be an obstacle to the acceptation of market liberalization. Our study hinges on a new survey rich in attitudinal variables: the Life in Transition Survey (LITS) conducted in 2006 by the European Bank for Reconstruction and Development and the World Bank, in 28 post-Transition countries. Our identification strategy consists in relying on the specific situation of frontier-zones. We find that democracy enhances the support for market development whereas the reverse is not true. Hence, the relativist argument according to which the preference for democracy is an endogenous by-product of market development is not supported by our data.market and democracy ; sequencing of development ; transition economies ; attitudinal variables ; cross-countries survey

Democracy, Market Liberalization and Political Preferences

This paper questions the conventional wisdom concerning the sequencing of political and economic reforms in developing countries. We exploit the specific situation of frontier-zones as well as the considerable regional variations in culture and economic development in the countries of Central and Eastern Europe and the former Soviet Union. We estimate the impact of market development and democratization on subjective political preferences. Taking advantage of a new survey conducted in 2006 by the European Bank for Reconstruction and Development and the World Bank in 28 post-transition countries, we find a positive and significant effect of democracy on support for a market economy, but no effect of market liberalization on support for democracy. Our results are robust to the use of various indices of market liberalization and democracy and alternative measures of political preferences.market and democracy ; political preferences ; spatial regression discontinuity ; transition economies

Why Populist Democracy Promotes Market Liberalization

Using a new set of micro evidence from an original survey of 28 transition countries, we show that democracy increases citizens’ support for the market by guaranteeing income redistribution to inequality-averse agents. Our identification strategy relies on the restriction of the sample to inhabitants of open borders between formerly integrated countries, where people face the same level of market development and economic inequality, as well as the same historically inherited politico-economic culture. Democratic rights increase popular support for the market. This is true, in particular, of inequality-averse agents, provided that they trust political institutions. Our findings suggest that one solution to the recent electoral backlash of reformist parties in the former socialist block lies in a deepening of democracy.democracy, income inequality, redistribution, market liberalization, trust

A History of Violence: Testing the ‘Culture of Honor’ in the US South

Using historical data on early settlers to the United States, this paper tests and confirms the “Culture of Honor” hypothesis by socio-psychologists Dov Cohen and Richard Nisbett (1994, 1996). This hypothesis argues that the high prevalence of homicides in the US South stems from the fact that it was a frontier region settled by people whose economy was based on herding: the Scotch-Irish. Herding societies develop cultures of honors for reasons having to do with their precariousness: violence is a necessary condition to preserve a reputation for toughness and deter animal theft. Using historical census data on waves of settlers from Europe and relating contemporaneous violence to early Scotch-Irish settlers, this paper provides a test of the link between Scotch-Irish settlers and the culture of honor. The results confirm that high numbers of Scotch-Irish immigrants to the US South by 1790 are associated with higher homicide rates today, including homicides by white offenders. Similar results do not hold for different origins of migrants or other violent crime or offenses. The effect is stronger in counties with high headcounts of pigs and sheep in the 19th century, confirming the herding origin of the culture of honor. An important contribution of this paper is to suggests an instrument for violence, based on past economic occupations and ecological suitability for herding vs. farming.Cuture of honor, US South

Why populist democracy promotes market liberalization

Using a new set of micro evidence from an original survey of 28 transition countries, we show that democracy increases citizens' support for the market by guaranteeing income redistribution to inequality-averse agents. Our identification strategy relies on the restriction of the sample to inhabitants of open borders between formerly integrated countries, where people face the same level of market development and economic inequality, as well as the same historically inherited politico-economic culture. Democratic rights increase popular support for the market. This is true, in particular, of inequality-averse agents, provided that they trust political institutions. Our findings suggest that one solution to the recent electoral backlash of reformist parties in the former socialist block lies in a deepening of democracy

Should market liberalization precede democracy? Causal relations between political preferences and development

This paper is dedicated to the relation between market development and democracy. We distinguish contexts and preferences and ask whether it is true that the demand for democracy only emerges after a certain degree of market development is reached, and whether, conversely, democratization is likely to be an obstacle to the acceptation of market liberalization. Our study hinges on a new survey rich in attitudinal variables: the Life in Transition Survey (LITS) conducted in 2006 by the European Bank for Reconstruction and Development and the World Bank, in 28 post-Transition countries. Our identification strategy consists in relying on the specific situation of frontier-zones. We find that democracy enhances the support for market development whereas the reverse is not true. Hence, the relativist argument according to which the preference for democracy is an endogenous by-product of market development is not supported by our data.Cet article tente de discerner des relations de causalité entre démocratie et marché en distinguant contexte et préférences. Il s'agit de savoir si le développement du marché favorise le soutien à la démocratie et, inversement, si le développement de la démocratie est propice à l'adhésion des citoyens au marché. Ce travail s'appuie sur une nouvelle enquête, Life in Transition Survey, conduite en 2006 par la BERD dans 26 pays en transition. Notre stratégie d'identification repose sur l'exploitation de la situation particulière des zones-frontalières présentes au sein de l'enquête. Nos résultats suggèrent que la démocratie est favorable à la demande de marché tandis que le développement du marché ne conduit pas è une plus forte demande de démocratie. L'argument relativiste selon lequel la préférence pour la démocratie est un effet endogène du développement économique n'est donc pas validé par nos données

How populist democracy promotes market liberalization

Using a new set of micro evidence from an original survey of 28 transition countries, we show that democracy increases citizens' support for the market by guaranteeing income redistribution to inequality-averse agents. Our identification strategy relies on the restriction of the sample to inhabitants of open borders between formerly integrated countries, where people face the same level of market development and economic inequality, as well as the same historically inherited politico-economic culture. Democratic rights increase popular support for the market. This is true, in particular, of inequality-averse agents, provided that they trust political institutions. Our findings suggest that one solution to the recent electoral backlash of reformist parties in the former socialist block lies in a deepening of democracy.A l'aide d'une enquête récente couvrant 28 pays anciennement socialistes, nous mettons en évidence une relation de causalité entre démocratie et adhésion au marché. Notre stratégie d'identification repose sur la restriction de l'échantillon aux habitants des zones-frontières intégrées. Ces derniers partagent en effet le même héritage historique en termes de valeurs et d'attitudes vis-à-vis du marché et de la démocratie, ainsi que la même expérience concrète du marché. Le mécanisme proposé repose sur le fait que les agents, hostiles à l'inégalité engendrée par la transition vers le marché, acceptent l'approfondissement des réformes à condition de pouvoir compter sur le gouvernement pour corriger en partie les inégalités de revenus. La démocratie joue ici le rô le d'un mécanisme d'engagement de l'Etat en faveur d'une intervention sur la répartition des revenus. Cependant, la démocratie formelle n'est pas suffisante pour garantir la crédibilité du gouvernement aux yeux de ces agents. La qualité des institutions, mesurée par la confiance des agents dans le gouvernement, est une condition nécessaire à leur adhésion au marché

Institutional quality, culture, and norms of cooperation: Evidence from behavioral field experiments

We examine the causal effect of legal institutional quality on informal norms of cooperation and study the interaction of institutions and culture in sustaining economic exchange. A total of 346 subjects in Italy and Kosovo played a market game under different and randomly allocated institutional treatments, which generated different incentives to behave honestly, preceded and followed by a noncontractible and nonenforceable trust game. Significant increases in individual trust and trustworthiness followed exposure to better institutions. A 1- percentage-point reduction in the probability of facing a dishonest partner in the market game, which is induced by the quality of legal institutions, increases trust by 7–11 percent and trustworthiness by 13–19 percent. This suggests that moral norms of cooperative behavior can follow improvements in formal institutional quality. Cultural origin, initial trust, and trustworthiness influence opportunistic behavior in markets, but only in the absence of strong formal institutions

Black drivers were more likely to be stopped by police after Trump rallies in 2016

In new research, Pauline Grosjean, Federico Masera, and Hasin Yousaf look into how Trump’s 2016 presidential campaign affected police behavior toward Black Americans. They find that that Black drivers were 5.7 percent more likely to be stopped by police after a Trump rally, and that this effect happens immediately after the rally, is specific to Black drivers, lasts for up to 60 days and is not justified by changes in driver behavior