Working Paper: CEPR ID: DP5922
Authors: Alberto Chong; Mark Gradstein
Abstract: To what extent do imposed institutions shape preferences? We consider this issue by comparing the market-versus-state attitudes of respondents from a capitalist country, Finland, and an ex-communist group of Baltic countries, and arguing that the period under the communist rule can be viewed as an ?experiment? in institutional imposition. We find, consistent with some earlier related work, that citizens from ex-communist countries tend to be more supportive of state ownership than respondents from capitalist economies. However, they also favour increasing inequality and competition as the means to enhance incentives. Our conclusion is that, in some important relevant dimensions, institutional imposition (that lasted for about fifty years) had a limited effect on preferences.
Keywords: institutions; markets versus state; redistributional preferences
JEL Codes: D02; D30; I31; P30; P51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Institutional imposition during the Soviet era (P39) | Stronger preference for state ownership (P26) |
| Stronger preference for state ownership (P26) | Support for government ownership (H13) |
| Stronger preference for state ownership (P26) | Acceptance of greater income inequality and competition (F61) |
| Trust and confidence in government (H12) | Pro-capitalist attitudes (P12) |
| Institutional imposition (D02) | Stability in preferences for state ownership (P26) |