Working Paper: CEPR ID: DP7492
Authors: Irina Denisova; Markus Eller; Ekaterina Zhuravskaya
Abstract: We use data from the 2006 round of the Russian Longitudinal Monitoring Survey (RLMS) to describe perceptions of the Russian population about the transition process and the role of the state compared to that of free markets. We find that about one half of Russian population is disappointed with transition and a large majority is in favor of high state regulation and state provision of goods and services. High demand for government regulation and increased state intervention coexists with a low level of trust in government institutions and recognition of high and rising levels of corruption. The findings are consistent with the theory developed by Aghion et al. (2009). In an environment with poor social capital, private business imposes negative externalities on the society and society chooses to demand more state regulation and tolerate corruption in order to reduce these externalities. We also find that individual perceptions of social capital and corruption co-vary with the demand for regulation, as predicted by the theory.
Keywords: perceptions; regulation; Russia; transition; trust
JEL Codes: P20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| lower social capital (Z13) | higher demand for regulation (G18) |
| individual distrust in government (D73) | higher demand for regulation (G18) |
| negative perceptions of transition (P27) | higher demand for regulation (G18) |
| individual perceptions of social capital (Z13) | demand for regulation (G18) |
| individual perceptions of corruption (D73) | demand for regulation (G18) |