DP5922 | Imposed Institutions and Preferences for Redistribution

Publication Date

29/10/2006

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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.