Phocion
- Quote
- Posted: Sat, 16 Jan 2010 05:51:27 +0000
A study titled "Regulation and Distrust" has demonstrated that the more individuals distrust certain (usually large) institutions such as government and business, the more they demand regulation. Atlantic summary:
Here are some of the more relevant introductory paragraphs taken from the paper:
When it comes to distrust of business, it is little surprise that people clamor for regulation, but why would individuals who are distrustful of government desire more involvement by government?
Abstract.
What, if any, are the implications of this? Does this mean, if we discount the variations from country-to-country in this paper, that we should generally be wary of those who claim to have little faith in government?
Quote:
People living under the yoke of corrupt governments tend to want … more government regulation. It’s a vicious cycle: in trusting societies, people act civilly and expect less government interference. In distrustful societies, people act selfishly and expect tighter regulation. But more government corruption leads to less-trusting societies, and citizens will generally “prefer state control to unbridled production by uncivil firms”—even when they know their leaders are crooked.
Here are some of the more relevant introductory paragraphs taken from the paper:
Quote:
In a cross-section of countries, government regulation is strongly negatively correlated with social capital. We document, and try to explain, this highly significant empirical correlation. The correlation works for a range of measures of social capital, from trust in others to trust in corporations and political institutions, as well as for a range of measures of regulation, from product markets, to labor markets, to judicial procedures.
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The model predicts, most immediately, that distrust influences not just regulation itself, but the demand for regulation...distrust fuels support for government control over the economy. What is perhaps most interesting about this finding, and also consistent with the model's predictions, is that distrust generates demand for regulation even when people realize that the government is corrupt and ineffective; they prefer state control to unbridled production by uncivil firms.
...
The model predicts, most immediately, that distrust influences not just regulation itself, but the demand for regulation...distrust fuels support for government control over the economy. What is perhaps most interesting about this finding, and also consistent with the model's predictions, is that distrust generates demand for regulation even when people realize that the government is corrupt and ineffective; they prefer state control to unbridled production by uncivil firms.
When it comes to distrust of business, it is little surprise that people clamor for regulation, but why would individuals who are distrustful of government desire more involvement by government?
Abstract
In a cross-section of countries, government regulation is strongly negatively correlated with social capital. We document this correlation, and present a model explaining it. In the model, distrust creates public demand for regulation, while regulation in turn discourages social capital accumulation, leading to multiple equilibria. A key implication of the model is that individuals in low trust countries want more government intervention even though the government is corrupt. We test this and other implications of the model using country- and individual-level data on social capital and beliefs about government's role, as well as on changes in beliefs and in trust during the transition from socialism.
Abstract.
What, if any, are the implications of this? Does this mean, if we discount the variations from country-to-country in this paper, that we should generally be wary of those who claim to have little faith in government?