Report from the Symposium "Cultures of Trust and Institutions of Freedom"
At the end of November 2023, 14 scholars from different disciplines and countries came together in the Old Town of Stockholm to present and discuss commissioned, new papers on institutions and culture. What characterized most research questions was a desire to find out more about how legal, political and economic rules and cultural norms influence how humans behave and the way societies function.
As part of the research project Cultures of Trust and Institutions of Freedom, IFN was happy to welcome international researchers – all of them experts on topics relating to institutions and culture – to Stockholm for a symposium, 30 November–3 December 2023, featuring a two-day academic program. The web page of the workshop, which includes the participants and program, can be accessed here.
The research project is generously financed by grant 62065 from the John Templeton Foundation. The organizers of the workshop, Niclas Berggren (IFN and VŠE) and Christian Bjørnskov (Aarhus University and IFN), are also the investigators of the project, which aims at analyzing how institutions of economic freedom can contribute to a society of free, responsible and equal individuals, and how cultures of trust can emerge and grow.
Christian Bjørnskov (co-organizer)
The participating researchers had been commissioned (in most cases with non-attending co-authors) to write papers on the basis of an open call for papers in 2022. 12 proposals were selected out of a pool of 51 submissions. The researchers thus participated by personal invitation from Berggren and Bjørnskov and presented their commissioned papers on issues relating to the topic of the project.
This report offers a summary of the talks of the workshop, in the alphabetical order of the presenters, to share the insights of the new research that was presented to anyone interested in institutions and culture. Note that all presentations were preliminary and that the underlying work is subject to revision. If there is an interest in some paper, we recommend getting in touch with the presenting author to get the latest version. Finally, note that the opinions expressed are those of the authors and do not necessarily reflect the views of the John Templeton Foundation.
Back row (from the left): André van Hoorn, Martin Ljunge, Jonathan Beauchamp, Christian Bjørnskov (co-organizer), Niclas Berggren (co-organizer), Jan Mewes. Middle row (from the left): Justin Callais, Andreas Bergh, Joop Adema, Daniel Rubenson, Ewa Atanassow, Štěpán Mikula. Front row (from the left): Anna Minasyan, Roee Sarel.
Trust in institutions in an ongoing conflict
Joop Adema
Prior to the Russian invasion of Ukraine in 2022, the institutional trust of Ukrainians was very low, combined with a widespread perception of corruption. However, following the invasion, Ukrainians’ trust in institutions surged. This study explores the determinants of this rise in institutional trust using survey data before and after the invasion, with participants inside and outside Ukraine. The authors combine this with detailed geographical data on the ongoing conflict and the ethnic composition of regions. Their findings suggest that institutional trust increased (decreased) among Ukrainians living in regions that were temporarily (potentially irreversibly) occupied by Russia.
First Person Plural?
Ewa Atanassow
Since the 1960s, trust in political institutions has declined in Western countries. This negative trend has been described as “the crisis of liberal democracy”. What needs to be in place for liberal democracies to be sustained? This paper draws upon the work of Fukuyama and Ringen and tries to answer under what conditions economic freedom fosters a free democratic society and cultures of trust. A common criticism of liberal democracy is that it downplays the role of cultural values and sense of belonging in society. Atanassow’s main claim is that political democratic institutions depend on broad-level social trust, which in turn depends on more “basic” values, such as cultural foundations, collective self-understanding, and a shared sense of who we are.
Kin-based institutions and economic development
Jonathan Beauchamp
Kin-based institutions, i.e., the social norms governing descent, kinship, marriage, residence, etc., differ and have evolved differently around the world. This study explores the relation between economic prosperity and kinship intensity around the world. To do this, they employ data based on anthropological studies on 1,291 ethnicities prior to the industrialization or European colonization. As for economic prosperity, the authors use two measures: per capita regional GDP and satellite nighttime luminosity. They find a robustly negative relation between economic prosperity and kinship intensity.
Does capitalism disfavor women? Evidence from life satisfaction
Niclas Berggren
Some feminists are highly critical of capitalism and argue that women are disfavored in the market economy. However, there are also arguments as to why capitalism could favor women when compared to alternative systems. This study looks at whether economic freedom is related to life satisfaction and whether there is a gender gap in this association. The authors find a positive association between overall economic freedom and life satisfaction without any statistically significant differences between men and women, suggesting that women are not disfavored by capitalism, at least not in terms of life satisfaction.
Market friendliness and social trust: Evidence from Sweden
Andreas Bergh
What explains human prosperity? The most common answer to this question in popular science is cooperation. Humans can communicate issues and mobilize resources through cooperation. Yet, the market economy is often criticized by so-called “market-bashing elites” for causing the opposite, such as greed and egoism. The starting point of this study is the absence of research on the support for markets and economic cooperation. To study this, the authors use Swedish survey data and find a positive relation between a market-friendly attitude and income, age, and social trust. However, the correlation with education is negative, suggesting that the well-educated are less convinced that the market economy is a form of cooperation.
Discrimination and market institutions
Christian Bjørnskov
While many economists have argued that free markets make discrimination costly to private employers, only a tiny literature has studied what explains government discrimination, and it has mainly focused on the role of anti-discrimination legislation. This paper explores the relationship between economic freedom and government discrimination using country-level data. The findings indicate a negative association between the rule of law (a key aspect of a market-based order) and government discrimination. The effect is strongest in democracies and does not apply to single-party autocracies.
Underperforming reformers: Examining disappointing cases of economic reforms
Justin Callais
Countries with strong and stable institutions tend to foster a good economic environment. Yet, exporting institutions has proven to be difficult, at least in making them persist. This paper explores whether there are commonalities that can predict the outcome of economic reforms and hypothesizes that culture, inequality, and corruption will determine the likelihood of successful reforms. Using country-level data, the authors compare failed reforms to successful reforms and find that trust and individualism have an impact on the likelihood of successful reforms in countries.
Immigrants, neighborhoods, and the stock market
Martin Ljunge
The stock market is important for retirement wealth. Buying into the stock market can also induce a sense of inclusion in the ever-changing market economy. Yet, Swedish immigrants hold stocks at half the rate of natives. Earlier research suggests that trust, as well as cultural and information barriers, are important for financial participation. The authors test these factors using Swedish registry data. Their main findings suggest that immigrants in high-native share neighborhoods, as well as immigrants originating from high-trust countries, are more financially integrated than others.
The radius of trust, social trust and economic growth
Jan Mewes
Social trust, commonly interpreted as the belief that “most people” can be trusted, is frequently described as the most important part of social capital and is linked to economic performance. However, the definition of “social trust” is plagued with a radius problem, since the circle of people that are seen as “most other people” differs substantially between countries. This study uses trust in outgroups divided by trust in ingroups as the measure of the radius of trust and finds a relation with economic growth.
The long-term impact of religion on social capital: Lessons from post-war Czechoslovakia
Štěpán Mikula
Democracy and freedom of expression are preconditions for a vibrant civil society that supports the accumulation of social capital. Earlier research suggests that more authoritarian societies in which social participation is discouraged may lead to, for example, lower trust, civic engagement, and voter turnout. The evidence for church-related activities on social capital is, however, mixed. To study the role of church activity on social capital, the authors exploit the expulsion of Germans and the resettlement of Czechs in the Sudetenland after the Second World War. This replacement of inhabitants entirely reset the social structure of affected municipalities and caused social capital to plummet. To measure the effect of replacement on social capital, they use the density of civic organizations in 1990–2007 and compare communities with a high replacement rate to those without replacement. The authors find that municipalities hosting a church have a higher density of non-church civic organizations, suggesting that the church activities contributed to the accumulation of social capital.
Conflict, trust and political preference
Anna Minasyan
Shocks to political institutions, such as coups or wars, can have dramatic consequences on political trust. The earlier literature suggests that the effect of political shocks on trust depends on the type of shock: internal conflicts typically lower political trust, while external shocks foster it. In recent years, Armenia has experienced both types of political shocks. In 2018, peaceful demonstrations led to political change, and then in 2020, conflict broke out between Armenia and Azerbaijan over the contested territory of Karabakh, which ended with Armenia being forced to give up territory. The authors use spatial variation in the exposure to these two political shocks to examine the persistence and size effects on trust. Their main findings show that exposure to the revolution is associated with a higher level of trust. However, high exposure to both the revolution and subsequent war was linked with a large loss in trust relative to no exposure.
Property rights and prosociality
Daniel Rubenson
Strong and stable institutions are central to economic performance and welfare. One such institution is property rights and a large body of literature documents a positive association between property rights, and economic outcomes such as economic growth, trade, capital formation, etc. The authors study the effects of secured property rights on trust in a unique field experiment taking place in Mongolia where semi-nomadic herders were randomly given land-property rights. The result indicates that property rights had a significant positive effect on generalized trust relative to non-treated. However, the increase in trust was only temporary.
Measuring constitutional loyalty: Evidence from the COVID-19 pandemic
Roee Sarel
Establishing trust in institutions is essential for governments to effectively execute policies. Furthermore, it is vital that these policies align with the constitution. Constitutional loyalty refers to the significance citizens attribute to their constitutional laws. When citizens hold their constitution in high regard, they are less inclined to endorse policies that they believe go against it. However, constitutional loyalty is difficult to measure since all countries have different contexts, histories, and cultures. The authors study constitutional loyalty by taking advantage of the COVID-19 pandemic, which affected most countries and led governments to conduct similar policies. Using an online survey carried out in 53 countries the authors show that individual support for public health policies is affected by courts’ signals of their constitutional feasibility. Furthermore, constitutional loyalty, in turn, depends on citizens' confidence in their country’s courts and personal moral convictions.
Are managers becoming less trusting?
Andre van Hoorn
Trust is needed at all levels of society for it to develop and prosper, and this goes for the business sector as well. Trust is critical for productive intra-organization exchange; without it, transaction costs increase, and productivity losses follow. However, popular belief is that managerial trust has been declining. Using data from a culturally and institutionally diverse set of countries, van Hoorn finds that younger-generation managers are significantly more distrustful than non-managers, and the gap is even larger for other prosocial attitudes. van Hoorn goes on to theorize whether this is a change in the selection of managers or cohort effects.
Final Words
The dynamic, intense, and constructive nature of this symposium cannot easily be captured by a written summary. It not only featured the scholarly part, with presentations and the generous giving of advice, but also a social part, which deepened relations between the attending scholars – during coffee breaks breakfasts, lunches and dinners. Still, we hope this summary gives a hint of what happened during these winter days in Stockholm. Do feel free to contact any of the participants to learn more about their research.
Ewa Atanassow and co-organizers Niclas Berggren and Christian Bjørnskov during a coffee break
We thank the John Templeton Foundation for its financial support; all participants for giving of their time and talent; Gustav Häggbom for writing most of this summary; and Elisabeth Gustafsson for administrative assistance of the most competent kind.
Niclas Berggren and Christian Bjørnskov, co-organizers
Stockholm and Aarhus, 14 January, 2024