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Morality under Threat? Economic Hardship and Tolerance towards Dishonest Behaviour (Elodie Douarin)

|   Module 3: Trade and Institutions

This event is a cooperation between the seminar series at the IOS Economics Department and the ScienceCampus.

There is a growing literature linking economic shocks to changes in values and social norms. Here, we investigate the possibility that the 2008 economic crisis, largely perceived as the consequences of wrongdoings in the financial sector and to have been poorly handled by governments, has generated a shift in moral values. We are especially interested in stated tolerance towards dishonest behaviours (such as lying when selling second hand goods or inflating an insurance claim for example). Using data from a survey collected in 2010 (the EBRD LITS2 survey) in 35, mostly East European, countries, we report that respondents directly affected by the 2008 crisis, are systematically more accepting of dishonest behaviours. The effect is small but it is robust to specification change, Oster’s test on unobservable bias, and stronger when the dishonest behaviour described negatively impacts the state or businesses rather than citizens. Simultaneously, citizens who live in areas where the crisis has hit the hardest express a stronger rejection of dishonest behaviour. This effect is larger in magnitude, consistently found across all the behaviours investigated, and credibly causal, as it is confirmed by split-sample regressions. Overall, our finding suggests a tightening of moral values after the 2008 crisis, at least in the short-run.

Elodie Douarin is Associate Professor at the School of Slavonic and East European Studies at University College London (UCL). Her research interests include the non-economic consequences of economic change and the importance of values and culture in our understanding of economic outcomes.

When?  January 25 2022, 14:00 CET

Where?  online via Zoom:

This event is part of the seminar series at the Economics Department of IOS Regensburg. It is organized in cooperation with Research Module 3: Trade and Institutions at the Leibniz ScienceCampus "Europe and America", which is coordinated by Thomas Steger (UR) and Olga Popova (IOS). UCL is one of the ScienceCampus's international partners.