Summary of JOIE article ( First View 04 February 2021) by Chiara Amini, School of Slavonic and East European Studies, University College London, Elodie Douarin, School of Slavonic and East European Studies, University College London and Tim Hinks, University of West of England. The full article is available on the JOIE website.
Even though individualism has been extensively studied and its relationship to economic development and good governance at the macro level is well established (Gorodnichenko and Roland, 2011, Kyriacou, 2016 and Licht et al., 2007), it still remains an under-studied concept at the micro-level. Can we shed some light on the micro-level links through which individualism might support better institutions and development? This is what we propose to do in this paper.
Specifically, focusing on a sample of 27 post-communist countries in Eastern Europe and Central Asia, and using within country regressions to analyse individual responses, we show that individualism is associated with a greater willingness to report corruption, and values more supportive of reporting corrupt practices more generally. This association is also stronger among individuals who trust state institutions more.
Importantly, we concentrate on a very specific definition of “individualism”, which is neither the selfishness emphasised by economists, nor the “rugged individualism” sometimes used to described specific competitive communities. Instead, we use the concept of individualism, as defined by Hofstede (1991, 2001), a cultural psychologist who was interested in identifying key cultural values that differ across societies and could explain differences in behaviours. In Hofstede’s definition, individualism is characterised by a focus on personal freedom and achievement, with prestige being derived from personal success. It is also about independence and self-responsibility, as opposed to social embeddedness. In other words, an individualistic individual is not necessarily selfish, but they set their own goals, take responsibility for their actions, and they do not value very much conformity with the rest of their social group.
We focus on post-communist countries, because they are a particularly interesting case-study. Their communist past means that individualism may only be emerging in the region. They are known to be low trust countries, where collective action and cooperation with the state may be more difficult (Denisova, et al. 2010). Finally, they have persistently high levels of perceived corruption: according to transparency international Eastern Europe and Central Asia is right behind Sub-Saharan Africa in terms of perceived corruption.
Our analysis is based on the third round of the Life in Transition Survey (LITS3), which was fielded between 2015 and 2016 by the World Bank and the European Bank for Reconstruction and Development. In each country, a representative sample of 1,500 households was selected based on clustered sampling stratified by geographical region and level of urbanity. The primary respondent was selected randomly from all eligible respondents in the household, and the survey questionnaire included a rich section on attitudes towards corruption. We also construct our own measure of individualism from the survey data, adapting the methodology suggested by Beugelsdijk et al. (2015). Our results are derived from regression analyses, focusing on direct effects first and then including interaction terms to assess the interplay between individualism and institutional trust. We present results for several variables capturing attitudes and willingness to report corruption and discuss the robustness of our findings to changes in specification.
Given this definition and context, we have thus identified one possible micro-level mechanism linking individualism to better institutional quality, as we document a robust correlation between support for corruption reporting and individualism. This evidence is novel, because individualism has not been studied extensively at the micro level, but also because the willingness to report corruption is very rarely studied. Most of the extent literature on attitudes towards corruption focuses simply on the extend to which people think corruption is acceptable. Information on willingness to report acts of corruption or to act against corruption more generally appears to rarely be collected. However, support for corruption is often low: even in high incidence countries, people tend to report that corruption is unacceptable. This common view however is not sufficient for people to reject corruption in their day-to-day interactions (Rothstein, 2018).
In our paper, we in fact report relatively low levels of willingness to report corruption. For example, in all the countries covered in our analysis, about half of the respondent would be willing to report corruption (agree or strongly agree responses) if it means testifying in court. Interestingly, this average share is also fairly uncorrelated with country level governance. In countries with objectively better institutional quality, citizens are not significantly more supportive of acting against corruption. At the micro-level however, individuals who report a greater relative level of institutional trust are also more likely to support acting against corruption. In fact, we also find evidence that institutional trust amplifies the positive correlation between individualism and support for acting against corruption.
Overall, our findings suggest that individualism might contribute to challenging persistent corruption, as it is associated with greater willingness to act against corruption. A key policy-relevant implication of our analysis is that anti-corruption measures are more likely to be effective where individualistic values are widespread, and where there is some degree of institutional trust. Our findings also seem particularly important in the context of bottom-up approaches that rely on active participation of citizens to tackle corruption.
 Namely: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Estonia, North Macedonia, Georgia, Hungary, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Moldova, Mongolia, Montenegro, Poland, Romania, Russia, Serbia, Slovak Republic, Slovenia, Tajikistan, Ukraine and Uzbekistan.
Beugelsdijk, S., Maseland, R. and van Hoorn, A. (2015), ‘Are Scores on Hofstede’s Dimensions Stable Over Time?’, Global Strategy Journal, 5(3): 223–240.
Denisova, I., Eller, M. and Zhuravskaya, E. (2010), ‘What do Russians Think About Transition?’, Economics of Transition, 18(2): 249–280.
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