Attitudes, behavior, and institutional inversion: The case of debt.

Abstract

Psychologists often posit relatively straightforward attitude-behavior links. They also often study cultural arrangements as manifestations of attitudes and values writ large. However, we illustrate some difficulties with scaling up attitude-behavior principles from the individual-level to the cultural-level: Historical attitudes and values can lead to the creation of intermediating institutions, whose value-expressive functions may be at odds with the behavioral outcomes they produce. Through "institutional inversion," institutions may facilitate rather than inhibit stigmatized behavior. Here we examine attitudes and behavior related to debt, contrast historically Protestant versus Catholic places, and show how cultural attitudes against debt may lead to the creation of institutions that increase-rather than decrease-borrowing. Historical antidebt attitudes in Protestant places have led to contemporary households in Protestant cultures now carrying the highest debt loads. We discuss the importance of supply side factors, attitude ! institutions ! behavior causal chains, and some blind spots that lead to unintended consequences.

The Socioecological Psychology of Financial Debts: The Role of Residential Mobility

“…A. Sullivan et al, 2000; Williams, 2005). There is no question that willingness to borrow is determined by multiple factors: one’s desires for a particular lifestyle, one’s optimism about future earnings, one’s threshold for financial risk-taking, and ease of obtaining a loan (see also Cohen et al, 2021 for religious–cultural factors). The present research points to other unusual suspects: Distal ecological factors such as residential mobility and a few psychological mechanisms such as indebtedness and gratitude could play an important role in people’s willingness to borrow to achieve the lifestyle of their choice.…”

Institutional Inversion and “Demand-Side” Versus “Supply-Side” Views of Culture

“…Internationally, this same trust gap holds. Within developed Western countries, slightly over half of respondents in historically Protestant countries had confidence in the banks, compared with slightly over one-third in historically Catholic countries (Cohen et al, 2021).…”

“…On a widely used attitudes-toward-debt scale, Protestants were also more antidebt (“I do not like borrowing money”) than Catholics were in a convenience sample. And in a probability sample, among those who believed a person had the right to end his or her life for various reasons, those from liberal and moderate (but not fundamentalist) Protestant denominations were more likely than Catholics to say that bankruptcy was an acceptable occasion for doing so (Cohen et al, 2022).…”

“…We created an index of policies reflecting interest rate caps, protections for homeowners behind on their mortgage, debtors’ rights, and the proportion of bankruptcy cases filed under chapters that are more (vs. less) favorable to the debtor. The index alone explains about half to two-thirds of the correlation between percentage Protestants in a state and residents’ overindebtedness (Cohen et al, 2021).…”

“…Regardless of how laws were described, respondents’ predictions were overwhelmingly demand-side focused, driven by how laws would affect the desires of individuals to borrow rather than supply-side considerations of how much lenders would be willing to lend (Figure 3; Cohen et al, 2021). The tendency was not inevitable, however.…”