Does Culture Affect Electoral Outcomes? Evidence From Transition Countries

Abstract

Why do some societies fail to adopt "good" economic institutions? Recent literature points to the role of complementarities between social norms and proposed formal rules in advancing institutional change. To shed light on one potential mechanism, we track election performance of executive parties in up to 18 post-communist democracies over 1991-2015 to test whether cultural attitudes influenced voters' response to market reform. We show that in more individualistic cultures, reform is associated with greater reward for the incumbent in the next election. The implication is that in democracies, voters select policies and institutions that are in line with prevailing culture. (JEL O17, P35, Z1) [A] key characteristic of a democracy is the continuing responsiveness of the government to the preferences of its citizens, considered as political equals.-Robert Dahl (1971, 1) I. INTRODUCTION Why do some societies fail to adopt "goodfor-development" institutions? This question has been at the forefront of a vast literature on formal institutions-the codified "rules of the game" that govern human interaction (North 1991)-and comparative economic development. That institutions matter is welldocumented in numerous empirical studies highlighting the importance of property rights, rule of law, and good governance for economic prosperity (e.g., Acemoglu, Johnson, and Robinson 2001; North 1990; Rodrik, Subramanian, and Trebbi 2004). Building on this research, a growing literature has argued that the choice of modes of societal organization is ultimately dependent on the prevailing culture-a society's shared norms and values that constrain, proscribe, and justify different formal rules of the game (