Culture and trust in institutions

This post showcases an interesting, rather contrived way in which institutions can affect culture. Suppose a person moves from a country with bad institutions to a country with good ones. This person was raised on bad institutions. How will she then react to this new situation that institutions are relatively good/inclusive?

There are two possibilities: either (i) she will transmit her attitudes towards institutions from the origin country and be distrustful, or (ii) she will have great expectations from the new institutions and will tend to overtrust them. Which one of these prevails?

This topic is discussed in a recent working paper by Litina (2014). The main idea behind the paper is conveyed via a simple model in which agents have a certain level of disutility from having bad institutions. The model makes three key predictions for immigrants that come from a source country whose institutional quality is worse than the destination country’s.

First, the model predicts that two things affect the attitudes of immigrants toward host country institutions:

  1. Source country institutions: the lower the institutional quality in the source country is, the higher the trust of the immigrant towards host country institutions is.
  2. Source country attitudes (on trust in institutions): the lower the distrust of institutions in the source country, the higher the trust of the immigrant is towards host country institutions.

Second, the model also predicts that immigrants from countries with worse institutions participate less in political activities aimed at improving institutional quality (e.g. signing petitions).

Finally, under certain assumptions the extended version of the model also predicts that these attitudes will be transmitted across generations. This means that we should see these effect for second-generation immigrants as well.

To test the first hypothesis, the author checks whether the quality of origin country institutions can explain trust in destination country institutions for immigrants who moved to Europe from all over the world. Various demographic and country-level controls are employed. It is found that indeed source country institutional quality negatively affects trust in host country institutions. I.e. immigrants from countries with very poor institutions trust host country institutions more than immigrants from countries with somewhat better institutions.

Similarly, the second part of the first hypothesis is also checked. Unfortunately, data on attitudes towards trust in institutions are only available for European countries, therefore only intra-European migration is considered for this exercise. The main result after trying to explain trust in host institutions by both origin institutional quality and attitudes towards trust is that origin institutional quality prevails. This means that the second part of the first hypothesis is not supported by the data.

To test the second hypothesis, the author examines whether the quality of origin country institutions can explain an immigrant’s demand for regulation or participation in politics. Indeed, it is found that immigrants from countries with poorer institutional quality are less involved in politics in the host country.

The third hypothesis checks out as well. The above results hold for second-generation immigrants, so attitudes towards trust are indeed intergenerationally transmitted to a certain extent.

A concern may be that immigrants self-select into countries that they perceive as having good institutional quality. And that it is this selection that drives the results. This issue is addressed partially by showing that the results also hold for second-generation immigrants (who did not choose their countries of birth/residence). It is further addressed by restricting the attention to particular host countries only and comparing immigrant groups within them.

For instance, if one compares immigrant groups only within one country (say Sweden), then one can expect that immigrants from countries with poorer institutions (such as Greece) trust Swedish institutions more than say German immigrants. And this is indeed the case. So the results are unlikely to be driven by selection.

A final thing to note is that the above results relate to trust in institutions. Similar effects cannot be seen when it comes to interpersonal trust. In particular, interpersonal trust is lower for immigrants from countries with poorer institutional quality, and interpersonal trust is also lower if mean attitudes towards interpersonal trust are worse in the origin country. Thus both effects are exactly the opposite of what happens with trust in institutions.

To sum up, it has been shown that immigrants display a Great Expectations effect. That is, they tend to trust in their destination country’s institutions much more if they come from countries with poorer institutions. Mean attitudes towards institutional trust in their home countries don’t seem to matter much, however. Attitudes towards trust are also intergenerationally transmitted to the immigrants’ children. Finally, immigrants from countries with bad institutions also tend to participate less in politics.

Thus once again we have a nice example on our hand on how institutions can affect culture. In this case, the institutions you were sort of raised with will affect your attitudes on trust towards institutions even after emigration, and in a rather unexpected direction.

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