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Beliefs, Economic Volatility, and Redistributive Preferences Across Developing Countries

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Abstract

Beliefs about social competition affect redistributive demands and the responsibility assigned to government regarding public provisions. Given the strong link between beliefs and the extent of support for social protection, it is important to explain the cross-country differences. The paper analyzes the factors that are crucial in explaining redistributive demands across developing countries with a special emphasis on beliefs about social competition. While ideas about luck versus effort in determining economic prospects are explanatory in every country, our findings also suggest that in societies with high economic volatility the role of beliefs is amplified. Vast fluctuations in economic performance fuel the opinion that economic failure is a result of systemic characteristics, and individuals are not necessarily held fully responsible for their material faiths in such settings. Therefore, government is assigned a greater role in basic provisioning.

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