Morality under threat? Economic hardship and tolerance towards dishonest behaviour

Ein Vortrag von Elodie Douarin (UCL School of Slavonic and East European Studies) im Rahmen der Seminarreihe des AB Ökonomie am IOS.

There is a growing literature linking economic shocks to changes in values and social norms. Here, we investigate the possibility that the 2008 economic crisis, largely perceived as the consequences of wrongdoings in the financial sector and to have been poorly handled by governments, has generated a shift in moral values. We are especially interested in stated tolerance towards dishonest behaviours (such as lying when selling second hand goods or inflating an insurance claim for example). Using data from a survey collected in 2010 (the EBRD LITS2 survey) in 35, mostly East European, countries, we report that respondents directly affected by the 2008 crisis, are systematically more accepting of dishonest behaviours. The effect is small but it is robust to specification change, Oster’s test on unobservable bias, and stronger when the dishonest behaviour described negatively impacts the state or businesses rather than citizens. Simultaneously, citizens who live in areas where the crisis has hit the hardest express a stronger rejection of dishonest behaviour. This effect is larger in magnitude, consistently found across all the behaviours investigated, and credibly causal, as it is confirmed by split-sample regressions. Overall, our finding suggests a tightening of moral values after the 2008 crisis, at least in the short-run.