Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/183426 
Year of Publication: 
2018
Series/Report no.: 
IFN Working Paper No. 1197
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
Since the early 1980s a wave of liberalizing reforms has swept over the world. While the stated motivation for these reforms has usually been to increase economic efficiency, some critics have instead inferred ulterior motives and a desire to enrich certain (already rich) people at the expense of others. This critique, coupled with the claim that many of the reforms have been undertaken during different crises so as to bypass potential opponents, suggests that people will dislike the reforms and even be less satisfied with democracy as such. We test this hypothesis empirically, using panel data from 30 European countries in the period 1993-2015. The dependent variable is the average satisfaction with democracy, while the reform measures are constructed as distinct changes in four policy areas: government size, the rule of law, openness and regulation. Our results indicate that while reforms of government size are not robustly related to satisfaction with democracy, reforms of the other three kinds are - and in a way that runs counter to the anti-liberalization claims. Reforms that reduce economic freedom are generally related to satisfaction with democracy in a negative way, while reforms that increase economic freedom are positively associated with satisfaction with democracy. Voters also react more negatively to left-wing governments introducing reforms that de-liberalize.It thus seems as if the hypothesis of a general negative reaction towards liberalizing reforms taking the form of reduced satisfaction with democracy does not stand up to empirical scrutiny, at least not in our European sample.
Subjects: 
Government satisfaction
Reforms
Crisis
Public choice
Voting
Institutions
JEL: 
D02
D72
H11
P11
Z18
Document Type: 
Working Paper

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