Research Seminar on Diversity and Development
Denis Ivanov, ICSID Research Fellow, presented his paper "Do institutions cause social trust? Evidence from an institutional reform" on April 18, 2017.
To reduce unobservable heterogeneity between Georgia as a treatment group, and Armenia and Azerbaijan as a control group, I exploit the fact that republics borders during the Soviet era did not always reflected the settlement patterns of ethnic groups, thus creating a number of minorities separated from their ethnic kins by arbitrary borders that were internal within the USSR but have become international after the independence. In this particular case, Georgia has several districts with predominantly Armenian and Azeri population spanning along its border with Armenia and Azerbaijan. Comparing people of the same ethnic group on both sides of the border allows concentrating on differences in governance and formal institutions and to diminish possible confounding effect of culture-related heterogeneity.
Applying regression discontinuity design to the data from Life in Transition and Caucasian Barometer surveys, I find that Armenian and Azeri residents of Georgia have greater level of interpersonal trust than their counterparts in Armenia and Azerbaijan. Perceptions of corruption and rule of law are likely channels of influence.
As usual, the event was held by ICSID and CSDSI in cooperation with the HSE seminar “Political Economy”.