Project Description
All modern welfare states face a set of very difficult challenges as they adapt to the demographic, economic and fiscal pressures of the early 21st century. These include: fiscal pressures of an aging ‘core’ population; political challenges of maintaining public support for adequate social welfare and education in the context of growing ethnic diversity; growing public frustration with and even distrust of bureaucratic state institutions and political authority; intense pressures to reduce (or at least not increase) taxes for politically powerful constituencies, and the continuing pressures to move from manufacturing-based economies towards service-based economies.
These competing pressures deeply constrain the political choices available to policy makers in all advanced democratic nations. It is simply not true, however, that these forces push all democratic states in the same direction. Quite the contrary: the empirical evidence suggests that modern democracies are maintaining quite different policy trajectories – even in the face of broadly similar political, economic and fiscal pressures.In order to understand the actual policy choices made in different countries, we must examine the interaction between political institutions, public policies, and citizen’s preferences. Understanding how institutions shape and frame people’s preferences and consequently their choices is pivotal to a full comprehension of societal regulatory mechanisms. Moreover, developing a better understanding of how and to what extent specific institutions shape and modify people’s decisions may allow us to reform and adapt institutional system in a more effective and measured way.
This research project focused more directly on the ways in which the political and institutional context shapes or affects citizens’ preferences. Only when we better understand both what citizens in different polities actually believe about their state, and why, can we build realistic models to understand how their policy systems can be reformed or adapted in the context of the enormous pressures they face today. This research thus combined the strengths of classical historical institutionalist analysis with recent developments in cognitive and evolutionary science and decision theory.
Methodology
In order to test the relationships between institutions, choices and preferences, the team conducted a series of experiments in different countries to examine the different trade-offs individuals in different societies make under different conditions. Specifically, they focused on two sets of redistributive policy issues: taxation and public pensions. The chief purpose was to build a series of scenarios that would allow them to test how different institutional contexts frame or shape citizens’ decisions and thereby better understand how they perceive and process different policy choices and trade-offs. In order to effectively test these ideas the researchers needed to understand the workings of the national political institutions as well as the structure of the different tax systems in each of these different countries.
The team conducted several different types of experiments as we progressed through the five years of this research project, and adjusted the experimental designs as they learned from the interactions between the country specialists and the experimental results. Experimental tools helped establish a baseline from which to understand questions like attitudes towards other individuals, trust, social norms, perceptions of others, etc.Throughout the study, historical institutionalist country specialists worked intensively with the experiments in each round, both so that the researchers could refine the experiments in ways that made them more realistic within different national contexts, but equally importantly so that they could build experiments that would test the specific hypotheses generated by the country specialists.
Different institutional and policy structures have different implications – or at least salience – in different national contexts. Professor Steinmo wanted to know how these trade-offs are perceived and, perhaps, if they could be manipulated. In the initial phase of this project scientists who had experience working with and building experimental models and social scientists who were expert in political institutions and tax policy regimes in our four nations were brought together. The strength of the comparative institutional scholar is that he or she has a much deeper understanding of not only the formal institutions in a given country, but also the informal norms and expectations that are likely present in that country. The strength of the experimental scientist is that he or she is better positioned to design specific experiments that would enable us to test for differences in norms, expectations, perceptions of fairness, attitudes toward redistribution, and willingness to pay.
The foundational idea of this project was that by combining these strengths the team would be able to build better models to test the arguments and assumptions made by historical institutionist country specialists, and thereby build better and more verifiable theories for explaining cross-national variation. The team worked with researchers and scholars from all four countries (Italy, Sweden, Great Britain and the US) as well as the tax specialists and experimental scientists. A large multi-day conference/workshop kicked off the project. In the first year of the project they assembled the researchers and begun some initial pilot experiments. In the initial phase of the project the intention was to organise pilot experiments regarding public goods and trust. The team wanted to establish a 'baseline' for the different countries in an attempt to understand some basic variations in social norms with respect to willingness to pay taxes.
The country specialist collaborators as well as the external scientists and tax experts were reassembled in the first, third and final years of the project. These larger conferences had slightly different functions as the research developed and the team became more expert. Throughout the project, however, the principal investigator and the research fellows involved in the project travelled to each of the countries in which particular experiments were being held at the time of the experiments.
Conclusions
This study generated interesting and useful findings with respect to the intersection of institutional structures, tax regimes, and citizens’ willingness to pay taxes and/or finance intergenerational redistribution that is of use to both national scholars and comparative political economists. These findings were published in both national and international journals throughout the course of the study. The researchers also wrote one edited volume in which they compared the national findings. Finally, Professor Sveinmo wrote a monograph that attempted to build a bridge between the development of cognitive science and the models of institutional and welfare state change.