Global crisis significantly shifted support for democracy and markets, EBRD report shows

The EBRD's report - "Crisis and Transition: The People's Perspective " - explores the reasons behind an especially sharp drop in commitment to the principles of democracy and markets in the new Member States of the European Union and a surprising upswing in some other countries, the press release of the EBRD reads..

This Transition Report 2011 analyses a wealth of data contained in a survey of some 39,000 people, primarily from emerging Europe.

The third in a trilogy of annual Transition Reports assessing the impact of the crisis on the region where the EBRD invests, this year's report also explores why the crisis affected ordinary households in the transition region far more than in Western countries (Chapter 2 ) and analyses the factors that support the development of successful entrepreneurship in the transition region (Chapter 4 ).

Building on the data, the Transition Report concludes that attitudes to democracy and the free market can be explained partly by the experiences of individual groups during the crisis (Chapter 3 ).

People became less supportive of democracy if the recent crisis hit them hard relative to their memories of past crises. The findings of the report suggest that markets and democracy lost support in the more advanced transition countries because they experienced deeper downturns in this crisis than in earlier recessions in the early and mid 1990s. By comparison, the most recent crisis was generally milder in CIS countries than the output decline that followed the collapse of communism.

The report also finds compelling evidence to suggest that the crisis made people "turn against what they had". Those who lived in more market-oriented and democratic societies and were affected by the crisis became less likely to choose democracy and markets over other systems.

On the other hand, support for democracy and markets actually rose - in some cases quite sharply - in some of the less-advanced economies especially in the former Soviet Union.

The report says: "This is particularly true of crisis-hit people in the CIS countries who perceived a high degree of corruption. It may be that for those individuals, the crisis diminished any sympathy they may have had for state-led systems."

The findings of the Transition Report emerge from analysis of the data in the EBRD - World Bank's second Life in Transition Survey (LITS) survey, a comprehensive review of attitudes of people across the EBRD region. The first survey was conducted in 2006 and a follow-up was published in 2011, covering emerging Europe as well as a number of Western comparator countries.

For full version go to http://www.ebrd.com/pages/news/press/2011/111115