Public Attitudes to Economic Policy in East and West: Efficiency, Subsidies and Public Ownership

PUBLIC ATTITUDES TO ECONOMIC POLICY IN EAST AND WEST: EFFICIENCY, SUBSIDIES AND PUBLIC OWNERSHIP Joanna Sikora ABSTRACT During the last two decades of the 20th century, the predominant opinion among elites in most Western nations has been that market economies, competition, free trade, and minimal government regulation are more efficient than government ownership of the economy. Throughout the West government policy has steadily shifted toward freeing market forces within nations and the globalization of trade between nations; changes in Eastern Europe have been even more dramatic. But it is by no means clear that the Western public accepts the elite’s views. It is even less clear what the general public in Eastern Europe – raised under Communism and exposed to widespread disruption and economic decline in the years following its collapse – thinks. I address these issues with extensive survey data from large, representative national samples in Australia, Finland, Poland, and Bulgaria. I find that by the mid-1990s the general public in both East and West were convinced that private enterprise is much more efficient than government-owned firms, although the East remained more sympathetic to government ownership. In all four nations, the educational Research in Social Stratification and Mobility Research in Social Stratification and Mobility, Volume 23, 229–274 Copyright r 2005 by Elsevier Ltd. All rights of reproduction in any form reserved ISSN: 0276-5624/doi:10.1016/S0276-5624(05)23008-1

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elite were more persuaded of the virtues of the market than were their less-educated peers. In all four nations, support for government ownership depended on positive evaluations of the economic efficiency of government enterprises to roughly the same degree. It also depended on the desirability of consumer subsidies and the desirability of job protection. Here, the public in both East and West departed from the prevailing dogma of economic liberalism.

INTRODUCTION Since the Second World War, two major trends have shaped economic policy in the West. First, in the early post-war period, many countries extended government ownership, imposed high taxation and protected manufacturing industries by high tariffs. Government wage-setting was shielded from international pressures, enabling ‘‘invisible welfare’’ by setting relatively high pay for ordinary jobs, and relatively low pay for skilled work. Equality was acclaimed and income redistribution widespread. Secure jobs were widely available. Western economies, particularly in Scandinavia and Central Europe, moved closer to the collectivist pattern of Communist Eastern Europe. Then Western economies began to slow down in the 1970s. By the 1980s, many leaders on both sides of politics were convinced that it was time to reduce the role of government and open the economy to trade of the wider world. The opportunities for economic growth were, in their view, worth the hazards of competition and globalization. In this second phase of the postwar period, tariff barriers tumbled, leading to lower prices for consumers, and forcing uncompetitive industries to reform, transform, or die. Deregulation of the labor market proceeded apace. However, all this has recently stimulated concerns that differentiation has gone too far, and that social conflict is growing. Moreover, it is by no means clear that the Western public accepts these elite views – indeed, widespread, sometimes violent, protests have begun to appear in recent years. Changes in Eastern Europe in this period have, of course, been even more dramatic (World Bank, 1995). But it is even less clear what the general public in Eastern Europe – raised under Communism and exposed to widespread disruption and economic decline in the years following its collapse – thinks. This paper presents empirical evidence on these issues, based on extensive survey data, collected in mid-1990s, from large, representative national samples in Australia, Finland, Poland, and Bulgaria. The analysis is inspired by

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four theories, and their predictions about evaluations of efficiency of private enterprise, and about the link between these evaluations and the perceived desirability of government ownership in the economy. The theories are global neo-liberalism, rational choice self-interest, historical-legitimacy, and core values. My model (1) tests whether public opinion agrees with elites in perceiving private enterprise as more efficient, (2) tests whether people who see private firms as more efficient want more of them in the economy, and (3) measures the extent to which the general public’s enthusiasm for private enterprise and its efficiency is moderated by the perceived need for government intervention. The comparative setting allows one to see whether public opinion differs among countries in line with specific historical trajectories of economic policies, or is subject to ‘‘global common influences’’ (Yarrow, 1999) penetrating Western and Eastern European nations alike and resulting in global agreement on the superiority of private enterprise. Studies of public opinion are not of interest only as descriptions of culture and ideology. Rather, studies consistently show an impact1 of general public opinion on policy shifts (Brooks, 2000; Brooks & Cheng, 2001; Burstein, 1998). Moreover, a meta-analysis of a large collection of studies of determinants of public policy outcomes found that those including measures of public opinion among the potential causes had more explanatory power than those omitting it. Thus, as democratic theory predicts (Burstein, 1998, p. 28), political actors are alert to the opinion not merely of the elites but also of the citizenry, and adjust their agendas and behavior accordingly. Hence, assertions that public opinion has no independent influence on policy because it is manipulated by the elites are unconvincing. Instead, elites are only one potential influence on general public opinion and the degree of this success is subject to empirical test (Burstein, 1998). Therefore, public opinion shifts and changes in the legitimacy of the governmental reforms are key factors in understanding the direction, course of development and wider social impact of institutional and normative changes. To this end, this paper contributes a comparative analysis of evaluations of economic efficiency of private and public enterprise, perceived desirability of subsidies, and sentiments about governmental ownership in core zones of the economy.

PRIOR RESEARCH One of the most widely accepted theorems of neo-liberal economic theory – a major driving force for change in the last two decades of the 20th century – is that divestiture and deregulation improve incentives for economic

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efficiency in firms (Estrin & Perotin, 1991; Vickers & Yarrow, 1988; Yarrow, 1999, p. 158). Many economists argue, with considerable empirical support, that private ownership increases economic efficiency (e.g. Eckel, Eckel, & Singal, 1997; Kumbhakar & Hjalmarsson, 1998; Megginson, Nash, & Randenborgh, 1994, 1996; Shirley, 1999; World Bank, 1995; Yarrow, 1999, p. 162).2 Although it is not always the case that ownership change per se improves economic performance, most economists agree that it plays a very important role next to competition and regulatory policies (Estrin & Perotin, 1991; Frydman, Gray, Hessel, & Rapaczynski, 1999; Yarrow, 1999). Change in ownership alters managerial incentives and rewards for shareholders. Although industries such as railways and postal services tend to be government-owned in many countries (Anderson, de Palma, & Thisse, 1997; Mayer, 1989, p. 265), the majority agree that private ownership leads to better economic efficiency in most industries (Boardman & Vining, 1989; Davis & Moore, 1945; Lensky, 1994; Yarrow, 1999). Consistently with that view, functionalist theory in sociology argues that private ownership motivates the best-qualified people to seek the most important positions, and perform to the best of their ability once they are in them (Davis, 1953). The bottom line is the belief that in an optimally efficient economy when costly, although well-intended, government distribution is replaced by market mechanisms, citizens gain optimal access to welfare. In this paper, I examine the extent to which the public in Australia and Finland – two established market economies, and in Bulgaria and Poland – two postCommunist countries – share this view. Although the relationship between ownership structure and economic efficiency has been assessed in many empirical studies in economics, and there have been several sociological studies of attitudes to ownership (Heath, Evans, & Martin, 1993; Osborn, 1998; Rose & Makkai, 1995), little is known about perceptions of the efficiency of private and public enterprises and their impact on other economic attitudes, with the exception of ISEA-based analyses (Kelley, 1990b; Zago´rski, 1999). Historical legitimacy arguments suggest that, regardless of perceived efficiency, people are likely to prefer economic institutions with which they have been long acquainted. The self-interest argument predicts divides between the richer and the poorer, entrepreneurs and laborers, the managers and supervisees. Finally, core-value theory predicts that commitment to the market economy and private enterprise is a function of strongly unified national mass cultures. Some argue that in formerly communist countries inefficient allocation of resources including labor, bad management and a catastrophic scheme of

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material incentives resulted in a very negative image of government enterprises (Lensky, 1994). Contrary to this prediction, an analysis of support for government ownership in Poland and Bulgaria showed that government ownership is still very popular (Sikora & Kelley, 1999). This highlights the fact that the views of elite specialists are not always reflected in the citizenry at large. Instead, we must take as problematic both public perceptions of the relative efficiency of private and government enterprises and the effect of these perceptions on public ideals about government and private ownership. Therefore, evaluations of efficiency and their impact on attitudes to ownership ought to be empirically investigated.

ORGANIZATION OF THE PAPER Fig. 1 presents the conceptual organization of this analysis. First, I investigate to what degree people think that private enterprises tend to be more efficient than government-owned enterprises. Favorable perceptions of efficiency may be associated with perceived ‘‘government failures’’ (Hayek, 1946; Popper, 1966), if people believe that economic systems dominated by private ownership and market-generated distribution provide optimal wealth in the long run. I account for differences in perceived economic efficiency using age, sex, education, subjective and objective class. Next I investigate the significance of these perceptions, assessing to what degree they shape people’s preferences for government versus private ownership across the economy. Good estimates of the effect of perceived efficiency on ideals about ownership need to be imbedded in models that also take into account other key factors such as desire for subsidies. This is especially important in postCommunist societies where the high social costs of privatization may have raised public concerns. People might consider government intervention necessary to offset the imperfections of the market and its resulting unjust distribution. Attitudes driven by such perceptions of ‘‘market failure’’ (Hayek, 1946; Popper, 1966) are operationalized as desires for subsidies. Although subsidization policies are perceived in the literature as an integral part of statist or socialist economic systems (see e.g. Spenner, Suhomlinova, Thore, Land, & Jones, 1998; Yarrow, 1999), in many market-dominated systems a variety of industries receive various subsidies in both private and state sectors (e.g. Industries Assistance Commission, 1985; Industry Commission, 1997). Therefore, I test whether support for subsidies of basic consumer goods such as food, electricity or hospital services leads to

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Perceptions of efficiency of private and public firms

Social structural position of an individual

Attitudes to ownership of industry and commerce,

Attitudes to subsidizing consumer necessities and jobs

Fig. 1. Conceptual Model of Formation of Public Preferences for Public and Private Ownership Based on Perceived Efficiency of Private Enterprise and the Perceived Need for Subsidies in the Economy.

support for government ownership of different industries also in the West. I also test whether support for subsidies to maintain jobs in declining parts of the economy leads to endorsement of extensive government ownership. Although adding controls for attitudes to subsidies increases the complexity of the model, it is necessary in order to assess the relative importance of perceptions of efficiency versus public commitment to government regulation of economy. Due to space limitations, I do not discuss the impact of social class differences on support for subsidies and ideals about government ownership (dotted lines in Fig. 1) but I control for them in all the analyses. Economists argue that the belief in superiority of private over public enterprise is common wisdom, prevalent, even if at times not supported by empirical evidence (Helm, 1989, pp. 1–3; Mayer, 1989, p. 251). A similar conclusion follows from Hayek’s analysis of market competition, which argues that the market is an optimal user of knowledge dispersed through society. Hence private enterprises are bound to be more information-, innovation- and application-efficient in a way by default impossible in firms dependent to any degree upon the centralized state. Although efficiency does not have to be the only concern in deciding the optimal boundaries of

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governmental intervention in the economy3 in the ‘‘New Right’’ theories efficiency takes central place. Therefore, the direction of causal relation in this analysis hinges upon the assumption that perceptions of economic efficiency influence public ideals about ownership.4 If citizens believe that the economic system based on private enterprise is more efficient and they desire economic efficiency, they will support private ownership as a ‘‘means’’ attitude dependent on a ‘‘goal’’ attitude: efficiency (of businesses) in the economy. It is also possible that people are committed to private or government ownership on other grounds and adjust their perceptions of efficiency accordingly. One example of ‘‘other grounds’’ can be socialist ideology. In the ‘‘one Weltanschauung’’ model, attitudes to efficiency and ownership are formed simultaneously and do not predetermine each other, but are instead caused by a third variable, ideology. This model summarizes economic attitudes on one statist versus liberalist dimension. However, confirmatory factor analysis does not support it (Appendix B, Table B.2, Panel II).5

HYPOTHESES Specific predictions regarding perceptions of efficiency and ideals about ownership are extrapolated from four theoretical perspectives: global neoliberal theory, rational choice self-interest, historical legitimacy and the core-value theory (Table 1). Neo-liberal market efficiency theory, adapted for sociological analysis, predicts that both in the West and in the East people will perceive private enterprise as more efficient (column A in Table 1, see Davis & Moore, 1945; Yarrow, 1999). Despite historical differences in the governmentsector presence in national economies, the neo-liberal theory implies that private enterprises will be perceived as more efficient to a very similar extent in all four countries. This will be because of the universal applicability and appeal of the reasoning that under most circumstances private ownership leads to better economic growth, which benefits all in the society including those at the top and those at the bottom. If the thinking of the public is mainly governed by the neo-liberal logic, there should be few differences between people occupying different social positions. However, the effect of education can be an exception. If private enterprises are really more efficient, the educated may have more cognitive skills and a broader intellectual outlook than the less educated, which enable them to recognize that private enterprises tend to be more efficient.6 Having more

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Table 1.

Theories about Perceived Efficiency of Private versus Government Enterprises in the Economy. Preferred Theory

Perceptions of efficiency of private versus government enterprises

A. Neo-liberal market theories

Some Support B. Self-interest

A Little Support C. Historical legitimacy

Almost No Support D. Core values (Market culture)

Results

Panel I: In a market economy 1. Average perceptions of government firms’ efficiency

H1A. Government H1B. No distinct firms perceived as prediction inefficient

2. Social structural impact on H2A. Few but the perceived efficiency of educated perceive government sector firms favorably private enterprise efficiency

H2B. Large effects: H2C. Few or none: H2B. No individual Public servants level differences perceive public the educated particularly of enterprises as perceive public government sector efficient, the enterprises as of employment educated in better inefficient owing and ownership of jobs view them as to their longer means of inefficient schooling production

H3B. No strong H3A. Strong link, favorable relation after controlling for perception of private enterprise stratification differences. lead to support for private ownership

H3C. Impact varies H3D. Equal by country and correlations share of between government perceptions of enterprise in the efficiency and past attitudes to ownership

Strong link between views on efficiency and ideals about ownership of industry and commerce

JOANNA SIKORA

3. Impact of perceptions of efficiency on ideals about ownership in the economy

Government firms H1C. Government H1D. Government perceived as firms perceived as enterprises inefficient, as few inefficient and relatively non-market inefficient in the past oriented

4. Average perceptions of government enterprises’ efficiency

H4A. Government H4B. No distinct firms perceived as prediction inefficient

5. Social structural impact on H5A. Few but the perceived efficiency of educated perceive government sector firms favorably private enterprise efficiency

H4C. Compared with the West government enterprises’ seen as relatively efficient

H4D. Government firms seen as efficient compared with private enterprises

H5D. No H5B. Large effects: H5C. The young individual-level perceive particularly of differences government as government sector of employment inefficient in contrast to the and ownership of means of elderly. Education effects production vary by age

6. Impact of perceptions of efficiency on ideals about ownership in the economy

H6A. Strong link, H6B. No strong favorable relation after perceptions of controlling for private enterprise stratification lead to support for differences private ownership

H6C. Strong link, similar for all industries

H6D Equal correlations between perceptions of efficiency and attitudes to ownership

Percent of prediction correct

About 75%

About 35%

About 20%

About 50%

Unfavorable perceptions of public firms’ efficiency

Public servants perceive public enterprises as efficient, the educated in better jobs view them as inefficient Strong link between views on efficiency and ideals about ownership of industry and commerce

Public Attitudes to Economic Policy in East and West

Panel II: In a post-socialist economy

Note: Hypotheses close to patterns found in the analysis shown in bold type.

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education can also facilitate comprehension of neo-liberalist ideology, which insists on privatizing for the sake of long-term gains, even if immediate outcomes of reforms result in welfare reduction and an increase in economic inequality. If individual self-interest were the main determinant of attitude formation, perceptions of economic efficiency would be rather different (column B in Table 1). It is difficult to predict whether the public will on average perceive government or private firms as more efficient without making a number of additional assumptions, hence the lack of distinct prediction in H1B and H4B. What demarcates this perspective from theories reviewed so far is that it predicts strong differentiation in perceptions of efficiency depending on public or private sector employment and ownership of the means of production (H2B, H5B, Marx, 1906). For example, Dahrendorf (1959) suggests that government-sector employees want to preserve their status quo, therefore, they will consider their enterprises as relatively efficient.7 In line with the self-interest argument, the effect of perceived economic efficiency on ideals about ownership should be small,8 after controlling for stratification effects at the individual level. The historical legitimacy hypothesis holds that experiences become norms in time. Thus, in market societies, people will perceive private enterprise as more efficient. By contrast, in transforming societies, government enterprise will be rated higher in terms of economic efficiency especially by people who reached adulthood well back in the Communist era (column C in Table 1, Homans, 1961). This contrast between market and transforming societies will come about because of the difference in the ratios of private to government-owned firms over the years, the much more prevalent experience of working within the government sector, and the resulting different paths of socialization into the dominant economic value system (H1C, H4C). The historical legitimacy argument implies that, compared with their senior peers, the young in the transforming societies will perceive private firms as significantly more efficient – perceptions similar to typical perceptions in the West (H5C). In market-oriented societies, better educated people will more readily agree that private firms are more efficient (H2C), as they have had greater exposure to the neo-liberal vision of the world economy in their longer education process. By contrast, in transforming societies, the effect of education should depend on ‘‘vintage,’’ for different ideologies have held sway during the education of different cohorts: the older educated9 should perceive the government sector as efficient, whereas the younger educated should perceive the private sector as efficient.

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The core-value theory sees the source of attitudes mostly in past experiences and institutional settings, but unlike historical legitimacy it allows people to evaluate their experiences (column B, Feldman, 1988; Heath, Evans, & Martin, 1993). Everyday practices, the mass-media-supported transfer of ideas from the elite and knowledge of experiences of others lead people to ingest values and norms reflecting the dominant culture at the national level, which shapes attitudes10 (McClosky & Zaller, 1984, pp. 100–128; Roller, 1994). Therefore, as nations belong to different ‘‘cultural zones’’ (Inglehart, 1997), their citizens will support private ownership to different degrees. Core-values theory makes essentially the same predictions as the historicallegitimacy hypothesis regarding the average perceptions in the West and the East. The main difference is that core-values theory predicts small or null stratification effects. This could be the case, because the concept of private entrepreneurship has strong positive value connotations in the culture of both the elite and masses in the West. Similarly, little stratification influence might be evident in the East, if there were still a largely socialist mass culture with only tiny pro-free-market elite, too small to show up in a general population survey. In fact, as we will see, themes from different theories fit different elements of the pattern found in the analysis (Table 1; right-hand column).

DATA, MEASUREMENT AND METHOD Data Data are from four large, representative national sample surveys conducted as part of the International Survey of Economic Attitudes in Australia, Finland, Bulgaria and Poland. There are 7,55811 cases in all. Comparisons with the Census show that the samples in all four countries are representative of their populations in terms of sex, age, place of residence, education, and occupation (Sikora, 1997). The selection of countries in this study is pragmatic. Ideally, I would like to have included other prosperous societies with little government economic activity, like the United States, or low-income societies with no experience of socialism and little state regulation in the economy, like the Philippines. However, comparative data are not yet available from such countries. The four countries presented here represent two different types of market-oriented economies: the long-established market-oriented economy and the transforming economy (Castles, 1997; Esping-Andersen, 1990; Stephens, 1997).

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1995 PPP estimate of GNP per capita US =100

To convey some sense of how large a share the public sector represents in these four economies, it is useful to compare them with other countries. Fig. 2 gives the Parity Purchasing Power corrected estimates of Gross National Product per capita in 1995, shown as ratios to the GNP per capita of the United States, of Australia, Finland, Poland and Bulgaria and other selected nations (World Bank, 1997). It also shows the proportion of the labor force employed by the private sector (to indicate the balance of economic activity between the public and private sectors, International Social Survey Program, 1995).12 Australia and Finland are wealthy economies,13 with extensive private employment, similar to many other Western European and Anglo-Celtic nations. Poland and especially Bulgaria have much lower GNPs and still have large public sectors, like most other formerly Communist nations of Eastern Europe. Australia has most features of a liberal, market-oriented system (although Australians hold more egalitarian views than the people of other capitalist societies, see Kelley & Evans, 1993, p. 114). Finland is a market economy with a history of extensive state regulation (Ja¨ntti & Ritakallio, 1999). The two transforming countries, Poland and Bulgaria, are much poorer and differ in their current

100

USA

90 Norway

80

Italy

AUSTRALIA

70

Japan

Austria

Germany Canada Sweden

Netherlands

UK

FINLAND

60

New Zealand Ireland Spain

50 40 Czech Republic

30 Hungary

20

BULGARIA

POLAND

Russia Slovak Republic

10

Latvia

Philippines

0 0

Fig. 2.

10

20

30 40 50 60 70 80 Private sector employment -% of labor force

90

100

Private Sector Employment and GNP per Capita at Parity Purchasing Power in 1995.

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progress in economic reform and their pre-transition history of private and government ownership.14 Australia The Australian data are from the 1995 International Survey of Economic Attitudes (Kelley & Evans, 1995). It was based on a simple random sample of Australian citizens drawn by the Electoral Commission from the compulsory electoral roll. The survey was conducted by mail using a modification of Dillman’s Total Response Method with up to four follow-up mailings, two with fresh copies of the questionnaire, over a 6-month period. The completion rate is over 62%, which compares favorably with some studies in the USA (Dillman, 1991), and the International Social Survey Program (Zentralarchiv fu¨r Empirische Sozialforschung, 1989). There are 2,438 cases. A comparison of mail and face-to-face surveys using the same questionnaire suggests that there are no systematic differences in the results of the two methods (Bean, 1991). Finland The Finnish edition of International Survey of Economic Attitudes was conducted as a special purpose survey by Turku University, Finland in the fall of 1994 (Kangas, Ervasti, Zago´rski, & Kelley, 1995). Thus, Round 2 of ISEA is the only one available for Finland. The Finnish ISEA was based on a simple random sample of Finnish citizens aged 18–74 which excluded citizens who speak only Swedish. The Population Register Center provided address information. Originally, 3,119 questionnaires were sent, of which 1,737 were returned. There were four follow-ups, one with a fresh copy of the questionnaire. The response rate was 56%, which is comparable with similar studies. Bulgaria The 1997 Bulgarian edition of the ISEA survey was conducted by the Institute of Sociology, Bulgarian Academy of Sciences (Zlatkov & Zago´rski, 1997). Trained interviewers from the Agency for Social Analysis collected the data. The completion rate was 85%. There are 1,273 cases. Poland The Polish survey was conducted as the second round of the International Survey of Economic Attitudes by the Center for Social Opinion Research, Warsaw, Poland (Zago´rski, Kolarska-Bobinska, & Kelley, 1994). It was based on an area probability sample of the Polish population, aged 18 and

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over. It was conducted by face-to-face interviews. The completion rate was over 90%, and there are 2,127 cases. The Bulgarian survey is a couple of years more recent than the surveys in the three other countries, but an earlier survey was not available. The literature suggests strongly that while in Poland privatization reform was well underway by the mid-1990s (Organization for Economic Co-operation and Development, 1996/1997), in Bulgaria, privatization has been slower than in other transforming economies (Elster et al., 1998). In fact, it did not start properly until 1996 when a significant number of state-owned enterprises were finally sold (Minassian, 1997).15 Hence, the comparison of attitudes captures in both countries early phases of privatization.

Measurement Social location measurement Social class measurement encompasses a number of distinct aspects of class, included in the models as distinct variables to allow separate estimation of each dimension’s effect. Objective class is measured by an extension of the Blau-Duncan model to include ownership and supervision (Robinson & Kelley, 1979). This model includes ownership of the means of production (which is emphasized in the classical theories of Marx and Adam Smith) and authority in the workplace as well as education, occupational status, and income. The focus on norms about public and private ownership in the economy requires controlling for government versus private-sector employment, the division highlighted in Dahrendorf’s (1959, pp. 296–300) analysis of industrial societies. Socialization and post-industrialization arguments predict differences in attitudes between age groups. Feminist approaches suggest gender as the main social cleavage. Ecological arguments imply that urban or rural residence may differentiate norms. Therefore, I control for all of the above as well as for participation in the labor force, a crucial class variable in the neo-Marxist theory. Details are in Appendix A, and descriptive statistics for all the items are in Appendix B, Table B.1.

Method To investigate the structure of perceptions of efficiency, I use confirmatory factor analysis as available in AMOS 3.6116 (Arbuckle, 1994–1997) with

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Anderson’s full information maximum likelihood estimation in the presence of missing data (Anderson, 1957; Arbuckle, 1994–1997, 1996; Little & Schenker, 1995).17 To model the effects of social structure on perceptions of the efficiency of private or government enterprises, I use a structural equation model, which estimates simultaneously in four countries the effects of stratification on four latent variables: (1) attitudes to subsidies of consumer necessities, (2) attitudes to subsidies for job schemes, (3) perceptions of economic efficiency, (4) attitudes to government ownership of industry and commerce. It also estimates the effects of attitudes to subsidies and perceptions of efficiency (1+2+3) on attitudes to ownership (4).18

RESULTS They asked in ISEA are more detailed than those in other surveys.19 They were asked in exactly the same order and wording in all four countries: Government and private enterprises both have their good points and bad points. Which do you think is: (a) More efficient, more productive Government much more Government somewhat more Same Private somewhat more Private much more (b) More flexible, responds quickly to new opportunities and new conditions? (c) More profitable?

(scoring 100) (scoring 75) (scoring 50) (scoring 25) (scoring 0) (Answer categories as above) (Answer categories as above)

Structure of Attitudes to Efficiency of Private versus Public Enterprises The three questions about productivity, flexibility and profitability were factor analyzed to confirm that they measure one latent dimension. Because there are only three items, the measurement model is just identified (saturated) and its fit cannot be evaluated, as there are no degrees of freedom (Bollen, 1989, p. 281).20

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Table 2. Goodness of Fit Indices for Confirmatory Factor Analyses of Perceptions of Efficiency. Panel A: Indices of fit N

w2

Df

CFIa

RMSEAb

I. Independence model 1. Factor loadings constrained to 0

7,410

6,554

12

0

0.271

II. One-factor model 2. Factor loadings invariant

7,410

597

27

0.910

0.094

Panel B: Factor loadings one-factor model (coefficients constrained to be equal across countries)c Government-owned enterprises more productive Government-owned more flexible Government-owned more profitable

0.75 (0.01) 0.79 (0.01) 0.69 (0.01)

a

Comparative Fit Index (Arbuckle, 1997, pp. 565–566). Root Mean Square Error of Approximation (Arbuckle, 1997, p. 558). c This is a saturated model and RMSEA is incalculable since zero appears in the denominator of its formula (Bollen, 1989). b

Yet, since the unstandardized21 coefficients and their standard errors for confirmatory factor analysis (Table 2, panel B)22 are highly significant, the model specification is most likely correct. Another model, estimated simultaneously in four countries with equality constraints imposed on factor loadings, has fully acceptable indices of fit (Table 2, panel A). CFI is greater than 0.9 and RMSEA is small, although slightly over the recommended 0.08 (Browne & Cudeck, 1993, p. 144).23 These results confirm that in all four countries the three measures reflect one underlying attitude: perceptions of the economic efficiency of government and private enterprises. Perceptions of the Efficiency of Private and Public Enterprises People in both Western and transforming countries have similar perceptions of the efficiency of government and private enterprises: the view that private enterprises are more efficient prevails (Table 3). As the neo-liberal hypothesis predicts, the means are low in all four countries, oscillating around the ‘‘Private somewhat more efficient’’ category. In none of the nations does the average evaluation reach the midpoint ‘‘government and private enterprises equally efficient.’’

Public Attitudes to Economic Policy in East and West

Table 3.

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Perceptions of Government-owned Enterprises Compared with Private Enterprises (%).

Which Enterprises are more

Mean (0–100)

N

State! (100)

State (75)

Same (50)

Private (25)

Private! (0)

0 0 2

6 5 12

17 11 13

61 66 57

17 17 17

28 28A 26 31

2,355 2,345 2,334

1,677 1,676 1,673

Panel 1: Australia 1995 Efficient (scale) Productive (%) Flexible (%) Profitable (%) Panel 2: Finland 1994 Efficient (scale) Productive (%) Flexible (%) Profitable (%)

2 2 2

9 6 12

16 11 24

45 43 42

28 38 20

28 28A 23 33C,D

10 6 8

14 10 13

14 11 15

40 45 39

23 29 25

34 37 29 35B,C

1,929 1,912 1,829

19 27 25

37 44 32 35B,D

1,083 1,100 1,044

Panel 3: Poland 1994 Efficient (scale) Productive (%) Flexible (%) Profitable (%) Panel 4: Bulgaria 1997 Efficient (scale) Productive (%) Flexible (%) Profitable (%)

15 9 8

19 10 12

14 10 15

34 45 40

 Means different significantly for each pair of countries at po0.05 level. A

Means not different significantly between Australia and Finland. Means not different significantly between Bulgaria and Poland. C Means not different significantly between Finland and Bulgaria. D Means not different significantly between Finland and Poland. B

Nonetheless, there are country differences. Poles and Bulgarians hold slightly more favorable perceptions of the efficiency of government enterprises (34 and 37 points on a scale from 0 to 100 points, where 100 denotes the view that government enterprises are much more efficient than private enterprises) than do Finns or Australians (28 points). This difference is consistent with both the historical legitimacy and core-value theories but its size is small.

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Practically no one (0%) in Australia thinks that government enterprises are much more productive than private firms. In all, 6% of Australians think that government firms are somewhat more productive, while 17% perceive both private and public firms as equal. The majority (61%) think that private firms are somewhat more productive, and 17% have no doubts that the productivity of private sector always exceeds the productivity of government-run companies. Perceptions of flexibility are very similar. Only 5% of respondents think that government businesses are more flexible, whereas 11% take the view that both sectors are flexible. In total, 66% of Australians see more flexibility in the private sector, and 17% think that private firms are exceedingly more flexible. However, there is some diversity of opinion in Australia. Of the respondents, 12% think that government-owned enterprises can be more profitable than private businesses: 2% even think public enterprises are much more profitable. Nonetheless, the majority of Australians see private enterprises are more efficient on all three criteria. Public opinion is somewhat more differentiated in Finland. About 2% think that government firms are much more productive, and 2% more think they are much more flexible and profitable. Between 6% and 12% perceive public sector as somewhat more productive, flexible, and profitable. Similar proportions of Finns and Australians find government and private firms equally productive and flexible: 16% and 11%. Yet, on profitability, as many as 24% of Finns rate government firms as equal with private enterprises, twice the corresponding figure in Australia. Between 42% and 45% of Finns perceive private firms as somewhat more productive, flexible, and profitable. This group of moderate supporters of private enterprise is smaller than in Australia. In contrast, the group of strong enthusiasts of the private sector is relatively larger in Finland. Poles are more likely than Australians or Finns to perceive the government sector as efficient although these are minority perceptions even among Poles. Between 6% and 10% of Poles perceive very favorably the efficiency of government businesses and 10–14% think that the public sector outperforms private firms.24 Between 11% and 15% of Poles see no difference between private and public sector. The modal perception among Poles, 39– 45%, is that private enterprises are somewhat more efficient. About a quarter of Polish citizens are even more enthusiastic about private enterprises and their efficiency. Opinions in Bulgaria and Poland are similar, yet Bulgarians are a little more likely than Poles to view government-owned enterprises as more

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productive or flexible. The mean value is 37 points compared with 34 points in Poland (on a scale from 0 for strong views that private firms are more efficient to 100 indicating that government firms perform better). Perceptions of efficiency are more polarized in Poland and Bulgaria than in Australia. Finland is an intermediate case: similar to Poland and Bulgaria in terms of the pro-private perceptions, but similar to Australia in terms of pro-government perceptions. This evidence supports George Yarrow’s (1999) argument that global privatization is caused by general, common influences. One of them could be a broadly shared favorable view of the efficiency of private enterprises. These positive perceptions of private enterprise in different social contexts speak against the historical legitimacy arguments that long-term experiences are the most powerful determinants of norms (Table 1, column C). However, full evaluation of theories in Table 1 requires incorporating the effects of social structure into the analysis and the examination of the extent to which favorable views of governmental efficiency translate into support for government ownership. How much ground do rational self-interest perspectives (Table 1, column B) gain in this analysis? Do aspects of individuals’ social location matter for perceptions of the efficiency of enterprises? Empirical assessments of these relations are given by maximum likelihood unstandardized coefficients (Table 4),25 from the part of the structural equation model with latent variables, which assesses the effects of social structural variables on perceptions of the efficiency of government and private enterprises.

Individual Level Differences in Perceptions of Efficiency Sector of employment and education are the two most important determinants of the perceived efficiency of government versus private firms (Table 4). Government employees are much more likely to perceive government enterprises as efficient. The coefficients are consistently large in all four countries, ranging from 0.16 in Poland, through 0.17 in Australia and Finland to 0.25 in Bulgaria. Private-sector employees see private enterprises as more economically efficient to the same degree. However, respondents’ sector of employment does not matter much for their attitudes to government ownership.26 Education leads to perceptions that private enterprises are much more efficient than public ones. The strongest net effect of education is in

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Table 4. Maximum Likelihood Metric Coefficients and their Standard Errors Predicting Perceptions that Government Enterprises more Efficient than Private Enterprises in Australia, Finland, Bulgaria, and Poland.

Age Male Urban resident Working Education Family income Farmer State employee Occupational status Owner Petty bourgeoisie Subjective class Supervisor Squared Multiple Correlation (Number of cases)

Australia 95

Finland 94

Poland 94

Bulgaria 97

b (SE)

b (SE)

b (SE)

b (SE)

ns
0.09 (0.02) ns ns
0.05 (0.02)
0.10 (0.02) ns 0.17 (0.02)
0.06 (0.02) ns ns ns ns 0.14 2,368

ns
0.06 (0.03) ns ns
0.17 (0.03) ns ns 0.17 (0.03)
0.09 (0.04)
0.05 (0.03) ns
0.07 (0.03) ns 0.12 1,697

0.17 (0.03)
0.06 (0.03) ns ns
0.21 (0.04) ns ns 0.16 (0.04)
0.19 (0.05)
0.08 (0.03) ns
0.07 (0.03) ns 0.17 2,105

0.22 (0.05) ns ns ns
0.27 (0.06) ns ns 0.25 (0.06) ns ns ns ns ns 0.19 1,240

ns – coefficient not significantly different from zero at p ¼ 0:05: Note: Estimates from multisample simultaneous analysis in four countries – factor loadings on dependent variables constrained to be equal across countries. Source: ISEA 1994/1997.  Coefficients significantly different from zero at po0.05 level.

Bulgaria:
0.27, with
0.21 in Poland,
0.17 in Finland and the weakest in Australia –0.05. The effects of other labor-market-related characteristics vary by country. Interestingly, higher family income enhances positive perceptions of the private sector’s economic efficiency in Australia where the effect of education is smallest, but not in the three other countries. Thus, in Australia, income differences are more relevant than education, which could point to the greater influence of class differences in capitalist systems, a hypothesis that should be tested in the future. Occupational status also influences perceptions of efficiency. Australians, Finns, and especially Poles in good jobs have a significantly stronger tendency to think that private enterprise is more efficient. But the effect is not significant in Bulgaria.

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Owners of the means of production and people with higher subjective social class are more likely than others to think that ‘‘private’’ means ‘‘more efficient’’ in Finland and Poland, but not Australia or Bulgaria. Interestingly men (except Bulgarians) perceive private enterprises as much more profitable, flexible, and productive than do women. Gender difference in the internalization of economic and non-economic attitudes is well documented (Beutel & Marini, 1995; Davidson, Steinmann, & Weneger, 1995) arguably because women may be more ‘‘soft-hearted,’’ or preoccupied more with meeting needs rather than rational principles of efficiency. However, the hypothesis that women favor the government sector because governments employ many women, finds no support: The perceptions of government-employed men and women do not differ significantly. In accord with predictions of historical legitimacy argument (Table 1, column C) the views of older generations of Poles and Bulgarians on efficiency of government-owned enterprises tend to be relatively favorable. This tendency is strong: the coefficients are 0.17 in Poland and 0.22 in Bulgaria. Interestingly, Kelley and Evans (1993) also find similar large effects of age on attitudes about inequality. In sum, the effects of social structure on perceptions of economic efficiency are substantial in all four countries, but not as strong as they would be if individual self-interest were the only force driving economic attitudes and perceptions. More education leads to the belief that private is more efficient, a view shared less by government sector employees. Occupational standing, age, and gender are also influential predictors at least in some countries. Some effects are almost identical across the nations, but aspects of class vary in their importance. For example, in Bulgaria, fewer aspects of social structure matter, but the effects of the few are larger. All in all, the structural effects do not match exactly any of the theories. Instead they support some, but not all, of the predictions from neo-liberal, self-interest, and historical-legitimacy theories. What are the implications of these perceptions? If the neo-liberal argument is correct, the general public will think that efficiency is a key issue in organizing the economy and that the most efficient form of organization is private ownership. Alternatively, the public inclination to share neo-liberal enthusiasm for efficiency of private enterprise could be of little or no consequence for what they think about ownership structure. Let us examine next whether perceived private-sector efficiency leads people to favor private ownership.

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Attitudes to Government Ownership The ISEA asked separate questions about ‘traditional industries’ (banking, insurance, trade, steel, and automotive industry), mass media, education, medical services, and custodial care for children and the elderly. The issue of ownership of the ‘traditional’ business sectors27 seems likely to be the most affected by perceptions of economic efficiency, so I focus on that zone. The questions, asked in the same wording and sequence in all four nations, were: Should these be owned entirely by the government, entirely by private enterprise, or something in-between: (b) The steel industry? (Scoring) Entirely government owned (100 points) Mostly government, but with some private firms (75 points) Half government, half private (50 points) Mostly private firms, but some government (25 points) enterprises Entirely private (0 points) (c) Banking and insurance? (Answers as above) (e) Shops and stores? (Answers as above) (g) The automobile industry? (Answers as above) (h) Foreign trade – owned by the government or by private enterprise? In sharp contrast to the unanimously favorable perceptions of economic efficiency of private enterprise, there is considerable divergence in views on the desirability of government ownership between the two postCommunist countries and two established democracies. Poles and Bulgarians are much more supportive of government ownership than are Australians and Finns. The contrast between the West and the East stands out, for example, in views on the ownership of the steel industry. In Australia, only 3% believe the steel industry should be entirely government-owned (Table 5, panel 1, row 2). In all, 10% feel that it should be mostly government-owned, 21% half government and half private, 52% mostly private and 14% feel it should be entirely in private ownership. In Finland views are similar: 4% are in favor of ‘entirely government,’ 10% mostly government, 34% half and half, 42% mostly private, and 10% entirely private.

Public Attitudes to Economic Policy in East and West

Table 5.

251

Percentages Supporting Government Ownership in Australia Finland Bulgaria and Poland. Entirely Mostly Half & state state half [50] [100] [75]

Mostly private [25]

Entirely private [0]

Mean (0–100)

N

Panel 1: Australia 1995 Government ownership of industry and commerce (%) Foreign trade 5 18 36 29 Steel industry 3 10 21 52 Banks, insurance 5 12 31 40 Automotive industry 1 4 16 49 Shops and stores 0 0 8 56

11 14 11 29 35

32 44A 34 40A 25 19

2,319 2,344 2,331 2,351 2,359

11 10 18 26 48

35 45A 39 41A 33 16

1,677 1,688 1,691 1,689 1,697

5 2 3 7 15

64 67 82B 68 62B 39

1,892 2,052 2,039 2,008 2,096

5 1 5 9 16

62 64 82B 62 60B 42

1,017 1,185 1,170 1,087 1,218

Panel 2: Finland 1994 Government ownership of industry and commerce (%) Foreign trade 7 13 42 27 Steel industry 4 10 34 42 Banks, insurance 10 14 26 32 Automotive industry 5 8 28 33 Shops and stores 0 1 9 42 Panel 3: Poland 1994 Government ownership of industry and commerce (%) Foreign trade 30 24 34 8 Steel industry 54 24 17 3 Banks, insurance 33 20 36 8 Automotive industry 27 18 35 12 Shops and stores 6 6 43 31 Panel 4: Bulgaria 1997 Government ownership of industry and commerce (%) Foreign trade 27 23 33 11 Steel industry 54 27 13 4 Banks, insurance 25 22 34 15 Automotive industry 24 23 29 14 Shops and stores 10 9 35 30

 Means different significantly for each pair of countries at po0.05 level. A B

Means not different significantly between Australia and Finland. Means not different significantly between Bulgaria and Poland.

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But in Poland, views are very different: 54% think that the steel industry should be entirely state owned, 24% think mostly government owned, 17% half and half and only 3% foreign trade should be mainly in private hands while only 2% think it should be entirely private. The Bulgarians have views similar to the Poles: 54% are very strong supporters of government ownership of steel; 27% think that most of the steel industry should be within the public sector. However, 13% of Bulgarians would split this industry half and half between private owners and the government. Few would privatize most (4%) or all (1%) of the steel industry. There are systematic and large differences between opinions in the West and the East. Long-established market societies favor a much smaller role for government in commercial industries than do transitional societies. These differences in levels of support for private ownership occur despite shared favorable perceptions of economic efficiency in all four countries. The next section investigates the linkage.

Efficiency and Attitudes to Government Ownership of Industry and Commerce To assess the effects of perceptions of efficiency as predictors of attitudes to ownership of several ‘‘traditional’’ industries, Table 6 contains metric maximum-likelihood coefficients depicting the link net of the effects of social structural determinants. Evaluations of efficiency are very important for Australians in deciding whether manufacturing, trade and finance should be private or governmentowned, as the coefficient of 0.41 indicates. In Finland, a positive picture of economic efficiency is also very important: the corresponding coefficient is 0.39. However, economic efficiency is less important for generating favorable attitudes to government ownership in Poland and Bulgaria than in Australia or Finland. In the two formerly communist countries ‘‘State enterprises more efficient’’ coefficients are a little more than half the size of the corresponding coefficients in the two Western nations: 0.26 and 0.24. Thus perceived efficiency has very large effects on attitudes toward government ownership in the West, even in this model which controls for attitudes to subsidies to basic consumer goods and job-protection programs. This implies that the public in the post-Communist countries weighs economic efficiency less heavily than their Western peers in deciding how much private ownership is desirable.

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Table 6. Maximum Likelihood Metrica Coefficients and their Standard Errors Predicting Support for State Ownership of Industry and Commerce in Australia, Finland, Bulgaria, and Poland.

Age Male Urban resident Working Education Family income Farmer State employee Occupational status Owner Petty bourgeoisie Subjective class Supervisor Subsidize consumer goods prices Subsidize to protect jobs State enterprises more efficient Squared multiple correlation Number of cases

Australia (1995)

Finland (1994)

Poland (1994)

Bulgaria (1997)

State own industry commerce

State own industry commerce

State own industry commerce

State own industry commerce

b (SE)

b (SE)

b (SE)

b (SE)


0.05 (0.02)
0.10 (0.02) ns ns ns ns ns ns
0.06 (0.02) ns ns ns ns 0.17 (0.03)

ns ns ns ns
0.13 (0.03) ns ns ns ns ns ns ns
0.06 (0.03) 0.21 (0.06)

0.14 (0.03)
0.05 (0.02) ns ns ns ns ns ns ns ns ns ns ns 0.17 (0.04)

0.15 (0.04) ns ns ns
0.15 (0.05) ns ns ns ns ns ns ns ns 0.10 (0.04)

0.34 (0.03)

0.24 (0.05)

0.35 (0.04)

0.42 (0.05)

0.41 (0.03)

0.39 (0.03)

0.26 (0.02)

0.24 (0.03)

0.50

0.49

0.43

0.38

2,368

1,697

2,105

1,240

ns – Coefficient not significantly different from zero at p ¼ 0.05. Note: Estimates from multisample simultaneous analysis in four countries – factor loadings on dependent variables constrained to be equal across countries. Source: ISEA 1994/1997. a Data ‘‘standardized to a common metric’’ (Jo¨reskog & So¨rbom, 1993, pp. 266–271).  Coefficients significantly different from zero at po0.05 level.

Before proceeding to the discussion of the effects of attitudes to subsidies on support for government ownership the next section presents details of measurement and average public support for regulating consumer prices and labor markets.

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Attitudes to Subsidies Question wording and order were the same in all countries. The first set of questions read: To keep prices low, should the government subsidize the production of (a) Electricity? Yes, definitely Yes, probably Mixed feelings, Yes and No No, probably not No, definitely not (b) Subsidize basic foods? (c) Subsidize construction of houses and flats? (d) Subsidize doctors and hospitals to keep charges low?

(Scoring) (100 points) (75 points) (50 points) (25 points) (0 points) (Answers as above) (Answers as above) (Answers as above)

The second set of questions read: Here are some things the government might do for the economy. Are you in favor or againsty (a) Support for declining industries to protect jobs? (Answers as above) (b) Subsidies to money-losing companies to preserve jobs? (Answers as above)

On average, Australians support subsidies much less than do Finns, Poles, or Bulgarians. Nonetheless, there are several similarities across countries. They all offer only moderate support to subsidizing loss-making firms to save jobs. In contrast, the support for subsidized healthcare is strong everywhere, notably stronger than approval of subsidized housing or food. People in all four countries favor subsidies to consumer goods more than job protection schemes (with the exception of support for jobs in declining industries in Australia). In all four countries attitudes to subsidies are similarly structured, as shown by confirmatory factor analysis (Tables B.3 and B.4 in Appendix B). Support for consumer subsidies enhances support for government ownership in all four countries, net of many other influences. Support for

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255

employment schemes also enhances support for government ownership. There is, however, a marked difference in the magnitudes of the subsidy effects between the West and the East. The attitudes of Poles and Bulgarians toward government ownership depend strongly on maintaining employment levels in the less viable sectors of the economy: 0.35 in Poland28 and 0.42 in Bulgaria (Table 7). Economic efficiency comes second. In Australia and Finland, the order of importance is reversed: Perceptions of efficiency matter more.

Subsidies, Efficiency and Ideals about Ownership of Industry and Commerce Desirability of economic efficiency can shift the desires for ownership in the economy from largely cold feelings about government enterprise to mixed feelings in Australia and Finland and from mixed feelings about government-owned firms to warm feelings in Poland and Bulgaria. Thus, the model employed here explains a part of but not all the differences in the desirability of government ownership between the countries. Because in the analysis in this paper the results of the structural equation model and an analogous OLS model do not differ substantially,29 I turn to OLS regression to provide a clear and brief summary of how views on subsidies and efficiency change attitudes to ownership. Table 8 gives the predicted scores of support for government-owned industry and commerce of a man, aged 45, who lives and works in a city, and has 11 years of education. His family income amounts to about 150% of blue-collar wages in his country, he works as an employee in a private enterprise and has a middling evaluation of his social standing, which reflects occupational status of his job. I follow his support for government ownership of industry and commerce according to several scenarios. First, I assume that this person views very favorably the efficiency of government-owned enterprises giving them a score of 100 – the maximum support, but has no strong views about the desirability of subsidies to basic consumer goods (score 50), or about subsidies to jobs protection schemes (score 50). Such a person in Australia would give about 55 points support for government ownership of industry (Table 8, panel 1, row 1a) which is about ‘half private half government-owned’ preference. In Finland, such a person’s support would offer 56 points for government businesses – almost the same as in Australia. A Pole with identical social characteristics would give 69 points of support for government ownership. A Bulgarian would

256

Table 7.

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Percentages Supporting Government Subsidies to Consumer Prices, Subsidies to Protect Jobs.

Panel 1: Australia 1995 Consumer price subsidies to Electricity (%) Basic foods (%) Housing (%) Healthcare (%) Job-protection subsidies to Loss-making firms (%) Declining industries (%) Panel 2: Finland 1994 Consumer price subsidies to Electricity (%) Basic foods (%) Housing (%) Healthcare (%) Job-protection subsidies to Loss-making firms (%) Declining industries (%)

Yes!! (100)

Yes (75)

?? (50)

No (25)

No!! (0)

11 7 6 19

36 28 26 51

22 23 25 15

26 36 36 13

5 7 8 4

2 7

11 33

28 29

48 26

12 5

18 23 28 64

41 44 51 32

17 9 8 1

18 19 11 2

6 6 3 1

11 21

41 40

12 11

23 16

13 12

Mean (0–100)

54 55 48 47 67 44 36A 52 72 62 65 72 89B 56 54 60

N

2,368 2,371 2,362 2,368 2,329 2,341

1,698 1,704 1,705 1,708 1,700 1,704

Panel 3: Poland 1994 Consumer price subsidies to Electricity (%) Basic foods (%) Housing (%) Healthcare (%) Job-protection subsidies to Loss-making firms (%) Declining industries (%)

34 29 35 62

41 39 42 32

9 11 11 3

10 15 9 2

6 6 3 1

7 28

17 34

18 17

33 15

25 7

76 72 68 74 88 51 37A 65

Panel 4: Bulgaria 1997 Consumer price subsidies to Electricity (%) Basic foods (%) Housing (%) Healthcare (%)

56 44 31 70

21 26 22 23

8 13 20 4

6 9 16 1

6 9 11 2

76 79 72 61 90B

1,170 1,185 1,122 1,202

Job-protection subsidies to Loss-making firms (%) Declining industries (%)

18 38

14 25

17 18

23 12

29 8

55 42 68

1,144 1,179

 Means different significantly for each pair of countries at po0.05 level. A B

Means not different significantly between Australia and Poland. Means not different significantly between Finland and Bulgaria.

1,992 2,035 1,994 2,076 1,924 1,988

Public Attitudes to Economic Policy in East and West

Table 8.

Predicted Support for Government Ownership of an Idealtypical Respondent.

An ideal-typical respondent: a male, aged 45, working and living in an urban area, with 11 years of education, family income equal to 150% of blue-collar worker’s wages in his country, private sector employee with middling occupational status job, who places himself in the middle of social hierarchy and does not supervise anyone at work

His support for state ownership of industry and commerce if he: 1a) views public enterprises as much more efficient than private enterprises 1b) views private firms as much more efficient than public enterprises 1c)

difference between person 3a and 3b

His support for state ownership of industry and commerce if he: 2a) views public enterprises as much more efficient than private enterprises, strongly supports subsidies to prices of basic consumer goods and government subsidies aimed at job protection 2b) views private firms as much more efficient than public enterprises strongly opposes subsidies to prices of basic consumer goods and government subsidies aimed at job protection 2c)

257

difference between person 2a and 2b

His support for state ownership of industry and commerce expressed in points (0 ¼ all privately owned; 100 ¼ all government owned)

Australia 95

Finland 94

Poland 94

Bulgaria 97

55

56

69

67

28

30

50

47

27

26

19

20

68

64

85

87

6

7

34

30

62

57

51

57

Source: ISEA 1994/1997.

support state ownership with 67 points. Thus, scores are similar in the two post-Communist countries but significantly higher than the corresponding ones in the West (panel 1). In Australia, a view that government business enterprises are efficient enhances support for government ownership of business by 27 points. It has a similar effect for an ideal-typical Finnish respondent (26 points). By contrast, in Poland the criterion of economic

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efficiency changes support for public ownership by only 18 and in Bulgaria by 20 points. Panel 2 has the predictions for pairs of ideal-typical men: two Australians, two Finns, two Poles, and two Bulgarians, who differ not only in their subjective evaluations about the efficiency of enterprises but also have extremely polarized views on subsidizing jobs in declining parts of the economy and subsidizing prices of consumer necessities (rows 2a and 2b). The person in row 2a is a strong supporter of subsidies (giving them the maximum 100 points of support) and thinks that efficiency of governmentowned firms definitely exceeds efficiency of private companies (100 points). A person with extremely ‘socialist’ views would be inclined to support government-ownership in any of the four countries, yet in the two established democracies the strength of his support would oscillate about 65 points (68 and 64 to be exact), while in the post-Communist countries the support for government sector given by a strong ‘socialist’ would be 85 points – about a fifth of a range more. On the other extreme, an Australian or a Finn who opposes subsidies and views government sector as largely inefficient (scores 0 for all items) would want almost exclusively private ownership of the ‘traditional’ industries in the economy. Yet a Pole or a Bulgarian with a negative attitude to subsidies and an unfavorable view of the efficiency of government enterprises would still opt for quite a few of government enterprises in the ‘traditional’ sector of the economy.

THEORETICAL IMPLICATIONS This analysis suggests that none of the theories can alone provide a satisfactory explanation of the patterns found. These classic, mutually exclusive arguments cannot successfully compete with one another in a manner that eliminates all but one scenario. To a varying degree some but not other predictions of neo-liberalism, self-interest, and historical legitimacy are supported. This calls for future developments of more complex, multidimensional yet rigorous30 theoretical approaches. The universally unfavorable view of government business efficiency and the link between these perceptions and support for ownership fits the prediction of the neo-liberalist theory (Table 1, column A). It is important to note that these perceptions are strikingly similar in four very different societies.

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Historical legitimacy predictions expected greater variation in perceptions due to experiences and tradition (Table 1, column C). The historical legitimacy arguments predicted that the publics in the formerly Communist countries would want more government protection and subsidies by virtue of having lived so long in the system where these institutions prevailed. While the evidence is inconsistent with viewing historical legitimacy as the main force behind perceptions and attitudes to ownership, it revealed that nation-specific historical trajectories are relevant. In line with the historicallegitimacy prediction, the elderly in the two transforming countries view public-sector efficiency substantially more favorably than the young. Market-culture predictions (Table 1, column D) are close to the situation in the West, but far from the situation in the East, because they predicted (on other, than historical-legitimacy grounds) favorable perceptions of the economic efficiency of the government sector in the transforming societies. Thus it seems that contrary to market-culture explanations, perceptions of efficiency, attitudes to ownership and desirability of subsidies cannot be mapped as, either pro- or anti-market, cultural predispositions. The relevance of the self-interest argument (Table 1, column B) is shown by omnipresent strong effects of the employment sector, occupation and in some countries ownership of the means of production (Table 4). The effect of public sector employment corroborates Dahrendorf’s claim that government-sector employees wish to preserve their status quo and thus believe that their sector is economically viable. More than one theory predicted differences in perceptions of economic efficiency due to levels of education, and the self-interest argument on its own cannot explain why the education effects are so large compared with most other aspects of social class. Possibly education facilitates understanding and internalization of the neo-liberalist vision of the world economy and its mode of operation.31 If we accept that private enterprises are really more efficient, it is possible that the educated have better cognitive skills, which enable them to recognize this fact more readily. Alternatively, if we take as problematic the thesis that private enterprises are more efficient, it is possible that in most cases32 education facilitates acceptance of the neoliberalist logic, to a large extent regardless of social contexts. The bottom line is that although single-issue analyses can lead to unequivocal conclusions, supporting one and rejecting all the other theories, they can be deceptive in their fragmentary approach. Thus, had we stopped at examining only perceptions of efficiency out of the context of other attitudes, we would have observed unanimous agreement with the neoliberalist vision of the world. A slightly more complex model reveals a need

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for a rigorous and more multidimensional theory explicating why public opinion across the globalizing world can at the same time agree that private enterprise is more efficient, and disagree about the extent to which efficiency should be a criterion for ownership distribution and support extensive subsidies of utilities, basic consumer goods and services.

CONCLUSION This paper examined the extent to which the public in Australia, Finland, Poland, and Bulgaria perceive private enterprises as more efficient than government firms. Analyses showed that Australians, Finns, Poles, and Bulgarians all think that private enterprise is much more efficient, in line with neo-liberalist theory. The extent of unanimity here is truly remarkable. People with dissimilar social structural characteristics differ in the degree to which they perceive the superior efficiency of private sector. Governmentsector employees are more likely than private sector employees to see government firms as more productive, flexible and profitable although employees of both sectors find private enterprises generally more efficient,. This effect is very strong and of the same size in all four countries. Support for government ownership requires positive evaluations of the economic efficiency of the government sector. This relationship is similar in all countries, although Australians and Finns tie their support for private or government sectors more strongly to their perceptions of the efficiency of these sectors, than do Poles or Bulgarians. The commonality of the view that private is efficient does not lead to universal support for private ownership, although it enhances warm feelings toward it. People take other issues into consideration and those who think that the government should subsidize consumer goods, utilities, and healthcare, tend to want the government to own more economic resources. Although superior performance of private enterprise is not questioned, citizens of the transforming countries want substantially more government ownership than people in the West. Support for subsidies is strong, especially in the two transforming nations and in Finland, a country with no history of communism, but surveyed at the time of a serious economic crisis. This support sways public preference toward the government sector regardless of its efficiency. Although nobody doubts the link between economic efficiency and private ownership, the public in countries with histories of extensive welfare state and precarious positions in the globalizing economy is primarily

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261

concerned with stability of labor markets, maintaining accessible education, healthcare, and basic consumer goods. Hence, the relatively strong link between endorsement of job subsidies and support for government ownership in the East. Economic efficiency is important, but comes second. This analysis sheds some light on the relative importance of the issue of economic efficiency in the political discourses of the West and the East. Maintaining stability of employment and wage levels is closer to the hearts of people in transforming countries, although they do not question the validity of concerns about economic growth and efficiency. Thus, arguments emphasizing the priority of policies aimed at achieving economic efficiency are likely to be less appealing to the electorates of Eastern Europe than to their counterparts in the West. This does not necessarily attest to ‘‘trained incapacity’’ of the post-Communist populace, but appears to be more like concerns voiced in other nations with a history of extensive welfare-state provisions that experienced instability of labor market conditions due to changes in the world economy, such as Finland. Finally, although positive views about private enterprises and reserved attitudes to subsidies lead public everywhere to favor private ownership, the transforming nations still hold significantly more pro-government views. Conceivably this lingering preference is not simply an artifact of long-term communist experiences but a judgment made in circumstances in which both international and domestic private entrepreneurs fall short of expectations in creating jobs, maintaining employment, and offering living wages while privatization transfers are often corruption-ridden (Sikora, 2001). The progovernment choice seems to be not ‘‘a call to revive the past,’’ but more ‘‘a cry-out against slipping to the peripheral zones of the world economy,’’ even if nearly everybody accepts the legitimacy of economic goals behind the global privatization trend.

NOTES 1. Although sometimes moderate in size. 2. Public firms can be efficient (Anderson, de Palma, & Thisse, 1997; De Fraja, 1993; Grosh, 1990) as efficiency depends on the method of privatization, political and legal systems and particular features of markets (Estrin & Perotin, 1991; Frydman, Gray, Hessel, & Rapaczynski, 1999). 3. Others include preventing large-scale distortions of the market mechanisms, such as off-setting impact of collapsing sectors of monetary as well as labor market. 4. I am unable to model simultaneous causation between attitudes to efficiency and ownership, as no theory predicts different effects of structural variables on these

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two attitudes. The conditions for the identification of reciprocal-causation models with two dependent variables require non-identical sets of independent variables for each dependent one. 5. Alternatively, the causal relationship could be that ideals about government ownership shape perceptions of efficiency. I do not pursue this possibility, as it is rather implausible and not implied by any theories comparable in significance to the global neo-liberalism. It is also possible, although cannot be tested with the data in hand, that expectations determine to at least some extent the actual performance of private versus government firms. If this is the case then perceptions are not a mere recognition of the facts, but also determinants of objective efficiency of government and private sectors. 6. If private enterprises’ efficiency were very obvious, as the neo-liberalist outlook implies, everybody would perceive it as such and thus there would be only small or no education effects. 7. The social-stereotyping argument also expects government-sector employees to think that government firms are more efficient and private sector employees to think the opposite, on the grounds of perceptive categorization and cognitive economy (Oakes, Haslam, & Turner, 1994). This hypothesis follows an old traditional line that people reduce cognitive dissonance (Festinger, 1957). 8. Here the reasoning is based on the assumption that social stratification effects reflect objective interests. 9. They received most of their education under the Communist system. 10. Market culture is a configuration of orientations and behavioral dispositions that are congruent with institutions of the market economy. It is important to note that if market culture theory predicted the existence of global market culture it would not be empirically distinguishable from global neo-liberalist theory. 11. Multivariate analyses exclude 3% of Australians, 1.3% of Finns, 1% of Poles and 2.6% of Bulgarians who did not answer half or more attitudinal questions, leaving 7,410 cases. 12. Ideally, I would have liked the proportion of enterprises owned by the state expressed in percentages, but there are serious problems involved in an attempt to compile a simple summary of proportions of public and private ownership. Mayer (1989; see pp. 86 and 90 in Organization for Economic Co-operation and Development, 1996; World Bank, 1995). 13. Yet not as wealthy as Japan or the U.S.A. 14. All four countries experienced privatization and deregulation during the 1990s although their scope and degree of success has varied. While Bulgaria and Poland privatized their core industries and commerce, Australia attempted to privatize some electricity, old age homes and health insurance and Finland postal services, childcare and some health services (see ‘‘KILPA Project’’ in Heikkila¨, 1997). 15. Within first 6 years of the 1990s private sector in Poland doubled its output from 28% to 55% of all production. Private sector employment grew at a slower pace from 47% in 1989 to 63% in 1995. 16. I treat my attitudinal variables, measured by Likert-type scales as interval and estimate models with the use of maximum likelihood estimation method. Some argue that treating Likert-type scales as interval scales is inappropriate and leads to a bias (Carroll, 1961; Jo¨reskog & So¨rbom, 1988; Wright, 1996). Instead polychoric

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correlations, based on the assumption that a latent variable measured by several indicators has a continuous and normal distribution are recommended. Thresholds or cut-off points are estimated, which are the function of frequencies of answers falling within each category. The argument is that distances between categories are not equal, they depend on frequencies of each answer. In case of cross-country comparative analysis this calls for decisions about frequencies of which country to use as the base for threshold estimation. The common solution is to use pooled frequencies but here one deals with four rather different countries. Therefore it is by no means clear whether relying on pooled frequencies would result in less bias than treating Likert categories as equal intervals with the ‘‘no government ownership’’ category as a zero point. Moreover, the use of correlation matrices in comparative analysis poses difficulty as analysis should be based on covariance matrices rather than correlation matrices (Bollen, 1989). Some researchers also use the weighted least-squares estimation, which has weaker distributional assumptions (Browne, 1984); yet in practice, for large models with many variables, it encounters computational problems (Bollen, 1989, p. 432). Therefore, I estimated my models with the use of maximum likelihood estimation and compared the standard errors with bootstrap estimates of standard errors to check for bias due to departure from normality (results available upon request). I prefer this technique to ordered multinomial logit models (Agresti, 1996), because they do not correct for measurement error – a major weakness of models with many attitudinal items. 17. It uses all information in the data and requires less rigid assumptions about randomness of missing data patterns compared with listwise or pairwise deletion methods (Rubin, 1976). 18. Effects of social stratification on (1) attitudes to subsidies of consumer necessities and (2) attitudes to subsidies for job schemes and (4) attitudes to government ownership of industry and commerce are available upon request. 19. Other studies asked questions about privatization with potential interpretation problems: Is creation of a market economy good or bad? Is speed of privatization of state enterprises too fast or too slow? Hayo (1997, p. 87) suspects that in some Eastern European countries the concept of ‘‘free market’’ is equivalent to ‘‘high living standards.’’ 20. As the number of non-redundant elements in the covariance matrix of the observed variables is just equal to the number of the estimated parameters in the model. 21. The data were turned to Z-scores in a pooled file – ‘‘standardized to a common metric’’(Jo¨reskog & So¨rbom, 1993, pp. 266–271). 22. Estimations separately in each country are available upon request. Within each country, the parameter estimates are also of similar magnitude, which confirms that they measure one underlying concept. 23. The range of 0.05–0.08 is purely arbitrary and does not represent any hard cutoff points. The smaller the RMSEA value the better. 24. Despite very rapid divestiture, the public sector in Poland and Bulgaria was larger in 1990s than in Australia or in Finland. By the end of the 1980s, the Australian public sector was concentrated in public utilities: electricity, water, gas supplies, and communication services. It accounted for about 10% of GDP (Marsden, 1998). In Finland, the government owned enterprises in more industries

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(Tilastokeskus, 1997, p. 166). The 23% public sector contribution to the 1994 GDP was twice as large as in Australia, but half the size of the corresponding figures in Poland and Bulgaria (Tilastokeskus, 1995). In Poland, the public sector accounted for 43% in 1994 (G"o´wny, 1996) and in Bulgaria for 53% of GDP in 1995 (Natsionalen Statisticheski Institut, 1997). 25. The model was estimated on data ‘‘standardized to a common metric’’ (Jo¨reskog & So¨rbom, 1993, pp. 266–271) to achieve comparability between variables of different metrics. 26. Results available upon request. 27. Analysis of attitudes to ownership of mass media, education, healthcare and custodial care, which are separate dimensions and have been analyzed elsewhere (Sikora & Kelley, 1999). 28. Large standard error of the coefficient in Poland indicates it is not really greater than the coefficient in Australia, but it is larger than the coefficient depicting the effect of attitudes to job subsidies in Finland. 29. The difference between SEM model and OLS model is the correction for the measurement error on the attitudinal items. 30. Theories producing testable predictions. 31. So that even those who want some government ownership agree that in terms of profitability, productivity, and flexibility private enterprises tend to outperform government-owned enterprises. 32. It is hard to overlook the educated opposed to the ideology of neo-liberalism and active in anti-globalization movements around the world. 33. All measured by sets of dummies without assumption about rank.

ACKNOWLEDGMENT I thank M.D.R. Evans, Jonathan Kelley, Larry Saha, Krzysztof Zago´rski, Kazimierz M. Slomczynski, and other colleagues from RC-28 for comments on earlier drafts of this paper. An earlier draft of this paper also benefited from the incisive comments of the Editor and Anonymous Reviewers.

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APPENDIX A. MEASUREMENT OF SOCIAL LOCATION Petty Bourgeoisie (self-employed without employees) and Owners (capitalists in Marx’s class schema) are defined as self-employed in non-farm occupations; they are scored 1 and all others 0. Although there are not many in any of the samples, I include them separately in the model, as they are distinguished in the original class schema. Supervisors are scored 1 for higher level supervisors, 0.5 for basic supervisors. All others are scored 0. Respondents who were not in the labor force answered this question about their last job. Subjective class identification is measured by the ‘‘scalometer’’ format question scored from 1 to 100 at equal intervals: In our society there are some groups that tend to be toward the top and groups that tend to be toward the bottom. Below is a scale that runs from top to bottom. Where would you put yourself on this scale? Top

Bottom

& & & & & & & & & &

The highest class received the highest score. Farmer owners of the farm (and their spouses if they also work on the farm) are coded 1, all others 0.

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Public sector employees are coded 1 and others 0. People who are not in the labor force were asked this question about their last job. Public sector employees are employees of central and local government administration as well as employees of government-owned enterprises. Education is in years with tertiary qualifications scored as the number of years required to obtain them. Occupation refers to present occupation for those currently employed, or to past occupation for those not now employed. In Australia some 5% of respondents had no codable occupation and are treated as missing data. Including a ‘‘no occupation’’ dummy variable in the analysis made no significant difference to the substantive results in Australia. In Finland some 11% of respondents had no codable occupation, in Bulgaria about 8% and in Poland about 7%. Including the dummy ‘‘no occupation’’ made no significant difference to the substance of the results (results available on request). In Australia occupations were initially coded by the four-digit Australian Standard Classification of Occupations (Australian Bureau of Statistics, 1991); in Finland, Bulgaria and Poland by the International Standard Classification of Occupations 1988 (International Labor Office, 1990). Then occupations were recoded into the 14 categories of Treiman’s (1977, pp. 203–208) International Standard Classification of Occupations and thence into Kelley’s (1990a, pp. 344–346) Worldwide Status Scores, which are conceptually similar to Duncan’s SEI scores. Professionals received a score of 100, Administrators 75, Technical occupations were given a score of 70. Higher clerical occupations were scored 60, higher sales occupations 51, routine clerical jobs 38, and routine sales jobs 32. Skilled manual workers were scored 37, skilled service workers 33. Semi-skilled workers were scored 24 and unskilled service workers 14. Finally, farmers were given a score of 10 and farm laborers 0. Kelley arrived at these scores by relating the occupations of respondents in 16 countries to their education, income, and their father’s occupation33 by canonical correlation. Family Income is measured in local currency expressed as a ratio to the average earnings of a full-time blue-collar worker (for comparability between nations). For example in Australia the average earnings of a full-time blue-collar worker in the 1995 ISEA were about A$ 25,500. Therefore, for a respondent who reported his annual family income as A$ 51,000, the ratio score is 2 because A$ 51,000/A$ 25,500 ¼ 2. Age is measured in years. Male is scored 1 for men, 0 for women.

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Urban residence is scored 1 for anything from country towns (up to 20,000) to a metropolitan areas of over 500,000 inhabitants, 0 for rural denoted by ‘‘A farm, property’’ or ‘‘A village’’ (1,000 or fewer people). Working is scored 1 for people in the labor force and 0 for all others. I include in the labor force all who have full-time or part-time jobs or are actively looking for work.

APPENDIX B. DESCRIPTIVE STATISTICS AND ADDITIONAL MULTIVARIATE ANALYSES Table B.1.

Social Structural Variables – Descriptive Statistics. Australia

Age Male Urban resident Working Education Family income Farmer State employee Occupational status Owner Petty bourgeoisie Subjective class Supervisor

Finland

Mean Std E

N

48.88 15.8 0.5 0.5 0.89 0.32 0.64 0.48 11.9 3.02 1.88 1.63 0.03 0.18 0.35 0.48 52.8 27.73 0.05 0.21 0.08 0.27 59.4 16.87 0.28 0.38

2,357 2,357 2,296 2,310 2,438 2,134 2,322 2,054 2,322 1,972 1,972 2,302 1,993

Mean Std E

Poland N

Mean Std E

Bulgaria N

Mean Std E

N

42.85 14.92 1,689 47.14 16.75 2,126 50.15 17.13 1,271 0.52 0.5 1,694 0.45 0.5 2,127 0.48 0.5 1,273 0.7 0.46 1,694 0.61 0.49 2,126 0.66 0.47 1,273 0.62 0.48 1,698 0.56 0.5 2,085 0.54 0.5 1,225 11.39 3.73 1,720 10.19 3.2 2,126 10.63 3.3 1,273 2.24 1.64 1,453 1.61 1.56 2,056 1.8 2.28 1,134 0.06 0.24 1,535 0.15 0.36 1,984 0.01 0.1 1,173 0.35 0.48 1,472 0.61 0.49 1,958 0.77 0.42 1,171 46.7 26.98 1,535 36.41 25.34 1,984 39.64 30.1 1,173 0.06 0.23 1,459 0.04 0.2 1,922 0.03 0.16 1,159 0.03 0.16 1,459 0.06 0.23 1,922 0.03 0.18 1,159 45.22 19.04 1,682 36.53 22.37 2,101 25.3 18.87 1,206 0.22 0.33 1,489 0.13 0.28 1,956 0.11 0.26 1,149

Table B.2. Goodness of Fit Indices for Confirmatory Factor Analyses of (1) Perceptions of Efficiency of State versus Private Enterprises, (2) Support for State Subsidies to Consumer Goods (3) Support to Job Subsidies (4) Support for State Ownership of Industry and Commerce. Estimations Simultaneously on 4 Latent and 14 Measured Variables.

I. Independence model 1. Factor loadings constrained to 0

N

w2

df

7,410

32,882

364

CFIa

0

RMSEAb

0.110

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Table B.2.

II. One-factor model 2. Factor loadings vary across countries Australia 1995 Finland 1994 Poland 1994 Bulgaria 1997 3. Factor loadings invariant III. Four-factor model 4. Factor loadings vary across countries Australia 1995 Finland 1994 Poland 1994 Bulgaria 1997 5. Factor loadings invariant

(Continued ).

N

w2

df

CFIa

RMSEAb

7,410

11,682

308

0.650

0.071

2,368 1,697 2,105 1,240 7,410

3,727 2,134 3,013 2,808 12,614

77 77 77 77 350

0.669 0.695 0.626 0.604 0.623

0.055 0.042 0.043 0.066 0.069

7,410

1,736

284

0.955

0.026

2,368 1,697 2,105 1,240 7,410

565 247 405 519 2,910

71 71 71 71 326

0.955 0.974 0.990 0.935 0.921

0.054 0.038 0.047 0.029 0.033

Source: ISEA 1994/1997. a Comparative Fit Index (Arbuckle, 1997, pp. 565–566). b Root Mean Square Error of Approximation (Arbuckle, 1997, p. 558).

Table B.3.

Goodness of Fit Indices for Confirmatory Factor Analyses of Support for State Subsidies.

I. Independence model 1. Factor loadings constrained to 0 II. One-factor models 1. Factor loadings vary across countries

N

w2

df

CFIa

RMSEAb

7,410

11,700

60

0

0.158

Reject

7,410

1,595

36

0.860

0.076

Reject

Conclusion

Public Attitudes to Economic Policy in East and West

Table B.3.

Australia 1995 Finland 1994 Poland 1994 Bulgaria 1997 3. Factor loadings invariant III. Two-factor models 4. Factor loadings vary across countries Australia 1995 Finland 1994 Poland 1994 Bulgaria 1997 5. Factor loadings invariant

273

(Continued ).

N

w2

df

CFIa

RMSEAb

2,368 1,697 2,105 1,240 7,410

689 219 399 288 1,958

9 9 9 9 54

0.848 0.893 0.835 0.880 0.829

0.179 0.117 0.144 0.158 0.069

7,410

362

32

0.970

0.037

2,368 1,697 2,105 1,240 7,410

115 73 74 99 700

8 8 8 8 50

0.976 0.967 0.972 0.961 0.941

0.075 0.069 0.063 0.096 0.042

Source: ISEA 1994/1997. a Comparative fit index (Arbuckle, 1997, pp. 565–566). b Root mean square error of approximation (Arbuckle, 1997, p. 558).

Conclusion

Reject

Acceptable but not best

Accept

274

Table B.4. Unstandardized Factor Loadings from Maximum Likelihood Confirmatory Factor Analysis – 2 Factor Solution – Multisample Simultaneous Estimates and Estimates Separately in Each Country.

State subsidize electricity State subsidize basic foods State subsidize housing State subsidize hospitals State subsidize loss making firms State subsidize declining industries

0.68 0.71 0.62 0.45

Multisample Analysisa

Australia 1995 N ¼ 2,368

Finland 1994 N ¼ 1,697

Poland 1994 N ¼ 2,105

Bulgaria 1997 N ¼ 1,240

1

1

1

1

1

2

(0.01) (0.01) (0.01) (0.01)

0.67 0.69 0.66 0.62

2

(0.02) (0.02) (0.02) (0.02)

0.61 0.65 0.53 0.32

2

(0.03) (0.03) (0.02) (0.02)

0.68 0.60 0.59 0.47

2

(0.02) (0.02) (0.02) (0.02)

0.76 0.93 0.73 0.45

2

(0.03) (0.03) (0.03) (0.03)

0.61 (0.01)

0.54 (0.02)

0.67 (0.03)

0.55 (0.03)

0.92 (0.05)

0.74 (0.01)

0.68 (0.02)

0.80 (0.03)

0.85 (0.04)

0.67 (0.04)

JOANNA SIKORA

Note: 1 Support versus opposition to state subsidizing consumer prices of necessities. 2 Support versus opposition to state subsidizing parts of economy to protect jobs. a Factor loadings constrained to be equal across countries.