09:20 - 11:00
Room: Meeting Room 1.1
Chair/s:
Bunyamin Esen
Tomoko Matsumoto - Political Trust and Preferences for Redistribution: Wasteful Spending and Plutocratic Influence
Bunyamin Esen - The Transformation of the Welfare State in the Age of Artificial Intelligence: Adaption Strategies for Redistribution and Institutional Capacity
Eric Arias - Revisiting the Relationship between Access to Credit and Support for Redistribution
Sébastien Cuenot - Nation over Class? How patriotism boosts redistributive preferences and alters the income-based cleavage in Southeast Asia
 
Submission 166
Revisiting the Relationship Between Access to Credit and Support for Redistribution
Panel.1-S-2
Presented by: Eric Arias
Eric Arias
NA
Does access to credit reduce support for redistribution? Existing research argues that individuals who can borrow are less supportive of the welfare state, but these studies have focused on advanced economies (with well-developed private credit markets). In this paper, we focus on developing economies, where the strength of private credit markets varies across countries. We exploit plausibly exogenous variation in the U.S. federal funds rate to examine the causal effect of access to credit on redistributive attitudes. We theorize that individuals in countries with strong private credit markets will reduce their demand for redistribution as credit access increases, but individuals in countries with weak private credit markets will prefer greater welfare spending because of the expanded fiscal capacity of the public sector and political distrust. We find strong empirical support for our theory, nuancing accounts linking access to credit to diminished support for redistribution.