Trust in State and Non-State Actors: Evidence from Dispute Resolution in Pakistan

Daron Acemoglu, Ali Cheema, Asim Khwaja and James Robinson

No 24611, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Lack of trust in state institutions, often due to poor service provision, is a pervasive problem in many developing countries. If this increases reliance on non-state actors for crucial services, the resulting self-reinforcing cycle can further weaken the state. This paper examines whether such a cycle can be disrupted. We focus on dispute resolution in rural Punjab, Pakistan. We find that providing information about reduced delays in state courts leads to citizens reporting higher willingness to use state courts and to greater fund allocations to the state in two lab-in-the-field games designed to measure trust in state and non-state actors in a high-stakes setting. More interestingly, we find indirect effects on non-state actors. After receiving state positive information, respondents report lower likelihood of using non-state institutions and reduce funds allocated to them in field games. Furthermore, we find similar direct and indirect effects on a battery of questions concerning people’s beliefs about these actors, including a decreased allegiance to the non-state actor. We rationalize these results with a model of motivated reasoning whereby reduced usage of non-state institutions makes people less likely to hold positive views about them. These results indicate that, despite substantial distrust of the state in Pakistan, credible new information can change beliefs and behavior. The feedback loop between state ineffectiveness and the legitimacy of non-state actors may be reversible.

JEL-codes: C91 C93 D02 D73 D74 D83 K40 O17 P16 (search for similar items in EconPapers)
Date: 2018-05
New Economics Papers: this item is included in nep-exp, nep-law and nep-soc
Note: PE
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Citations: View citations in EconPapers (5)

Published as Daron Acemoglu & Ali Cheema & Asim I. Khwaja & James A. Robinson, 2020. "Trust in State and Nonstate Actors: Evidence from Dispute Resolution in Pakistan," Journal of Political Economy, vol 128(8), pages 3090-3147.

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Related works:
Journal Article: Trust in State and Nonstate Actors: Evidence from Dispute Resolution in Pakistan (2020)
Working Paper: Trust in State and Non-State Actors: Evidence from Dispute Resolution in Pakistan (2019)
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