[POSTPONED] Michael Callen (LSE)

Beliefs About Institutions

Abstract: We report results from a large-scale field experiment testing whether beliefs about the durability and inclusiveness of political institutions shape state-building behavior. Theories in political science and economics suggest such beliefs influence actors’ incentives to invest in the state (e.g., North, Wallis, and Weingast 2009; Acemoglu and Robinson 2000, 2006; Olson 1993; Greif 1994), yet there is limited direct measurement—and, to our knowledge, no causal evidence—of this relationship.
We examine this question in Nepal, a country at a critical juncture in its institutional development. Within a single generation, Nepal has undergone a dramatic transformation—from a caste-based monarchy to a constitutional monarchy, a Maoist revolution, and ultimately to a federal democratic republic. While this process introduced sweeping formal reforms, it remains unclear whether citizens and state actors view Nepal’s new institutions as stable and legitimate.
Our focus is on those most directly responsible for building the state: 3,830 local politicians and 572 bureaucrats. We elicit baseline beliefs about political inclusion and stability, then randomly provide accurate information on one of three dimensions: (1) the share of municipal mayors from historically excluded Indigenous (Janajati) groups, (2) the share of women in executive municipal office, and (3) Nepal’s World Bank political stability score. We then measure updated beliefs about current and future constitutional rules—such as executive selection, media freedoms, and minority rights—and observe participation in a real-stakes state-building task: collecting birth, death, and marriage data for a new national civil registration system.
Most respondents underestimated Nepal’s political stability; receiving the World Bank score (50th percentile globally) increased perceived institutional durability and quality and raised task completion from 22% to 26% (p < 0.05). Information about gender and ethnic inclusion also affected beliefs and behavior. Among women, a negative update on representation—relative to constitutional quotas—reduced completion from 23% to 15% (p < 0.05). Among Janajatis, a similar update reduced completion from 24% to 19% (p>0.1). Our results indicate that beliefs about institutions influence investments in the state and suggest value in measuring such beliefs to understand critical junctures in real time.