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

67 Pages Posted: 25 May 2018 Last revised: 7 Oct 2021

See all articles by Daron Acemoglu

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Ali Cheema

Lahore University of Management Sciences

Asim Ijaz Khwaja

Harvard University - Harvard Kennedy School (HKS); Center for Research on Pensions and Welfare Policies (CeRP); Bureau for Research and Economic Analysis of Development (BREAD); National Bureau of Economic Research (NBER)

James Robinson

University of Chicago - Harris School of Public Policy

Date Written: May 2018

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.

Suggested Citation

Acemoglu, Daron and Cheema, Ali and Khwaja, Asim Ijaz and Robinson, James, Trust in State and Non-State Actors: Evidence from Dispute Resolution in Pakistan (May 2018). NBER Working Paper No. w24611, Available at SSRN: https://ssrn.com/abstract=3182210

Daron Acemoglu (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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Ali Cheema

Lahore University of Management Sciences ( email )

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Asim Ijaz Khwaja

Harvard University - Harvard Kennedy School (HKS) ( email )

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Center for Research on Pensions and Welfare Policies (CeRP) ( email )

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Bureau for Research and Economic Analysis of Development (BREAD) ( email )

Duke University
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National Bureau of Economic Research (NBER) ( email )

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James Robinson

University of Chicago - Harris School of Public Policy ( email )

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