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Expropriation, money, and happiness: the impact of state theft in Russia

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Abstract

The historically high prevalence of property extraction in transition nations provides a unique opportunity to explore the intersection of institutional economics and the economics of happiness. This study examines how instances of prior property confiscation affect the self-reported quality of life following political-economic transition in Russia during the early 1990s. Using retrospective data from the Social Stratification in Eastern Europe after 1989 project, we estimate both traditional ordered logit models and random-effects ordered logit models, the latter of which addresses clustering of respondents by region of the country. Our results indicate that prior property confiscation experiences lead to a gap between the probabilities of realizing the extreme values of life satisfaction of 21.1–26.5%-points, with prior property confiscation experiences decreasing (increasing) the probability of greater (lesser) life satisfaction.

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Notes

  1. See https://news.am/eng/news/746073.html.

  2. See https://www.reuters.com/world/europe/putin-ally-suggests-confiscating-property-russian-war-critics-2023-01-13/.

  3. See https://www.rferl.org/a/belarus-law-confiscation-property-unfriendly-actions/32212212.html.

  4. See https://www.hrw.org/news/2018/05/29/qa-syrias-new-property-law.

  5. See https://mei.edu/publications/amid-calls-refugee-returns-assads-property-grab-continues.

  6. Here, the economics and social psychology literatures find common ground. See, for example, Blanchflower and Freeman (1997), Diener and Biswas-Diener (2002), Frey and Stutzer (2002), Di Tella et al. (2003) and Blanchflower and Oswald (2005).

  7. The strongly negative effects of weak property and contracting rights on wealth formation and accumulation are commonly discussed, with Acemoglu et al. (2005) reporting that better institutional protections against expropriation are strongly correlated with higher GDP per capita.

  8. For income, the marginal probabilities for the highest level of reported life satisfaction (“life is much better now”) extend to 0.4 percentage points, while those for the lowest level of reported life satisfaction (“life is much worse now”) extend to − 3%-points. For education, the marginal probabilities for the highest level of reported life satisfaction (“life is much better now”) extend to 0.1 percentage points, while those for the lowest level of reported life satisfaction (“life is much worse now”) extend to − 0.5%-points.

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Acknowledgements

This study did not receive grant funding of any kind. The authors thank an anonymous reviewer for helpful comments on a prior version.

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Authors and Affiliations

  1. Department of Economics, Florida Atlantic University, Boca Raton, FL, USA

    Steven B. Caudill & João Ricardo Faria

  2. Center for Economic Education, Columbus State University, 4225 University Avenue, Columbus, GA, 31907, USA

    Franklin G. Mixon Jr.

  3. Smith & Nephew, Memphis, TN, USA

    Elliott H. Young

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  1. Steven B. Caudill
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  2. João Ricardo Faria
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  3. Franklin G. Mixon Jr.
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  4. Elliott H. Young
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Correspondence to Franklin G. Mixon Jr..

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Caudill, S.B., Faria, J.R., Mixon, F.G. et al. Expropriation, money, and happiness: the impact of state theft in Russia. Empir Econ 66, 483–501 (2024). https://doi.org/10.1007/s00181-023-02466-y

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