The "Meet Our Researchers" series showcases the incredible scholars at Stanford’s Center on Democracy, Development and the Rule of Law (CDDRL). Through engaging interviews conducted by our undergraduate research assistants, we explore the journeys, passions, and insights of CDDRL’s faculty and researchers.

How can empathy and perspective-taking be implemented on a larger scale, and how can they be used to address the challenges we see in the world today? 

Well, this isn’t something you can legislate. You can’t tell politicians to force people to imagine someone else’s life. The real audience for this work is advocacy organizations like the United Nations High Commissioner for Refugees (UNHCR) or the International Rescue Committee (IRC), because they’re already doing it. They use storytelling and humanizing narratives in their campaigns all the time. 

It’s really hard, though, because we’re living in what people call the attention economy, which is driven by social media. Everything is about visibility, clicks, and headlines, and there’s always a new crisis. It becomes difficult for people to hold on to empathy for more than a moment because the focus is constantly shifting from one story to another. Even if a big influencer were to advocate for refugees or displaced communities, another could just as easily come along and dehumanize them or spread misinformation that undermines this. So it becomes this constant tug-of-war between empathy and fear, between humanizing and othering. 

With that being said, I think social media can also be used as a really powerful tool for sharing stories and reaching people who might not otherwise engage with these issues. It gives us a space to humanize experiences and make them visible at a scale that wasn’t possible before. The challenge is figuring out how to use these platforms not just to get attention for a moment, but to actually build connection and understanding that last beyond a single news cycle.

How does this translate into policy? 

Ultimately, I do think that public opinion matters for policy. The way people feel about migration or refugees — whether they see them as part of the community or as outsiders — shapes which policies are politically possible. And today, public opinion is shaped more than ever by social media. It’s not just voters who are influenced by online narratives; policymakers and donors are too. That’s why empathy and communication are central to policymaking, as social media now plays such a major role in shaping how both the public and those in power think and respond.

Can you tell me more about your work at the Immigration Policy Lab? 

I just joined as Faculty Co-Director and am currently leading two key projects focused on migration and development, particularly in the Global South. 

One major area is climate migration, understanding how environmental shocks affect migration decisions. The people most vulnerable to climate change are often the poorest. We’re trying to understand how they perceive risk, what strategies they use to survive, and when migration becomes an option. We’re currently raising funds to collect data in places like Colombia and rural Guatemala.

Another big project focuses on return migration, looking at people who have been expelled or deported, as well as those who self-deport. We’re building partnerships with organizations like Mercy Corps and the IRC to study how they reintegrate, what challenges they face, and whether existing programs are actually helping.

What have been some of the most challenging aspects of conducting research in this field, and how did you overcome them?

I would say interest and funding. Studying migrant integration is not popular these days; it feels like everyone is obsessed with AI or how technology can solve problems. That also creates challenges with funding and resources, especially from federal sources, because projects like ours require long-term fieldwork and collaboration, which are expensive and time-intensive. 

That said, I’ve been really fortunate to find a strong community and support system here at Stanford and at CDDRL. Being part of this environment has enabled me to connect with others who care about these issues and to find the resources needed to keep the work going.
 

What gaps still need to be addressed in this research, and what do you hope to study in the future?

I think a big gap that hasn’t been studied enough is who actually engages with empathy-based initiatives in the first place. We know that when people are asked to imagine themselves in someone else’s shoes, they become more open and inclusive. But who is voluntarily clicking on those websites or reading those stories? Probably people who already care. That’s a limitation, because it means we might just be reinforcing empathy among those who already have it.

What I’d love to study next is how to reach people who don’t. People who avoid these stories or who hold more exclusionary views. What kinds of messages or media could reach them? Could framing, visuals, or certain messengers make a difference? Understanding that is crucial for figuring out how to scale empathy beyond its existing audiences.

If you had to give one piece of advice to students who want to get involved in this kind of research, what would it be?

Take my class next quarter! We talk about all sorts of issues related to migration and inclusion. But seriously, get involved early. Try to work as a research assistant, even on small projects. That’s how I got started, by working under a professor who brought me into areas and questions I didn’t think I’d be interested in. Those experiences can completely change your perspective and open doors you didn’t even know existed.

Lastly, what book would you recommend for students interested in a research career in your field?

I’ve heard very good things about The Truth About Immigration by Zeke Hernandez, which is more from an economist’s perspective, and I love Rafaela Dancygier’s Dilemmas of Inclusion, which looks at the challenges left-wing parties face in Europe. They’re the parties of inclusion, but they also have to navigate tensions when the groups they’re including hold more conservative social values. It’s a really interesting read for understanding how inclusion plays out in democratic politics.

Adida’s work highlights how understanding the human side of migration through empathy and perspective-taking can lead to more inclusive policies and stronger communities worldwide.

Motivation & Overview:

Black Americans have long and overwhelmingly supported the Democratic Party, though Donald Trump modestly increased his share of the Black vote in 2024 (15%, up from 8% in 2020). Given this enduring partisan loyalty — and the fact that Democrats generally take more liberal policy positions than Republicans — we might expect a strong overlap between Black Americans’ partisanship and their ideological self-identification. Yet, according to national surveys, up to 50 percent of Black Americans describe themselves as conservative, a pattern many social scientists have treated as paradoxical. 

In “The curious case of Black ‘conservatives’,” Hakeem Jefferson shows that the terms ‘liberal’ and ‘conservative’ are unfamiliar to many Black Americans. Constructing a “Liberal-Conservative Familiarity Scale,” Jefferson finds that Black Americans who are familiar with these ideological labels overwhelmingly identify as liberal Democrats. As such, the canonical liberal-conservative measure — used not only in the American National Election Studies (ANES) but also throughout the social sciences — may be ill-suited to understanding Black political behavior. Jefferson calls on researchers to describe ideological concepts more carefully to respondents and to develop new measures that better capture Black Americans’ political worldviews. 

Prior Research & Jefferson’s Intervention:

Political scientists and other researchers and practitioners have long accepted that the “mismatch” between Black voting behavior (or partisanship) and ideology is real. Some explain this by pointing to the strength of Black racial identity or consciousness: Black conservatives, they argue, are indeed conservative but support Democrats because of a shared commitment to racial progress. Others suggest that Black conservatives who might otherwise support Republicans refrain from doing so because of social costs within their communities. And indeed, experimental research has shown that Black participants are less likely to donate to Republican campaigns if they believe that members of their community will learn of such contributions. Still others emphasize that many Black Americans hold conservative views on social or moral issues, such that their identification as conservative on surveys may reflect those views, which do not necessarily inform their Democratic partisanship and thus help explain the partisanship-ideology mismatch. 

Jefferson acknowledges that there are indeed Black conservatives and that Black Americans who wish to ‘defect’ to the Republican Party may fear the social consequences of doing so. However, he argues that these explanations fall short of accounting for the long-standing mismatch between partisanship and ideology among Black Americans, and that the prevalence of Black conservative Democrats has been dramatically overstated. His argument begins with a striking observation: in 2012, 30 percent rated Barack Obama as conservative and 9 percent said they did not know where to place him ideologically. Conversely, 29 percent rated Mitt Romney as liberal, while 12 percent said they did not know. These patterns suggest that many Black respondents may have less familiarity with ideological concepts than is often assumed. Political scientists, dating back to the 1960s, have cautioned that few Americans, across racial groups, think about politics in abstract ideological terms. That the liberal-conservative measure remains so central to research on public opinion suggests that these early warnings have largely gone unheeded. 

Data & Methods:

Jefferson begins by examining the relationship between partisanship and ideological self-identification over time and across racial groups. From 1972 to 2016, the average correlation between these two measures was .44 for White Americans, compared to just .12 for Black Americans. In 2016, the correlations were .73 and .001, respectively! In other words, among Black Americans, partisanship and ideology were almost wholly unrelated.. 

As shown below, the correlation between partisanship and ideology among White Americans has increased sharply over the past five decades, reflecting the broader ideological sorting of the major parties since the 1960s. By contrast, among Black Americans, the relationship has remained weak and, if anything, has slightly declined over time.
 

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Figure 1. Correlation between ideology and partisanship over time, by race, ANES 1972–2016. Figure 1 displays the correlation coefficient (r) between ideology and partisanship in the ANES over time. The red open dots indicate the r for Black Americans. The black closed dots indicate that for whites. LOESS lines are overlaid in black for white Americans and dashed red for Black Americans.
 

In addition, Jefferson notes that in 2012, 41 percent of Black respondents who were asked to identify their political ideology answered “don’t know,” while 18 percent placed themselves at the midpoint. In total, roughly 60 percent of Black respondents declined to take a clear ideological position. By contrast, only 19 percent of White respondents said “don’t know,” and 24 percent identified as moderate.

To further explore these patterns, Jefferson constructs a five-item Liberal-Conservative (L-C) Familiarity Scale based on whether respondents correctly identified Democrats and Democratic presidential nominees as liberal, Republicans and Republican nominees as conservative, and the Republican Party as the more conservative political party. Respondents who answered all items correctly, demonstrating perfect ideological familiarity. Jefferson finds that the scale exhibits high internal consistency.

The L-C Familiarity Scale serves as Jefferson’s key independent variable, which he theorizes influences how strongly people’s ideological self-placement aligns with their partisan identification. Consistent with this expectation, Black respondents with greater ideological familiarity are more likely to exhibit coherent alignments between ideology and partisanship. As the figure below shows, among Black respondents, higher liberal-conservative familiarity is associated with a lower likelihood of identifying as conservative. In other words, Black respondents who more accurately recognize which parties and candidates are liberal or conservative tend to place themselves further to the left on the ideological scale, where we would expect them to be, given their longstanding support for the Democratic Party. Conversely, Black respondents who identify as conservative and who have a clearer grasp of ideological terms are more likely to identify as Republicans, suggesting that ideological familiarity helps resolve the apparent paradox that has long puzzled political scientists and other researchers.
 

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Figure 3. Liberal-conservative familiarity scores predict ideological identification for Black Americans (top plot), but not white Americans (bottom plot). X-axis presents liberal-conservative familiarity score and the corresponding 95th percent confidence interval. Y-axis indicates the model for predicting ideology (conservative), faceted by race. Model 1 includes controls for age, income, education, gender, economic policy attitudes, social policy attitudes, religiosity, and moral traditionalism. Model 2 includes all of model 1’s variables and feeling thermometers toward Black Americans, white Americans, big business, unions, Hispanics, middle class, and gays and lesbians. Model 3 includes all of model 2’s variables and four averaged questions for office recognition. Model 4 includes all of model 2’s variables and three averaged questions for office recognition. Model 1 includes years 1992, 1994, 1996, 2004, 2008, 2012, and 2016; Model 2 includes 2004, 2008, 2012, and 2016; Model 3 includes 2012; Model 4 includes 2004, 2008, 2012, and 2016. Models 1, 2, and 4 include year-fixed effects. Standard errors are robust SE (HC1) and clustered by year when applicable.
 

White respondents demonstrate much greater familiarity with ideological concepts, yet this familiarity does not predict their ideological self-identification, as it does for Black respondents. Instead, White ideological self-placement is more closely tied to public policy and symbolic issues, such as government involvement in the economy or attitudes toward demographic change.

These results hold even after Jefferson controls for social conservatism (e.g., religiosity), which some have argued helps explain the partisanship-ideology mismatch among Black Americans. They also persist when he controls for the interviewer’s race, addressing the alternative explanation that Black respondents may understate their Republican partisanship to avoid social sanction within their communities.

Findings & Mechanisms:

Jefferson concludes by offering several possibilities for why Black Americans exhibit lower levels of liberal-conservative familiarity. One possibility is that Black and White Americans inhabit different “racialized informational environments.” Political discourse in Black communities may focus more on concrete issues such as racial inequality and systemic injustice, while discourse in White communities may more often invoke ideological labels like “liberal” and “conservative.” Another explanation builds on the idea that the Democratic Party — with which most Black Americans identify — is itself less oriented around ideology and more around social groups and issue bundles, whereas the Republican Party is more explicitly ideological. This may lead to less exposure to ideological terms among Black Americans.

*Research-in-Brief prepared by Adam Fefer.

Motivation & Overview:

The effects of the climate crisis are thought to be extremely far-reaching, from declining economic growth and agricultural productivity to housing displacement and job loss. An important set of consequences are psychological, relating to how climate change can exacerbate anxiety and one’s sense of hopelessness about an uninhabitable future. These psychological impacts are heightened for members of vulnerable and marginalized groups, as well as for those in poor and underdeveloped places that struggle to address climate change.

In “Adolescent psychological health, temporal discounting, and climate distress under increased flood exposure in Bangladesh,” Liza Goldberg and her coauthors examine the psychological well-being of 15 to 18-year-olds in two Bangladeshi cities that have been differentially affected by floods. The authors conduct surveys and focus groups with adolescents in the low-flood-risk capital city of Dhaka and the high-flood-risk city of Barisal. They find that although adolescents in both cities fear the personal impacts of climate change, rates of anxiety and depression are significantly higher in Barisal. In addition, those with anxiety and depression exhibit greater temporal discounting, meaning that short-term consequences are favored over longer-term ones. Discounting is an important — if neglected — consequence because adolescents will emerge as household decision-makers who must plan to adapt to climate change. The article is notable in increasing our knowledge of how floods harm members of an already vulnerable population.

Case Selection and Hypotheses:

Bangladesh is among the world’s most climate-vulnerable countries. This is due to its “deltaic” geography (i.e., its low, flat land, crossed by many rivers) and consequent flood exposure, extreme temperature and humidity, and poor air quality. Barisal — a city of over 500,000 that is roughly 115 kilometers from Dhaka — is highly vulnerable to flooding, as well as being poorer (relative to Dhaka) and limited in its “climate adaptation infrastructure.” Partly for these reasons, rates of migration from Barisal to Dhaka are the highest in Bangladesh. By contrast, Dhaka — the capital city of over 24 million — is less flood-exposed and is slightly wealthier. Respondents in Barisal and Dhaka reported around four floods and one flood per year, respectively.
 

Figure. Study site locations in Bangladesh. Study sites at Dhaka (A) and Barisal (B) are shown in red.
 

The authors hypothesize that Barisal’s greater flood exposure would be associated with more anxiety and depression among its adolescents, and that anxiety and depression would be associated with greater temporal discounting. (In other words, they do not expect that flood exposure would be directly associated with discounting.) In addition, the authors expect that these negative psychological effects would be especially pronounced among poor Bangladeshis, girls, and those with a greater awareness of the climate crisis.

Data and Findings:

The authors surveyed 1200 Bangladeshi adolescents in 24 schools immediately after the flood season, which usually runs from May to September. In addition, 16 focus groups were conducted with around 160 total participants. Adolescents in both cities expressed a high familiarity with climate change. However, and consistent with the authors’ expectations, those in Barisal expressed significantly higher levels of agreement with statements about climate distress. For example 97% of those in Barisal compared to just 68% in Dhaka agreed that “My family’s security will be threatened,” 93% in Barisal and 58% in Dhaka agreed that “The things I most value will be destroyed,” and 98% in Barisal and 67% in Dhaka agreed that “My feelings about climate change negatively affect my daily life.” 
 

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Table 3. Climate distress survey results disaggregated by region.
 

The focus groups corroborated this unequal sense of despair, especially concerning the future and one’s educational and career goals. In Barisal, a boy said, “We expect that we will have to continue withstanding this [flooding] for many years to come,” while a girl said, “I used to want to become a teacher myself, but now I believe I will need to get married immediately after school because my father keeps losing his job during the floods.” By contrast, and because flooding in Dhaka is so infrequent, adolescents did not expect climate change to meaningfully threaten their life trajectories.

In terms of anxiety and depression, 86% of those in Barisal reported anxiety symptoms, compared to 71% in Dhaka, while 98% in Barisal and 88% in Dhaka reported depressive symptoms. After adjusting for factors like sex, wealth, and climate change awareness, the odds of being anxious and depressed in Barisal were nearly twice as high and more than 3.5 times as high, respectively. Across both cities, females were more than 1.75 times as likely to experience anxiety. And the odds of being depressed were over 1.85 times as high for those with a greater awareness of climate change.

Girls in the Barisal focus groups revealed that flooding was linked to domestic violence. Fathers facing financial insecurity were reported to engage in violence against their mothers as a consequence of this stress. As one girl put it, “The floods keep getting worse and worse. So, I may experience even more violence than my mother does.” By contrast, few girls in Dhaka expressed worsening family dynamics, and none reported domestic violence owing to flooding. Adolescents in Dhaka believed that floods in their region were simply too fleeting to result in such abuse.

Finally, only 7% and 6% of adolescents in Barisal and Dhaka showed signs of temporal discounting. However, the odds of discounting were twice as high for those with anxiety and almost 2.5 times as high for those with depression. The authors find some evidence of discounting in the focus groups, but no meaningful differences across cities. This absence may be due to discounting behaviors emerging around adulthood, which is older than the adolescent study population. Taken together, the authors’ findings imply that mental health support will be essential for those affected by climate change — especially in impoverished areas — to help them manage stress and to improve their ability to plan for the future.

*Research-in-Brief prepared by Adam Fefer.

On October 21, 2025, Ms. Sanae Takaichi, a hardline conservative, became the first female Prime Minister of Japan, marking a historic moment for the country, which has one of the worst records among the world's developed democracies for gender equality. Yet, Takaichi's views on empowering women are complex, and she steps into office at a moment of internal party weakness and intense domestic and regional strategic pressures. On October 28, she will welcome President Trump to Tokyo, where the two leaders will hold a summit meeting.

In the following video explainer, Stanford sociologist Kiyoteru Tsutsui, the Henri H. and Tomoye Takahashi Professor and Senior Fellow in Japanese Studies at the Shorenstein Asia-Pacific Research Center (APARC) and the director of APARC and its Japan Program, discusses Takaichi’s background and rise to power, her cabinet choices, and what they signal for Japan's future. Watch:

Video: Michael Breger

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In the Media

On October 28, 2025, on the heels of the summit meeting of Prime Minister Takaichi and President Trump, Tsutsui joined Scott Tong, host of WBUR's Here & Now, to discuss Takaichi's rise to power and what's next for Japan. Listen:

Motivation

Political parties have long reflected  dividing lines between groups in a society, often called political ‘cleavages’. Examples include workers vs. business owners, Protestants vs. Catholics, and urban vs. rural constituents. Civil society organizations (CSOs) — such as unions, churches, and chambers of commerce — have historically shaped the content and strength of these cleavages.

However, both CSOs and cleavages have changed in recent decades. For one, traditional cleavages have declined in importance, and new divides have emerged, such as between the so-called winners and losers of globalization or between those on one side or the other of the culture wars. In addition, formal CSOs have seen declining membership and reduced political influence, while informal groups and more episodic activism have grown. While CSOs and political parties used to have highly formalized relationships, they now tend to engage with each other more opportunistically and sometimes antagonistically. It seems clear that CSOs continue to influence political cleavages — both old and new — in the 21st century. But how exactly does this occur?

Contribution

In “Cleavage Theory Meets Civil Society,” Alex Mierke-Zatwarnicki, Endre Borbáth, and Swen Hutter examine the varied historical and contemporary relationships between CSOs, cleavages, and political parties in Western Europe. The authors develop a general framework for understanding the relationship between CSOs and cleavage development, providing insights into how contemporary politics reflects long-term changes in the structure of civil society. 

The paper is set against social science research on cleavages, which can be divided into two broad streams. First, classical scholarship emphasized the importance of early 20th-century mass associations, such as unions, in shaping cleavages and party politics. By contrast, newer work, written against the backdrop of a changing CSO landscape, has viewed CSOs as largely irrelevant, arguing that opposition parties shape cleavages via direct interactions with voters. Neither body of previous work provides a compelling framework for understanding how contemporary CSOs — given their fragmentation, informationalization, and politicization -- matter for cleavages.

The authors also shed light on the phenomenon of polarization, which is a key part of democratic backsliding. Indeed, electorates are polarized around several cleavages — economic, religious, and cultural — that populist leaders have used to justify excluding their opponents from politics, portraying them as existential threats to a specific way of life.

Processes and Mechanisms

The authors suggest that cleavage development can be seen as the culmination of three processes, which CSOs may influence in key ways. The first is “group formation,” which concerns how individuals come to identify as workers, congregants, or otherwise. The second process is “political institutionalization,” which entails cleavages being embodied in party competition. The third is “political stabilization,” whereby cleavages are reinforced over time by parties.
 

Table 1. Role of civil society across stages of cleavage development.
 

To understand how CSOs might shape these three processes, the authors outline two mechanisms. The first is “linkage,” whereby CSOs communicate group demands and pressure political parties to represent them. Linkage is hypothesized to be more important during the latter processes of institutionalization and stabilization; it was historically important in group formation but less so today because of the aforementioned decline of formal CSOs.

The second mechanism is “social closure,” which concerns how group boundaries are solidified. CSOs are hypothesized to contribute to social closure by bringing group members together and organizing them around shared demands, increasing their sense of ingroup identification. This mechanism is important for group formation as well as  political stabilization.

CSOs still appear to facilitate linkage and social closure, albeit in different ways than in the early 20th century. For example, CSOs are less likely to have formal links to parties but continue to exert pressure by organizing around individual issues, candidates, and elections. Voters’ relationships to CSOs are also more varied, creating divisions within the electorate between highly-active individuals who have a strong sense of group identity and people who are less ‘anchored’ to the cleavage. The authors also hypothesize that some of these dynamics may produce asymmetric changes across the left and right, as the strength and tactics of CSOs vary.
 

Table 2. Implications of the changing structure of civil society.
 

Cross-National and Case Study Evidence

The authors then analyze cross-national data on political parties and voters in Austria, France, Germany, the Netherlands, and Switzerland. One data source concerns the extent to which political parties are tied to CSOs and whether they receive large-scale CSO donations. A second source looks at whether party supporters are active in CSOs. Preliminary findings point to important differences between old, class-based parties (especially Social Democrats) and newer parties, with the latter much less tied to CSOs. However, within the new party families, Green parties are more tightly linked to CSOs than far-right parties, but there also exists variation within far-right parties. These patterns demand a more fine-grained analysis of specific cases.
 

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Figure 2. Members of civil society organizations among the electorate of political parties in Austria, France, Germany, the Netherlands, and Switzerland.

Note: The figure is based on the Joint EVS/WVS 2017-2022 Dataset (2022). It uses the battery of membership in organizations and partisanship questions. In the WVS, partisanship is measured with ‘Which party would you vote for?’; in the EVS, with ‘Which political party appeals to you most?’ For this figure, the two items are treated as functional equivalents. The percentage of members is calculated from all respondents indicating sympathy towards the respective party.
 

Finally, the authors qualitatively analyze three distinct cases: one New Left party and both old and new far-right populist parties — the German Green Party, the Swiss People’s Party (SVP), and the Alternative for Germany (AfD). Their analysis reveals key differences as regards the importance of CSOs in fostering linkage and social closure. CSOs played a key role in consolidating the Greens and SVP, whereas in the case of AfD, antipathy from German CSOs helped generate a more outsider identity.

The Greens emerged via linkages with left-libertarian social movements in the 1970s and 80s. This included groups supportive of environmental protection and feminism and opposed to nuclear proliferation. CSOs provided ideas and personnel, which helped build a sense of social closure among party supporters. This identity still persists in spite of the subsequent fragmentation of civil society.

By contrast, SVP emerged through connections to Swiss farmers' associations, rural economic networks, and local interest groups. SVP has been radicalizing since the 1990s, becoming one of Europe’s most successful far-right parties and aligning itself with Euroscepticism. SVP’s long history of rural and community penetration has helped strengthen social closure among its electorate.

Finally, AfD emerged in a more fragmented context, via its ties to right-wing protest networks. The party was a top-down vehicle that organized in response to what it saw as Germany’s mismanagement of the Eurozone crisis. AfD lacks dense connections to CSOs and has instead built informal and often volatile alliances with protesters. Many German CSOs — as well as German society more generally — explicitly oppose AfD, which has ironically helped AfD build an outsider identity because its supporters feel isolated and stigmatized.

The case studies vividly illustrate how varied CSO relationships shape cleavages and partisanship in three of the most important Western European parties.

*Research-in-Brief prepared by Adam Fefer.

Motivation & Summary

Social, political, and religious polarization has steadily grown in many longstanding democracies. Some elected representatives and voters have come to view their opponents as illegitimate participants in politics who pose an existential threat to the nation-state; this justifies ignoring or violating democratic norms and procedures to prevent them from gaining power. As polarization increases, voters may prefer to support authoritarian parties that are viewed as better expressing their group identities, as opposed to democratic parties seen as hostile to those identities.

Trust lies at the root of these processes: polarized individuals tend to believe that those who differ from them will not act from a place of goodwill and will lack the incentive to promote their interests. Revitalizing democracy would thus seem to require revitalizing trust. Yet one’s sense of trust is often shaped by factors that are difficult to change, such as childhood socialization. How, then, can trust be increased?

In “Financial market exposure increases generalized trust,” Saumitra Jha, Moses Shayo, and Chagai M. Weiss provide evidence from an experiment conducted among Israelis in 2015. The authors find that individuals who participated in the stock market were more likely to agree with the statement that “most people can be trusted.”

Their argument builds on the intuition that stock markets are fundamentally about trust: investors take a risk by placing their assets in the hands of unfamiliar people who nonetheless have an incentive to promote their interests. As these assets grow, participants ought to become more trusting, not only of financial markets but also of people more generally. Surprisingly, the authors find that even those whose assets did not grow became more trusting. Another surprise is that the increases in trust were higher for Israelis on the political left and right. In other words, polarized voters — those who especially struggle to trust others — exhibited greater increases in trust than centrists.

Prior Research

Social scientists have analyzed trust as both a cause and a consequence. Much of this research concerns the economy, as transactions, contracts, and negotiations all require the belief that other parties will honor their commitments. Higher levels of trust may be a cause of higher economic growth. Conversely, consumers tend to distrust firms that are subject to scandals, leading the corresponding value of those stocks to decrease.

Apart from the economy, trust is also a central aspect of ‘social capital,’ which consists of the resources gained from one’s social networks. Trust can also promote good governance by enabling collective action and by providing legitimacy to political institutions. And as Americans and others learned during the COVID-19 pandemic, trust is central to public health compliance.

Survey research has identified a persistent trust deficit; less than a quarter of respondents to the World Values Survey agree with the statement that “most people can be trusted.” This deficit has many root causes. At the personal and psychological level, one’s sense of trust likely develops in childhood. Meanwhile, people who have experienced trauma or discrimination are less likely to trust others. Whether or not two people are from the same country or the same ethnic or religious group also affects their sense of trust. Those whose ancestors were victims of the African slave trade centuries ago exhibit lower levels of trust today. People in economically unequal societies are also less likely to trust each other. All of this suggests that improving trust is very difficult, especially in polarized societies.
 

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Fig. 1. Generalized trust around the world. (a) Geographic Distribution of Generalized Trust. This figure reports cross-national patterns of generalized trust from the World Values Survey (Wave 7). For each country, we report the share of respondents who state that most people can be trusted. Since Israel is not included in the most recent wave of the World Value Survey, the figure shows generalized trust data from the 2004 World Value Survey.

The Experiment

Studying whether stock market participation affects trust is difficult because participation is itself correlated with pre-existing levels of trust, as well as with other relevant factors like gender or personality traits (such as excitability). The authors’ experimental methodology seeks to overcome this by randomly allocating a large number of participants (over 1300) into treatment and control groups. Prior to this allocation, the authors conducted a survey to establish participants’ baseline levels of trust.

Those in the treatment group participated in an additional survey that explained the study rules as well as how their asset values would be determined on the stock market, quizzing them on these topics afterwards. Participants were given either $50 or $100 (USD), which was between 64% and 128% of the average Israeli daily wage in 2015.

Stock market participants received weekly updates on the prices of their assigned assets, along with a description and valuation of their portfolio, when the markets closed at the end of each week. Individuals in the treatment group were given weekly opportunities to decide whether to buy up to 10% of their portfolio, sell up to 10% of it, or make no change. (If no decision was made, they lost the 10% that could have been traded.) Participants ultimately traded at high levels: around 70% did so at every opportunity, and 80% did so in six out of the seven weeks.

As stated above, participation increased the probability of expressing trust by around six percentage points. These effects were largest for polarized voters and for those whose stocks performed well; however, even those who suffered market losses exhibited increases in trust.
 

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The authors carefully show how trust can be not only a cause but a consequence of stock market participation. Their approach is not paternalistic because it lets participants make independent financial decisions — as opposed to lecturing them — from which trusting attitudes then develop. In addition, the study can be replicated on a large scale because (a) it can be integrated within existing government cash aid programs and (b) participants would not need much special teaching or supervision. The authors’ approach should appeal to both those who seek solutions that promote equality and empowerment and to those who oppose top-down social programs but support market-driven solutions.

*Research-in-Brief prepared by Adam Fefer.