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Exposure to Violence and Prosocial Attitudes

Posted on March 10, 2025 | Policy Brief

A Ukrainian soldier walks past an overturned car on a war-torn street, illustrating the effects of exposure to violence in conflict zones.

This policy brief examines the academic literature on the impact of conflict exposure on pro-social behavior, a crucial component of resilience and societal cohesion. It also explores potential implications for public opinion, particularly in relation to Ukraine’s prospective EU accession and foreign relations.

Introduction

Since the full-scale invasion of Ukraine began on February 24, 2022, Russian forces have launched daily attacks with varying intensity. Living in a conflict zone profoundly affects individuals in multiple dimensions, including physical and mental health, as well as economic and social conditions. While reports often focus on the destruction of physical and human capital, social capital is equally affected by violence, influencing community resilience, cohesion, and cooperation. In conflict settings, identity can become more pronounced, particularly in distinguishing allies from adversaries.

This policy brief overviews the academic literature on this topic; the impact of conflict exposure on pro-social behavior broadly defined. This literature primarily examines post-conflict settings within the broader discourse on sustaining peace. It focuses on individuals directly engaged in combat or civilians directly affected by violence, particularly regarding the reintegration of former combatants and the rehabilitation of affected populations. As discussed below, results vary, depending on indicators used and the specific context. There is more consistent support for an impact on cooperation than on trust for instance. Another key finding in the literature is the differential behavior towards in-group members – those with whom individuals identify – versus out-group members, raising important questions about national identity and attitudes towards foreign allies. Based on this literature, the brief proceeds to discuss potential implications for public attitudes in Ukraine, focusing on Ukraine’s prospective EU accession.

Literature Overview

This review focuses on the empirical literature, though the theoretical basis spans psychology and the social sciences. Post-traumatic growth theory posits that adversity can foster positive change, whereas post-traumatic withdrawal theory suggests that violence exposure leads to distrust and social withdrawal. Economic arguments emphasize the need for rebuilding, enhanced safety concerns, or reduced time constraints for civic participation due to economic disruptions. Other perspectives highlight the detrimental effects of fragmented communities, given that trust and cooperation take time to develop, or suggest that individuals directly involved in violence may face social ostracization (see Fiedler 2023 for a detailed discussion).

Empirical studies on pro-social behavior employ diverse methodologies and data, including survey responses, indicators of political engagement, and controlled experiments measuring cooperation and trust. Methodology and research design vary, but most studies compare those with direct exposure to violence (treatment group) to those indirectly exposed (control group) within a post-conflict context. It is thus important to note that even the control group experiences some degree of conflict-related impact, meaning that studies specifically capture the effects of direct exposure.

Fiedler (2023), in a recent overview, categorizes the impact of violence into three main domains: personalized and political trust, cooperation, and political engagement. Most studies suggest a negative effect on trust, as seen in Kosovo (Kijewski & Freitag, 2018) and across Europe, the South Caucasus, and Central Asia post-World War II (Grosjean, 2014). Bauer et al. (2016) conducted a meta-analysis of 16 early studies measuring the effects of war violence on social participation, cooperation, and trust. When it came to trust, no significant impact of exposure to violence was found. Cassar et al. (2013) found that Tajik civil war survivors exhibited lower trust in close neighbors but not distant villagers, suggesting that intra-community political divisions played a role. However, a small number of studies report positive effects, such as Hall & Werner (2022), who found that victimized Syrian and Iraqi refugees in Turkey exhibited higher generalized trust.

In terms of cooperation, early studies overwhelmingly support a positive effect, including the meta-analysis of Bauer et al. (2016). For example, Bauer et al. (2014) held experimental games in Sierra Leone and Georgia, demonstrating that those directly exposed to violence exhibited greater altruism and inequality aversion. More recent work has come to different conclusions, however. Hager et al. (2019) found that Uzbek victims of violence in Kyrgyzstan were less cooperative in experimental games with both in-group and out-group members. Similarly, Cecchi & Duchoslav (2018) found that violence-exposed caregivers in Uganda contributed less in public goods games.

When it comes to political engagement, most studies find a positive effect, including the meta-analysis by Bauer et al. (2016) looking at participation in social groups and political engagement. Early and influential studies by Bellows & Miguel (2006, 2009), found that individuals in Sierra Leone with direct war exposure were more likely to participate in community meetings, elections, and social or political groups. Interestingly, while Kijewski & Freitag (2018) found that violence reduced trust in Kosovo, Freitag et al. (2019) found increased political participation in the same setting. Grosjean (2014) also reported a negative effect on trust but found that conflict victims were more likely to engage in civic organizations and collective action. These findings suggest that broad measures of prosocial behavior may be overly simplistic.

A common, and important, finding in much of the literature is with regards to differential behavior towards in-groups and out-groups. Bauer et al. (2014) found that exposure to violence increased altruism and inequality aversion only when interactions occurred within the in-group. Similar findings emerge in studies on soccer players in Sierra Leone (Cecchi et al., 2016) and trust experiments in Colombia (Francesco et al., 2023). Calvo et al. (2019) found that in conflict-affected areas of Mali, participation increased in kinship-based groups while it decreased in more inclusive organizations. Similarly, Mironova & Whitt (2016) found that Kosovars exhibited greater altruism and cooperation when interacting with in-group members. These findings align with research on parochial altruism in general, where cooperation and altruistic behavior are evolutionarily linked to in-group solidarity in response to external threats (e.g. Bernhard et al., 2006, Tajfel et al., 1979). There is thus a risk that social identity becomes more based on a narrow in-group (defined by ethnicity, religion, or language) potentially exacerbating societal divisions.

Implications for Ukraine

What do these insights imply for Ukraine? Given the context-dependent nature of the literature, definitive conclusions are challenging. Two studies on conflict exposure in eastern Ukraine offer preliminary insights. Mironova & Whitt (2021) examined fairness preferences among young Ukrainian men in Donbas, finding that, while no bias against ethnic Russians existed at the onset of violence in 2014, such bias increased after a year of conflict – particularly among non-combatants, contradicting typical patterns in the literature. Coupe & Obrizan (2016) used survey data from November 2014, showing that direct exposure to violence affected political behavior: physical damage reduced voter turnout, while property damage increased support for Western-leaning parties and stronger opposition to Russian aggression.

The strong effect on non-combatants in Mironova & Whitt (2021) highlights a key limitation in the literature – findings on direct exposure may not generalize to entire populations under invasion. Comparing directly and indirectly exposed individuals does not capture the broader societal impact, potentially leading to an overly optimistic view of conflict-induced prosocial behavior. If everyone is negatively affected, those with direct exposure to violence may simply be impacted a little less.

Of particular interest is how the war shapes national identity, in-group perceptions, and political preferences. These dynamics matter for domestic cohesion, interethnic relations, and Ukraine’s foreign policy trajectory. Focusing on the latter, the EU and the U.S. have provided substantial support during the full-scale invasion but delays and insufficiencies in aid may influence perceptions of these allies. EU accession presents economic benefits but entails lengthy and costly reforms with uncertain outcomes. Additionally, shifting U.S. policies and emerging geopolitical alignments may alter Ukrainian attitudes toward Western institutions.

Terror management theory (Landau et al., 2004) suggests that fear strengthens support for charismatic leadership, which, in fragile democratic settings, may favor more authoritarian tendencies. If Western democratic institutions lose appeal, this could negatively impact Ukraine’s political engagement, trust in allies, and willingness to align with European values, which are crucial for successful EU integration.

Conclusions

This review examined the literature on exposure to violence and prosocial behavior, discussing implications for Ukraine’s societal resilience and international alignment. The findings suggest no universal relationship between conflict exposure and prosociality; instead, effects vary depending on the recipient of trust, cooperation, and engagement. Generally, prosocial behavior increases within in-groups, while attitudes toward out-groups may remain unchanged or worsen. In the Ukrainian context, this has ramifications for internal cohesion and external diplomatic relations, particularly regarding the country’s path toward EU membership.

vReferences

  • Bauer, M., Blattman, C., Chytilová, J., Henrich, J., Miguel, E., & Mitts, T. (2016). Can War Foster Cooperation? Journal of Economic Perspectives, 30(3), 249–274.
  • Bauer, M., Cassar, A., Chytilová, J., & Henrich, J. (2014). War’s Enduring Effects on the Development of Egalitarian Motivations and In-Group Biases. Psychological Science, 25(1), 47–57.
  • Bellows, J., & Miguel, E. (2006). War and Institutions: New Evidence from Sierra Leone. American Economic Review, 96(2), 394–99.
  • Bellows, J., & Miguel, E. (2009). War and Local Collective Action in Sierra Leone. Journal of Public Economics, 93(11–12), 1144–57.
  • Bernhard, H., Fehr, E., & Fischbacher, U. (2006). Group Affiliation and Altruistic Norm Enforcement. American Economic Review, 96(2), 217–221.
  • Calvo, T., Lavallée, E., Razafindrakoto, M., & Roubaud, F. (2019). Fear Not for Man? Armed Conflict and Social Capital in Mali. Journal of Comparative Economics, 48(2), 251–76.
  • Cassar, A., Grosjean, P. A., Khan, F. J., & Lambert, M. (2022). Mothers, Fathers and Others: Competition and Cooperation in the Aftermath of Conflict. UNSW Business School Research Paper.
  • Cecchi, F., Duchoslav, J. (2018). The Effect of Prenatal Stress on Cooperation: Evidence from Violent Conflict in Uganda. European Economic Review, 101, 35–56.
  • Cecchi, F., Leuveld, K., & Voors, M. (2016). Conflict Exposure and Competitiveness: Experimental Evidence from the Football Field in Sierra Leone. Economic Development and Cultural Change, 64(3), 405-435.
  • Coupé, T., & Obrizan, M. (2016). Violence and political outcomes in Ukraine—Evidence from Sloviansk and Kramatorsk. Journal of Comparative Economics, 44(1), 201-212.
  • Fiedler, C. (2023). What Do We Know about How Armed Conflict Affects Social Cohesion? A Review of the Empirical Literature. International Studies Review.
  • Francesco, B., Gómez, C., & Grimalda, G. (2023). Crime-related exposure to violence and prosocial behavior: Experimental evidence from Colombia. Journal of Behavioral and Experimental Economics, 104.
  • Freitag, M., Kijewski, S., & Oppold, M. (2019). War Experiences, Economic Grievances, and Political Participation in Postwar Societies: an Empirical Analysis of Kosovo. Conflict Management and Peace Science, 36(4), 405–24.
  • Grosjean, P. (2014). Conflict and Social and Political Preferences: Evidence from World War II and Civil Conflict in 35 European Countries. Comparative Economic Studies, 56(3), 424–51.
  • Hager, A., Krakowski, K., & Schaub, M. A. X. (2019). Ethnic Riots and Prosocial Behavior: Evidence from Kyrgyzstan. American Political Science Review, 113(4), 1029–44.
  • Hall, J., & Werner, K. (2022). Trauma and Trust: How War Exposure Shapes Social and Institutional Trust among Refugees. Frontiers in Psychology, 13, 786838.
  • Kijewski, S., & Freitag, M. (2018). Civil War and the Formation of Social Trust in Kosovo: Post-traumatic Growth or War-Related Distress? Journal of Conflict Resolution, 62(4), 717–42.
  • Landau, M. J., Solomon, S., Greenberg, J., Cohen, F., Pyszczynski, T., Arndt, J., Miller, C. H., Ogilvie, D. M., & Cook, A. (2004). Deliver us from Evil: The Effects of Mortality Salience and Reminders of 9/11 on Support for President George W. Bush. Personality and Social Psychology Bulletin, 30(9), 1136–1150.
  • Mironova, V., & Whitt, S. (2016). Social Norms after Conflict Exposure and Victimization by Violence: Experimental Evidence from Kosovo. British Journal of Political Science, 48(3), 749–65.
  • Mironova, V., & Whitt, S. (2021). Conflict and parochialism among combatants and civilians: Evidence from Ukraine. Journal of Economic Psychology, 86.
  • Tajfel, H., Turner, J. C., Austin, W. G., & Worchel, S. (1979). An integrative theory of intergroup conflict. Organizational Identity: A Reader, 56-65.

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Energy Security at a Cost: The Ripple Effects of the Baltics’ Desynchronization from the BRELL Network

Posted on March 3, 2025 | Policy Brief

High-voltage power lines in a foggy landscape representing the desynchronization of the BRELL network.

The Baltic States’ desynchronization from the BRELL network on February 7, 2025, cut ties with Russia and Belarus, ending electricity trade. Though the transition was smooth with no outages, recent underwater cable disruptions have highlighted vulnerabilities, raising energy security concerns. These events underscore the importance of both diversifying and decentralizing power systems, drawing lessons from Ukraine’s electricity market, which has remained operational despite sustained Russian attacks.

The Baltics’ power system was part of a large Russian-operated synchronous electricity system known as BRELL, which connected the electricity transmission systems of Belarus, Russia, Estonia, Latvia, and Lithuania (Figure 1). The desynchronization from BRELL and the integration into the European grid have been discussed since 2007, when the Prime Ministers of the Baltic States declared desynchronization as the region’s strategic priority. In 2018, a decision was made to join the Continental European Synchronous Area through a connection with Poland, leading to significant investments – financially supported by the European Commission – to ensure adequate infrastructure. Fully committing to their priority, the Baltic’s desynchronized completely from BRELL on February 7th, 2025.

Figure 1. The BRELL power ring

Source: Karčiauskas (2023)

A Successful Physical (De)synchronization

The desynchronization process proceeded smoothly, with no blackouts. This success was anticipated, given the project’s meticulous planning over several years. A comparable example is Ukraine, which disconnected from the Russian and Belarusian power systems less than a month after Russia’s full-scale invasion in 2022. Ukraine then synchronized with the Continental European power grid ENTSO-E, an event that had been in preparation since 2017.

After the desynchronization, the Baltic states temporarily operated in island mode, relying entirely on domestic generation for all grid operations. To maintain system stability, the commercial capacity of interconnectors with the Nordics (whose regional group is not part of the Continental European Synchronous Area) was reduced, ensuring they could serve as reserves in case of major generator outages. The NordBalt cable is one such connector linking Sweden’s SE4 region and Lithuania.

However, conditions are gradually returning to normal. As of February 17, 2025, 700 MW is now available for commercial trading, as shown in Figure 2. Despite this progress, the commercial trading capacity of the interconnector with Poland (the LitPol line) remains heavily restricted and is primarily used to maintain system stability.

Figure 2. Day-ahead commercial transfer capacities on the Nordic interconnectors around the desynchronization

Source: Nord Pool

The Baltic region’s synchronization with the European grid is currently achieved through a 400 kV overhead power line connecting Lithuania and Poland. A second link, the Harmony Link, an underground cable, is planned to become operational by 2030. This makes the existing interconnection an essential part of regional infrastructure and a potential security risk, particularly given the recent sabotage of cables in the Baltic Sea. In response to these threats, Lithuania has increased surveillance of the NordBalt cable. The country’s prime minister has estimated the cost of securing the Baltic cables at €32-34 million,  seeking EU support for its funding. The government has also strengthened the protection measures. Initially, security was outsourced to a private security company, but plans are in place for the country’s Public Security Service (Viešojo saugumo tarnyba) to take over in spring 2025. Further, in preparation for the Baltics’ full desynchronization, the Polish Transmission System Operator deployed helicopters to patrol the interconnection, to enhance the security of the infrastructure.

From Trade Interruption to Infrastructure Sabotage

The most significant short-term impact of the desynchronization from the BRELL is the limitation of electricity trade for the Baltic states. The desynchronization has affected reserve balancing in the Baltic region, forcing the three states to rely more on their internal generation for system stability. This has resulted in reduced generation capacity for commercial trade, as the states must be prepared to again operate in island mode in case of an outage on the LitPol cable. Until February 19, 2025, the LitPol line remained unused for commercial trading. However, gradual increases are expected to eventually allow for 150 MW commercial trade between the Polish area and the Baltics, a significant reduction from the 500 MW previously available. This limited trading capacity could lead to higher prices in the Baltics, as the region is a net importer of electricity.

This is not the first time the Baltics have faced trade disruptions. In November 2020, after the construction of a Belarusian nuclear power plant near the Lithuanian border, Lithuania, followed by Latvia and Estonia, limited commercial electricity exchanges with Russia and Belarus. Furthermore, on May 15, 2022, electricity trade between Russia and Finland was halted, followed by the closure of the Kaliningrad-Lithuania connection the next day. While this event led to no blackouts, it clearly impacted the region’s price volatility (Lazarczyk & Le Coq, 2023).

Recently, the region has experienced sabotage to underwater interconnectors, significantly impacting electricity trade between the Nordics and the Baltics. On December 25, 2024, the Estlink 2 cable, one of two connections between Finland and Estonia, was cut, reducing transmission capacity between the two regions. Repair costs are expected to reach several million Euros. As disclosed via Nord Pool’s Urgent Market Message, repairs are expected to last until August 2025 – stressing the system. As Estlink 2 is offline, the Baltic system is not fully operating. If another major component fails, there may be insufficient capacity to maintain grid stability, increasing the risk of outages or the need for emergency interventions.

With the complete disconnection from the Russian and Belarusian power grids, Russia no longer has direct control over the Baltic electricity trade, effectively eliminating the risk of trade disruptions from Russia. However, a new energy threat has emerged: infrastructure sabotage. Although the perpetrators of recent sabotage incidents have not been clearly identified, both Lazarczyk & Le Coq (2023) and Fang et al. (2024) emphasize Russia’s strategic incentives to engage in such actions to maintain its geopolitical influence and discourage neighboring countries from reducing their energy dependence. Sabotaging critical infrastructure presents another efficient method of weaponizing electricity, particularly in the current context of limited Nord Pool imports and the Baltic States’ insufficient integration with the broader European grid.

From Diversification to Decentralization: Responses to Electricity Infrastructure Threats

The Baltic States have diversified their domestic energy supply sources to address the electricity infrastructure threat. In 2024, Estonia’s parliament approved the development of nuclear energy, with Fermi Energia planning to build two 300 MW light-water reactors. Other projects include a hydrogen-ready gas plant in Narva, which is expected to be completed by 2029, as well as an expansion of wind power capacity. While there was some support for extending the use of oil-fired plants in Estonia, their competitiveness has been undermined by high carbon prices and the closure of domestic oil fields. Elering, the Estonian Transmission system operator, has also begun long-term procurement to acquire 500 MW of new generation and storage for frequency management to ensure reserve capacity.

However, diversification alone will not be sufficient to address the challenges currently faced by the Baltic States. Incidents like the cutting of underwater cables underscore the growing need to decentralize the power system. Large, centralized power plants are more vulnerable to targeted attacks compared to decentralized energy systems. As a result, connected microgrids seem to be a viable solution for future energy resilience, as they can maintain functionality even when localized damage occurs. Again, Ukraine’s experience demonstrates the benefits of decentralization. Since the onset of the war, Ukraine has faced both physical and cyberattacks but has strengthened its energy resilience by decentralizing its system and expanding wind and solar power (Eurelectric, 2025). This approach has proven effective: while a single missile could destroy a nearly gigawatt-scale power plant, it would only damage an individual wind turbine or a small section of solar panels, significantly limiting the overall impact.

The desynchronization of the Baltic States from the BRELL network marked a complete break with Russia and Belarus, effectively ending any possibility of electricity trade between these countries and the Baltic region. This transition was successfully completed without any power outages. While the primary goal was to enhance energy security in the Baltics, several challenges remain, as highlighted in this policy brief. Recent disruptions to underwater cables, as well as Russia’s attacks on Ukraine’s electricity market, underscore the urgent need for both diversification and decentralization to strengthen the region’s energy security. While energy supply diversification reduces supply chain dependencies, decentralization enhances resilience against targeted attacks, creating a more robust and flexible energy system.

References

  • Eurelectric, 2025, Redefining Energy Security In the age of electricity, Lexicon.
  • Fang, S., Jaffe, A. M., Loch-Temzelides, T., and C.L. Prete. (2024). Electricity grids and geopolitics: A game-theoretic analysis of the synchronization of the Baltic States’ electricity networks with Continental Europe. Energy Policy, 188, 114068.
  • Karčiauskas, J. (2023). Lithuania External Relations Briefing: Synchronization of the Baltic Electricity Network and Breaking Dependence on Russian Energy Market. China CEE Institude Weekly Briefing 2023 Eylül, 4, 3.
  • Lazarczyk, E. and Le Coq, C. (2023). Power coming for Russia and Baltic Sea region’s energy security, Energiforsk report.
  • Lazarczyk, E. and Le Coq, C. (2022). Can the Baltic States Do Without Russian Electricity?, FREE Policy Brief.

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Ukraine’s Fight Is Our Fight: The Need for Sustained International Commitment

Posted on February 24, 2025 | Policy Brief

A large Ukrainian flag being carried by a crowd of demonstrators in Lithuania, symbolizing Ukraine International Commitment and global solidarity against aggression.

We are at a critical juncture in the defense of Ukraine and the liberal world order. The war against Ukraine is not only a test of Europe’s resilience but also a critical moment for democratic nations to reaffirm their values through concrete action. This brief examines Western support to Ukraine in the broader context of international efforts, putting the order of magnitudes in perspective, and emphasizing the west’s superior capacity if the political will is there. Supporting Ukraine to victory is not just the morally right thing to do, but economically rational from a European perspective.

As the U.S. support to the long-term survival of Ukraine is becoming increasingly uncertain, European countries need to step up. This is a moral obligation, to help save lives in a democratic neighbor under attack from an autocratic regime. But it is also in the self-interest of European countries as the Russian regime is threatening the whole European security order. A Russian victory will embolden the Russian regime to push further, forcing European countries to dramatically increase defense spending, cause disruptions to global trade flows, and generate another wave of mass-migration. This brief builds on a recent report (Becker et al., 2025) in which we analyze current spending to support Ukraine, put that support in perspective to other recent political initiatives, and discuss alternative scenarios for the war outcome and their fiscal consequences. We argue that making sure that Ukraine wins the war is not only the morally right thing to do, but also the economically rational alternative.

The International Support to Ukraine

The total support provided to Ukraine by its coalition of Western democratic allies since the start of the full-scale invasion exceeded by October 2024 €200 billion. This assistance, that includes both financial, humanitarian and military support, can be categorized in various ways, and its development over time can be analyzed using data compiled by the Kiel Institute for the World Economy. A summary table of their estimates of aggregate support is provided below.

A particularly relevant aspect in light of recent news is that approximately one-third of total disbursed aid has come from the United States. The U.S. has primarily contributed military assistance, accounting for roughly half of all military aid provided to Ukraine. In contrast, the European Union—comprising both EU institutions and bilateral contributions from member states—stands as the largest provider of financial support. This financial assistance is crucial for sustaining Ukraine’s societal functions and maintaining the state budget.

Table 1. International support to Ukraine, Feb 2022 – Oct 2024

Source: Trebesch et al. (2024).

Moreover, the EU has signaled a long-term commitment to provide, in the coming years, an amount comparable to what has already been given. This EU strategy ensures greater long-term stability and predictability, guaranteeing that Ukraine has reliable financial resources to sustain state operations in the years ahead. Consequently, while a potential shift in U.S. policy regarding future support could pose challenges, it would not necessarily be insurmountable.

What is crucial is that Ukraine’s allies remain adaptable, and that the broader coalition demonstrates the ability to adjust its commitments, as this will be essential for sustaining the necessary level of assistance moving forward.

Putting the Support in Perspective

To assess whether the support provided to Ukraine is truly substantial, it is essential to place it in context through meaningful comparisons. One approach is to examine it in historical terms, particularly in relation to past instances of large-scale military and financial assistance. A key historical benchmark is the Second World War, when military aid among the Allied powers played a decisive role in shaping the outcome of the conflict. Extensive resources were allocated to major military operations spanning multiple continents, with the United States and the United Kingdom, in particular, dedicating a significant share of their GDP to support their allies, including the Soviet Union, France, and other nations.  As seen in Figure 1, by comparison, the current level of aid to Ukraine, while substantial and essential to its defense, remains considerably smaller in relation to GDP.

Figure 1. Historical comparisons

Source: Trebesch et al. (2024).

Another way to assess the scale of support to Ukraine is by comparing it to other major financial commitments made by governments in response to crises. While the aid allocated to Ukraine is significant in absolute terms, it remains relatively modest when measured against the scale of other programs, see Figure 2.

A recent example is the extensive subsidies provided to households and businesses to mitigate the impact of surging energy prices since 2022.  Sgaravatti et al. (2021) concludes that most European countries implemented energy support measures amounting to between 3 and 6 percent of GDP. Specifically, Germany allocated €157 billion, France and Italy each committed €92 billion, the UK spent approximately €103 billion. These figures represent 5 to 10 times the amount of aid given to Ukraine so far, with some countries, such as Italy, allocating even greater relative sums. On average, EU countries have spent about five times more on energy subsidies than on Ukraine aid. Only the Nordic countries and Estonia have directed more resources toward Ukraine than toward energy-related support. Although not all allocated funds have been fully disbursed, the scale of these commitments underscores a clear political and financial willingness to address crises perceived as directly impacting domestic economies.

Figure 2. EU response to other shocks (billions of €)

Source: Trebesch et al. (2024).

Another relevant comparison is the Pandemic Recovery Fund, also known as Next Generation EU. With a commitment of over €800 billion, this fund represents the EU’s comprehensive response to the economic consequences of the Covid-19 pandemic. Again, the support to Ukraine appears comparatively small, about one seventh of the Pandemic Recovery Fund.

The support to Ukraine is also much smaller in comparison to the so-called “Eurozone bailout”, the financial assistance programs provided to several Eurozone member states (Greece, Ireland, Spain and Portugal) during the sovereign debt crisis between 2010 and 2012. The programs were designed to stabilize the economies hit hard by the crisis and to prevent the potential spread of instability throughout the Eurozone.

Overall, the scale of these commitments underscores a clear political and financial willingness and ability to address crises perceived as directly impacting domestic citizens. This raises the question of whether the relatively modest support for Ukraine reflects a lack of concern among European voters. However, this does not appear to be the case. In survey data from six countries – Belgium, Germany, Hungary, Italy, the Netherlands, and Poland – fielded in June 2024, most respondents express satisfaction with current aid levels, and a narrow majority in most countries even supports increasing aid (Eck and Michel, 2024).

A further illustration comes from the Eurobarometer survey conducted in the spring of 2024 which asked: “Which of the following [crises] has had the greatest influence on how you see the future?”. Respondents could choose between different crises, including those mentioned above, and the full-scale invasion of Ukraine.

Figure 3 illustrates the total commitments made by EU countries for Ukraine up until October 31, 2024, compared to other previously discussed support measures, represented by the blue bars. The yellow bars, on the other hand, show a counterfactual allocation of these funds, based on public priorities as indicated in the Eurobarometer survey. Longer yellow bars indicate that a higher proportion of respondents perceived this crisis as having a greater negative impact on their outlook for the future. By comparing the actual commitments (blue bars) with this hypothetical allocation (yellow bars)—which reflects how resources might have been distributed if they aligned with the population’s stated priorities—it becomes evident that there is substantial public backing for maintaining a high level of support for Ukraine. The results show that the population prioritizes the situation in Ukraine above several other economic issues, including those that directly affect their own personal finances.

Figure 3. Support to Ukraine compared to other EU initiatives – what do voters think?

Source: Trebesch et al. (2024); Niinistö (2024); authors’ calculations.

The Costs of Not Supporting Ukraine

When discussing the costs of support to Ukraine it is important to understand what the correct counterfactual is. The Russian aggression causes costs for Europe irrespective of what actions we take. Those costs are most immediately felt in Ukraine, with devastating human suffering, the loss of lives, and a dramatic deterioration in all areas of human wellbeing. Also in the rest of Europe, though, the aggression has immediate costs, in the economic sphere primarily in the form of dramatically increased needs for defense spending, migration flows, and disruptions to global trade relationships. These costs are difficult to determine exactly, but they are likely to be substantially higher in the case of a Russian victory. Binder and Schularik (2024) estimate increased costs for defense, increased refugee reception and lost investment opportunities for the German industry at between 1-2 percent of GDP in the coming years. As they put it, the costs of ending aid to Ukraine are 10-20 times greater than continuing aid at Germany’s current level.

Any scenario involving continued Russian aggression would demand substantial and sustained economic investments in defense and deterrence across Europe. Clear historical parallels can be drawn looking at the difference in countries’ military spending during different periods of threat intensity. Average military spending in a number of Western countries during the Cold War (1949-1990) was about 4.1 percent of GDP, much higher in the U.S. but also in Germany, France and the UK. In the period after 1989-1991 (the fall of the Berlin Wall, the dissolution of the Soviet Union), the amounts fell significantly. The average for the same group of countries in this period is about 2 percent of GDP and only 1.75 percent if the U.S. is excluded.

Also after 1991 there is evidence of how perceived threats affect military spending. Figure 4 plots the change in military spending over GDP between 2014-2024 against the distance between capital cities and Moscow. The change varies between 0 (Cyprus) and around 2.25 (Poland) and shows a very clear positive correlation between increases in spending and proximity to Moscow.  There has also in general been a substantial increase in military spending after 2022 in several European countries, but in a scenario where Russia wins the war, these will certainly have to be increased further and maintained at a high level for longer.  An increase in annual military expenditure in relation to GDP in the order of one to two percentage points would mean EUR 200-400 billion per year for the EU, while the total EU support to Ukraine from 2022 to today is just over €100 billion.

Figure 4. Increase in military expenditures in relation to distance to Moscow

Source: SIPRI data, authors’ calculations.

A Russian victory would also have profound consequences for migration flows, with the most severe effects likely in the event of Ukraine’s surrender. The Kiel Institute estimates the cost of hosting Ukrainian refugees at €26.5 billion (4.2 percent of GDP) for Poland, one of the countries that received the largest flows. Beyond migration, a Russian victory would also reshape the global geopolitical order. Putin has framed the war as a broader conflict with the U.S. and its democratic allies, while an emerging alliance of Russia, Iran, North Korea, and China is positioning itself as an alternative to the Western-led system. A Ukrainian defeat would weaken the authority of the U.S., NATO, and the rules-based international order, potentially driving more nations in the Global South toward authoritarian powers for military and economic support. This shift could disrupt global trade, affect access to food, metals, and energy. Estimating the full economic impact of such a shift is difficult, but comparisons can be drawn with other global shocks. The European Union’s GDP experienced a significant contraction due to the Covid-19 pandemic, 5.9 percent contraction in real GDP according to Eurostat, 6.6 percent according to the European Central Bank. While the economy rebounded relatively quickly from the pandemic, a permanent geopolitical realignment caused by a Russian victory would likely have far more severe and lasting economic consequences.

Given that Ukraine is at the forefront of Russia’s aggression, its resilience serves as a critical test of Europe’s ability to withstand potential future threats. Thus, strengthening our own security and economic stability in the long term is inseparable from strengthening Ukraine’s resilience now. The fundamental difference lies in the long-term trajectory of these investments. In a scenario where Ukraine is victorious, military and financial aid during the war would eventually transition into reconstruction efforts and preparations for the country’s integration into the EU. This outcome is undeniably more favorable—both economically and in humanitarian terms—not only for Ukraine but for Europe as a whole. Therefore, an even more relevant question is whether the level of support is enough for Ukraine to win the war.

Is Sufficient Support Feasible?

Is it even reasonable to think that we in the West could be able to support Ukraine in such a way that they can militarily defeat Russia? Russia is spending more on its war industry than it has since the Cold War. In 2023, it spent about $110 billion (about 6 percent of GDP). By 2024, this figure is expected to have increased to about $140 billion (about 7 percent of GDP). These amounts are huge and represent a significant part of Russia’s state budget, but they are not sustainable as long as sanctions against Russia remain in place (SITE, 2024). For the EU, on the other hand, the sacrifices needed to match this expenditure would not be as great. The EU’s GDP is about ten times larger than Russia’s, which means that in absolute terms the equivalent amount is only 0.6-0.7 percent of the EU’s GDP. If the U.S. continues to contribute, the share falls to below 0.3 percent of GDP.

Despite the economic advantage of Ukraine’s allies over Russia, several factors could still shift the balance of power in Russia’s favor. One key issue is military production capacity—Russia has consistently outproduced Ukraine’s allies in ammunition and equipment. While Western economies have the resources to manufacture superior weaponry, actual production remains insufficient, requiring both increased capacity and political will. Another challenge is cost efficiency. Military purchasing power parity estimates suggest that Russia can produce approximately 2.5 times more military equipment per dollar than the EU, giving it a cost advantage in volume production. However, this does not fully compensate for its overall economic disadvantage, particularly when factoring in quality differences.

Manpower is also a critical factor. Russia’s larger population allows for sustained mobilization, but at a steep financial cost. Soldiers are recruited at a minimum monthly salary of $2,500, with additional bonuses bringing the first-year cost per recruit to three times the average Russian annual salary. Compensation for injured and fallen soldiers further strains state finances, with estimated payouts reaching 1.5 percent of Russia’s GDP between mid-2023 and mid-2024. Over time, these costs limit Russia’s ability to fund its war effort, making mass mobilization financially unsustainable.

Overall, advanced Western weaponry and superior economic capacity can match Russia’s advantage in manpower if the political will is there. Additionally, Russia’s already fragile demographic situation is deteriorating due to battlefield losses and wartime emigration. Any measure that weakens Russia’s economic capacity—particularly through sanctions and embargoes—diminishes the strategic advantage of its larger population and serves as a crucial complement to military and financial support for Ukraine.

Conclusion

Ukraine’s western allies have provided the country with substantial military and financial support since the onset of the full-scale invasion. Yet, relative to the gravity of the risks involved, previous responses to economic shocks, and citizens’ concerns about the situation, the support is insufficient. The costs of a Russian victory will be higher for Europe, even disregarding the human suffering involved. With U.S. support potentially waning, EU needs to pick up leadership.

References

  • Becker, Torbjörn; and Anders Olofsgård; and Maria Perrotta Berlin; and Jesper Roine. (2025). “Svenskt Ukrainastöd i en internationell kontext: Offentligfinansiella effekter och framtidsscenarier”, Commissioned by the Swedish Fiscal Policy Council.
  • Binder, J. & Schularick, M. (2024). “Was kostet es, die Ukraine nicht zu unterstützen?” Kiel Policy Brief No. 179.
  • Eck, B & Michel, E. (2024). “Breaking the Stalemate: Europeans’ Preferences to Expand, Cut, or Sustain Support to Ukraine”, OSF Preprints, Center for Open Science.
  • Niinistö, S. (2024) .“Safer Together – Strengthening Europe’s Civilian and Military Preparedness and Readiness” European Commission Report.
  • Sgaravatti, G., S. Tagliapietra, C. Trasi and Zachmann, G. (2021). “National policies to shield consumers from rising energy prices”, Bruegel Datasets, first published 4 November 2021.
  • SITE. (2024). “The Russian Economy in the Fog of War”. Commissioned by the Swedish Government.
  • Trebesch, C., Antezza, A., Bushnell, K., Bomprezzi, P., Dyussimbinov, Y., Chambino, C., Ferrari, C., Frank, A., Frank, P., Franz, L., Gerland, C., Irto, G., Kharitonov, I., Kumar, B., Nishikawa, T., Rebinskaya, E., Schade, C., Schramm, S., & Weiser, L. (2024). “The Ukraine Support Tracker: Which countries help Ukraine and how?” Kiel Working Paper No. 2218. Kiel Institute for the World Economy.

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Revisiting the Impact of Rising Gasoline Prices on Swedish Households

Posted on February 10, 2025 | Policy Brief

Scenic night view of Stockholm traffic with light trails, symbolizing the gasoline prices impact on Sweden’s transport sector.

Sweden has a long-standing tradition of fuel taxation, but recent shifts in transport policy have significantly altered the cost of driving. This policy brief examines the impact of gasoline tax cuts and reductions in biofuel mandates introduced between May 2022 and January 2024. These measures, alongside a drop in global crude oil prices, have led to a 34 percent decline in pump prices, bringing the cost of driving to one of its lowest levels in the past 25 years. Using a comparative analysis with Denmark, the brief quantifies the impact of the tax cuts and biofuel policy changes, showing how they kept fuel prices lower. However, these short-term financial benefits have broader implications. Lower gasoline taxes have increased household exposure to crude oil price volatility and slowed electric vehicle adoption, reversing progress toward Sweden’s long-term climate targets. Given these trade-offs, the brief argues for a reassessment of transport policies to balance affordability with long-term environmental sustainability.

The Cost of Driving in Sweden

Sweden has a long history of fuel taxation, having introduced an excise tax on gasoline in 1924. For over seventy years (1951–2021), the nominal tax rate steadily increased without significant reductions. This trend stopped in 2022, when the first of a series of tax cuts was implemented on May 1. This shift in transport policy came in response to a 60 percent surge in gasoline prices between early 2021 and mid-2022. This price spike was driven by pandemic-related supply-chain issues and Russia’s invasion of Ukraine in February 2022. Moreover, the 2022 elections in Sweden, which brought a conservative coalition to power, further transformed transport policy, as the new government had campaigned on reducing pump prices.

In 2022, Celina Tippmann and I published two policy briefs on the impact of surging gasoline prices in Sweden. The first, titled The Impact of Rising Gasoline Prices on Swedish Households – Is This Time Different?, found that despite record-high real gasoline prices, driving was historically affordable due to improved fuel efficiency and rising real wages over the past three decades. The second brief, Who Benefitted from the Gasoline Tax Cut in Sweden?, examined Sweden’s first major gasoline tax cut in decades, implemented on May 1, 2022 in response to the surging price. We found that the tax cut was fully passed through to consumers but likely caused spill-over effects that raised gasoline prices in neighboring countries, shifting part of the burden onto their households.

In this brief, I analyze the developments since the May 2022 gasoline tax cut. This tax cut marked the beginning of significant changes to Sweden’s transport policies. While a part of the May tax cut was reversed by design (the majority of the 1.81 SEK (€0.17) per liter tax cut expired by October 2022), it was followed by the removal of subsidies for electric vehicles in November 2022 and additional tax cuts; one tax cut on January 1st, 2023, and a further reduction in gasoline tax rates on January 1st, 2024, alongside a lower biofuel mandate. Meanwhile, global crude oil prices dropped by more than a third since their June 2022 peak. Together, these changes have likely reduced the cost of driving using gasoline and diesel and created a relative cost advantage for vehicles with internal combustion engines.

Figure 1. Gasoline pump price: 2000-2024

A historical chart of Sweden’s gasoline prices impact, showing fuel price trends from 2000 to 2025 in real SEK per liter.

Source: Monthly data on gasoline prices are provided by Drivkraft Sverige (2025).

Figure 1 illustrates the dramatic price movements over the last couple of years. After the sharp increase in gasoline prices from early 2021 to mid-2022, the subsequent drop has been equally dramatic. Since June 2022, pump prices have fallen by 34 percent, bringing real gasoline prices just below the 25-year average of 15 SEK per liter.

Figure 2. Gasoline expenditure per 100 km

Source: Trafikverket (2022) and Drivkraft Sverige (2025).

Furthermore, the recent drop in driving costs is even more dramatic if we factor in improvements in average fuel efficiency over time. New vehicles sold in Sweden today can drive 50 percent further on a liter of gasoline compared to the year 2000. Accounting for this, Figure 2 shows that the cost of driving is now 20 percent below the average cost over the last 25 years.

Lastly, real wage growth has further enhanced the affordability of driving. Since 1991, average real wages in Sweden have risen by nearly 60 percent. As a result, the cost of driving, measured as a share of income, has steadily declined. Figure 3 shows a temporary increase in driving costs in 2022, but today, households spend less than 40 percent of their hourly wage to drive 100 kilometers – a near-historic low.

Figure 3. Cost of driving as share of income

Source: Data on average hourly real wages are provided by Statistics Sweden (2025).

The Cost in the Counterfactual Scenario

While Figures 1–3 show the evolution of driving costs, they do not isolate the impact of recent transport policies. The causal effect of the tax cuts and changes to the biofuel mandate hinges on the pass-through rate to consumers and how much of the benefit of the policy changes has been captured by producers. In addition, we need to separate the price change that is due to policy changes from the part that is due to the falling crude oil price.

Two strategies are available to estimate the pass-through rate to households. The first involves using price elasticities of demand and supply for gasoline, where the relatively inelastic side captures most of the benefit from a tax reduction (Andersson and Tippmann, 2022). However, the unusual conditions in the gasoline market over the past few years – characterized by supply restrictions from underinvestment during the pandemic, sanctions on Russia following its invasion of Ukraine, and shifts in consumer travel behavior – have made elasticity estimates from historical data less reliable for assessing tax incidence today.

The second approach involves a comparative analysis, examining the evolution of gasoline pump prices in Sweden against those in a ”twin“ country – one similar to Sweden but unaffected by recent transport fuel policy changes. This is the method I adopt in this brief. A benefit of using a comparative analysis is that the crude oil price is not a confounder as it affects the gasoline price in the comparison country equally. I selected Denmark as the comparison unit due to its geographical proximity, socio-economic similarity, and minimal changes to gasoline tax rates over the past two and a half years (Drivkraft Danmark, 2025).

Figure 4. Gasoline pump price 2022-2024

Graph comparing the gasoline prices impact in Sweden and Denmark from 2022 to 2024, showing effects of tax changes on fuel costs.

Note: Gasoline prices in Sweden and Denmark are provided by CirkleK (2025). Daily exchange rates are provided by Riksbanken (2025). The horizontal lines indicate the four tax changes over the sample period.

Figure 4 shows that nominal gasoline prices in Sweden and Denmark closely tracked each other until the first tax cut on May 1, 2022. Following the tax cut, Sweden’s prices fell by an amount roughly equivalent to the tax cut. When part of this initial tax reduction was reversed on October 1, 2022, the price gap narrowed before widening again due to a new tax cut on January 1, 2023. The gap widened further at the start of 2024 with another tax cut and a reduction in the biofuel mandate (biofuel is typically much more expensive than crude oil). In total, the pump price in Sweden fell by more than 3 SEK relative to the counterfactual scenario. With a full pass-through of the tax cuts to consumers, approximately half of this reduction is attributed to the tax cuts, with the other half resulting from the reduced biofuel mandate (Andersson and Tippman, 2022).

It may seem surprising that a reduction of the biofuel mandate from 7.8 percent to 6 percent has such a significant impact on the pump price in Sweden. However, one needs to account for the indirect effect on the price of biofuel itself from a reduction in its demand. Sweden also reduced its biofuel mandate for diesel, from 30.5 percent to 6 percent, a far more drastic cut. Together, these reductions significantly lowered biofuel demand, likely driving down biofuel prices in the market and amplifying their impact on pump prices.

Conclusion

The cost of driving in Sweden is at a historic low. Over the past two and a half years, tax cuts and reductions in the biofuel mandate have significantly lowered pump prices, with the benefits passed directly to consumers. Compared to a scenario with no policy changes, Swedish households now enjoy drastically reduced costs at the pump. However, these short-term benefits come with a long-term risk that warrant careful consideration.

In our first policy brief in 2022, Celina Tippmann and I cautioned that reducing gasoline tax rates could encourage households to purchase less fuel-efficient vehicles, leaving them more vulnerable to future crude oil price spikes. Previously, excise taxes – comprising more than half of Sweden’s pump price – acted as a buffer against global oil price volatility. Lower fuel taxes now mean crude oil prices make up a larger share of the pump price, increasing price volatility and household exposure to market fluctuations.

Emerging evidence suggests that households are responding to the latest policy changes as anticipated. In 2024, the share of electric vehicles in new car sales dropped for the first time in years, from 38.7 percent to 35 percent, while average carbon emissions from new vehicles increased by 5 percent (Mobility Sweden, 2025), breaking a long-run downwards trend. This reversal of progress in emissions reductions makes achieving Sweden’s 2030 climate target – a 70 percent reduction in transport sector carbon emissions relative to 2010 – significantly more challenging.

While the election campaign promise from the conservative coalition of reducing gasoline prices may have been politically and electorally effective, its consequences on the transport market are becoming clearer. Swedish households have become more vulnerable to crude oil price volatility as they are buying less fuel-efficient vehicles, and progress toward emission reduction goals has stalled. As such, it is time for a more ambitious climate policy in the transport sector. Sweden should consider reintroducing higher gasoline tax rates and strengthening financial support for electric vehicle adoption. These measures would help balance the affordability of driving with the urgent need to meet climate objectives.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Road Congestion Pricing with A Public Transport Cashback Mechanism

Posted on February 3, 2025 | Policy Brief

Traffic congestion during rush hour – a challenge congestion pricing aims to solve.

Traffic jams are a major problem in cities leading to wasted time, air pollution, reduced accessibility, and, in turn, lower economic activity. Transport economists widely agree that charging drivers fees for using busy roads during rush hours (congestion pricing) is the best answer to road congestion problems. However, such a policy is rarely used, mostly because people see it as unfair in how it affects different income groups. We propose an innovative personalized public transport cashback mechanism to make congestion pricing more acceptable. Recent surveys in Riga and Vienna show that people are more willing to support the introduction of congestion pricing when it includes a cashback component.

Road Congestion Pricing and Its Discontent

Road Congestion Pricing

Traffic jams happen when too many cars at the same place and at the same time use a road of a limited capacity. Building new roads or lanes is expensive, especially in cities, and it only provides short- and medium-term traffic improvements, with little impact on congestion in the long term (Ossokina et al., 2023; Hymel, 2019). Duranton and Turner (2011) show that when major roads are expanded, more people start using them and, over time, congestion returns to the same level as before. Meanwhile, a travel mode shift from cars to public transport and bicycles also requires investments and is difficult to implement in practice.

Dynamic congestion pricing, when road tolls vary based on the time of day, is designed to spread out traffic flow over time without the need to expand road infrastructure (Small and Verhoef, 2007). Notably, this approach does not aim to reduce the total number of cars on the road. Instead, it encourages them to spread their travel times more evenly, ensuring that the road capacity can handle the traffic without congestion.

Dynamic congestion pricing typically works as follows: there is no charge at night, the toll is small in the early morning, then it gradually increases during the morning until it reaches its peak. The toll then decreases in the afternoon before rising again during the evening. This system works in a congestion zone, which is usually the busiest areas of a city. When a car enters the zone, video cameras automatically identify it without stopping the car. There are no toll booths on the streets – an electronic system calculates the toll based on the time of day and charges the driver automatically through a linked account. Cities can tailor the system to fit their specific geography and infrastructure, offering exemptions for certain vehicles and pass-through traffic (for practical examples, visit the Swedish Transport Agency’s website to learn more about congestion pricing in Stockholm and Gothenburg).

By reducing the number of cars during congested hours, such dynamic pricing benefits both the city and its residents:

  • (i) Drivers enjoy faster travel times as road toll allows them to gain time in exchange for money. For example, in the morning, drivers can leave for work later as they no longer need to account for time spent in traffic jams.
  • (ii) Non-drivers enjoy congestion-free neighborhoods with improved air quality and overall higher quality of life.
  • (iii) The city can tackle congestion without making large investments in new roads. The funds collected from drivers not only cover the toll system maintenance, but also contribute to the cost of the infrastructure they use. The funds may also be used to improve public transportation.

Low Public Acceptability

In light of the benefits of congestion pricing, it seems surprising that very few cities actually use it. Notable examples include London, Singapore, Stockholm and Gothenburg. New York City introduced its congestion charge on the 5th of January 2025, the first in the US. This stands in stark contrast to paid on-street parking, another transport policy measure that has been successfully implemented in almost every large city across Europe. The disparity arises because the general public often sees congestion pricing as an additional tax, believing it unfairly affects lower-income individuals. Presumably, low-income individuals have less flexible work schedules and fewer travel choices, making it harder for them to avoid traveling during high-toll periods (Selmoune et al., 2020). Moreover, they would spend a larger share of their income on road tolls compared to wealthier drivers, which makes congestion pricing a regressive policy.

Even though congestion pricing is not a tax and is not meant to redistribute funds, it may still appear as such to the public. This perception leads to vocal public resistance to road pricing which, in turn, discourages politicians from implementing the policy. Another reason for public skepticism is a lack of trust in politicians and municipal officials to manage the collected funds effectively, with concerns that the money may not be spent in ways that benefit the city.

Public Transport Cashback

Cashback Mechanism

To address the perceived unfairness of congestion pricing and fears about the misuse of collected funds, we propose a personalized public transport cashback mechanism – a novel approach that has not yet been implemented anywhere. Instead of collecting the tolls, we suggest immediately transferring the money back to drivers in the form of public transport vouchers or cashback. That is, when a driver pays road toll, almost the entire amount is credited directly to their personal public transport account/card as cashback, while a small portion of the toll is retained to cover maintenance costs of the road pricing system. The cashback can only be used to pay for public transport. Since the road toll is returned to drivers in the form of public transport cashback, there is no need for money redistribution by public authorities.

Our pricing mechanism retains the core feature of conventional dynamic road pricing: the road toll motivates drivers to adjust their travel times, helping to prevent traffic jams. The toll values are likely to be different though, as the toll now has additional value to drivers who might use the cashback for public transport. While this feature reduces the efficiency of the toll compared to conventional congestion pricing, the cashback mechanism also introduces a new beneficial property. By motivating some drivers to occasionally switch to public transport, it further reduces car use and helps ease congestion. The interplay between these two factors ultimately determines the required congestion toll values.

The cashback can be accumulated over several years and is non-transferable to prevent drivers from using their cars more often. The cashback mechanism would likely work for private cars only, though exceptions and specific features can be adjusted to local circumstances. Public transport companies are likely to benefit from additional revenue through increased ticket sales and unused, expired cashback. However, since public transport ticket prices do not always cover the full cost of providing the service, it is important to balance the additional costs of implementing the cashback mechanism with the expected revenue gains. This could potentially be done by reducing the cashback portion relative to the toll share retained for system maintenance.

However, congestion pricing with a cashback mechanism is not a standalone solution or a silver bullet. It works best when combined with improvements of the public transport network, as this encourages drivers to make regular use of their cashback.

Transport Survey Data

The key idea behind the cashback mechanism is that it gives drivers direct and transparent control of their money, which is expected to make road pricing policy more acceptable. Whether this holds true or not is an empirical matter. This was tested by considering the means of a representative survey conducted in Riga (Latvia) and Vienna (Austria) in the summer of 2024. The survey includes 1,000 residents in both capitals and their respective surrounding municipalities. It features questions about respondents’ socio-demographic characteristics, current travel options, commute patterns (including accompanying trips with children), and their political and social attitudes. It also includes two stated-choice experiments exploring the acceptability of congestion pricing and potential changes in travel behaviour if such pricing is introduced. While detailed data analysis is still ongoing, this policy brief highlights some intriguing preliminary insights.

In the survey, we ask the respondents whether they would vote in a referendum in favor of congestion pricing under four different scenarios for using the collected toll funds: (i) transferring them as a public transport cashback, (ii) sharing them equally among all city inhabitants, (iii) leaving the allocation decisions to local politicians, or (iv) using them to support eco-friendly transport. Respondents were familiarized with the topic before answering the question by participating in a stated-choice experiment about congestion pricing acceptability. The experiment included a detailed explanation of how congestion pricing works, along with a potential congestion zone map. Figure 1 shows responses from Riga, and Figure 2 from Vienna.

Figure 1. Responses from Riga. “Would you support congestion pricing in a referendum if the collected toll funds were used this way?”

Source: Representative survey in Riga in summer 2024.

Figure 2. Responses from Vienna. “Would you support congestion pricing in a referendum if the collected toll funds were used this way?”

Source: Representative survey in Vienna in summer 2024.

In Riga, the cashback option is the most popular, with more participants supporting than opposing it. The overall positive attitude towards congestion pricing with the cashback option suggests that Riga might already be ready to implement it. In Vienna, the cashback ranks a close second after the green transport option. This result shows that cashback might be a viable option also in Vienna.

Conclusion

To overcome public skepticism towards road congestion pricing, we propose a cashback mechanism. It involves returning toll money back to drivers as public transport cashback. The cashback mechanism has several benefits: drivers retain some control of their money, there is no need to redistribute collected toll funds, and it helps reduce congestion without major investments in road infrastructure. Surveys in Riga and Vienna in 2024 show support for the cashback option. While the specifics of such a solution should be tailored to each city’s needs, many cities struggling with congestion could benefit from implementing road congestion pricing with a public transport cashback mechanism.

Acknowledgment

This policy brief is based on a collaborative research effort by economists Sergejs Gubins from Riga (BICEPS) and Stefanie Peer and Martina Reggerova from Vienna (WU) as part of the “Tolls That Work” project, supported by the ERA-NET research grant. Agreement No ES RTD/2023/11. See project updates on the webpage:

https://www.wu.ac.at/en/spatialeconomics/projects/city-tolls-that-work

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

How Social Assistance Shapes Election Outcomes: The Case of Georgia

Posted on January 27, 2025 | Policy Brief

Protesters waving Georgian flags in front of the Parliament building in Tbilisi, Georgia, during a public demonstration following election outcomes.

This policy brief investigates the relationship between social assistance programs and election outcomes in Georgia, focusing on the 2024 parliamentary elections. Our regression analysis establishes a statistically significant link between an increase in social assistance beneficiaries and the vote share obtained by the incumbent Georgian Dream party. The results raise critical questions about the potential use of social assistance programs as a strategic political tool. Specifically, a 1 percentage point increase in targeted social assistance beneficiaries as a share of the population lead to an, on average, 0.5 percentage point increase in the Georgian Dream’s vote share, even after controlling for poverty-related factors. The findings recognize the dual impact of social assistance programs – alleviating poverty while shaping political behavior. They also underscore the need for ensuring that social assistance remains focused on addressing the needs of vulnerable populations without exerting undue political influence.

Introduction

The relationship between social assistance programs and electoral outcomes has gathered significant attention in both academic and policy circles, especially in the last decade. Social assistance programs, designed to support vulnerable populations, often carry political implications, particularly in developing democracies where incumbent governments may leverage these programs to secure voter loyalty. In Georgia, one of the largest components of social assistance is the targeted living allowance program, which, unlike other types of social assistance – such as those for individuals with special needs, internally displaced people, or elderly population –relies on assessing the beneficiaries’ poverty levels through proxy means testing (PMT). This makes subsistence allowance benefits vulnerable to biased, favorable selection by those in power. Allegations exist that the government may have strategically used this program, including increasing the number of beneficiaries in the lead-up to elections to secure votes or threatening existing beneficiaries with the withdrawal of their assistance based on their disclosed political preferences (Shubladze (2024); Japaridze (2023); Social Justice Center (2024)).

This policy brief explores the impact of social assistance on electoral outcomes in Georgia, specifically assessing whether increases in the number of targeted subsistence allowance beneficiaries during the 2020-2024 period influenced the votes received by the incumbent party in the 2024 parliamentary elections.

This analysis is especially important given the recent developments in Georgia’s political landscape. The 2024 parliamentary elections marked a critical juncture, with the Georgian Dream claiming to have secured 53.93 percent of the votes. Concerns over the fairness and transparency of the elections have been widespread. The Organization for Security and Co-operation in Europe’s (OSCE) Office for Democratic Institutions and Human Rights (ODIHR) reported systematic election irregularities, including pressure on voters, media bias, unequal campaign conditions, and election-day practices that compromised the ability of some voters – including public sector employees and recipients of social assistance – to cast their ballots without fear of retribution.

Our regression analysis documents a positive relationship between the number of living allowance beneficiaries and the votes garnered by the incumbent party across Georgian municipalities, raising further concerns about the integrity of the electoral process, and the allocation of state funds.

Political Implications of Social Assistance Programs: A Global Perspective

The link between social assistance and electoral outcomes has been widely studied. Social assistance programs often serve a dual purpose: they alleviate poverty and provide tangible support to vulnerable citizens while also shaping political behavior, particularly voting patterns. These programs can enhance incumbents’ electoral support by fostering gratitude among recipients, signaling government competence in addressing social needs, or creating concerns among beneficiaries that their political preferences if exposed, may influence the government’s decisions when choosing the beneficiaries of social assistance.

Research by De La O (2013) provides a compelling case in the context of Mexico. Examining the Progresa/Oportunidades conditional cash transfer program, De La O find that the program led to an increase in both voter turnout and incumbent vote share.

Zucco (2013) contributes further evidence from Brazil, where the Bolsa Família conditional cash transfer program emerged as a cornerstone of electoral strategy. Zucco demonstrates that municipalities with higher proportions of cash transfer beneficiaries tended to favor incumbent candidates in three different presidential elections, establishing a clear link between social assistance and voting behavior.

Adding to this body of work, Layton & Smith (2015) provide further insight into the nuanced ways in which targeted social assistance programs influence voter behavior in Latin America. The authors theorize that such programs simultaneously mobilize non-voters and convert opposition supporters, with variations based on country-level political and programmatic differences.

In addition, recent research from Indonesia further illustrates the impact of social assistance budgets on electoral outcomes. A study by Dharma, Syakhroza, and Martani (2022) examines 212 regencies and cities in Indonesia where incumbents participated in local elections. The findings reveal a direct positive effect of social assistance spending on incumbent votes. The authors further claim that high political competition counteracts incumbents’ advantages and mitigates the effectiveness of such spending.

The international literature thus provides valuable motivation for exploring the Georgian case, where social assistance may play a similar role in shaping voting behavior.

The Georgian Context

The deeply controversial October 26, 2024, parliamentary elections in Georgia mark a pivotal moment in the country’s political history. According to the Central Election Committee of Georgia, the ruling party, the Georgian Dream, secured 53.93 percent of the votes, maintaining its dominant position in Georgian politics. However, the elections were accompanied by widespread allegations of electoral malpractice, casting a shadow over their legitimacy and raising concerns about the future of democratic governance in the country.

OSCE’s ODIHR provided a comprehensive observation of the electoral process, noting both positive aspects and critical shortcomings. While the elections were generally well-administered, ODIHR’s final report emphasized significant concerns related to the broader political environment. Key issues included the adoption of legislation that undermined fundamental freedoms, restrictions on civil society, and a pervasive atmosphere of voter intimidation. Specific election-day practices, such as pressuring voters and leveraging administrative resources, were highlighted as undermining the integrity of the process. The report also mentions instances in 16 municipalities where public sector employees and economically vulnerable groups, particularly those reliant on social assistance, faced pressure to support the ruling party. Such fear of losing social benefits or facing retribution at work creates an atmosphere where voters struggle to form independent opinions and vote independently.

Further scrutiny from independent analysts has shed light on systematic irregularities that suggest the elections may not have reflected the genuine will of the Georgian electorate. Gutbrod (2024) suggests that tactics such as vote buying, mass intimidation, and direct manipulation of electoral outcomes were employed, leading to statistical anomalies. Specifically, the Georgian Dream’s support increased disproportionately in precincts linked to reported violence and irregularities. Additionally, social assistance beneficiaries were identified as a target group for snowball mobilization, organized by individuals affiliated with the Georgian Dream – a method where participants are encouraged to mobilize or identify a certain number of additional people to expand voter outreach and engagement.

Social Assistance in Georgia

The Law of Georgia on Social Assistance outlines several types of social welfare programs aimed at addressing the needs of vulnerable populations. These include living allowance, reintegration assistance, foster care allowance, adult family member care allowance, non-monetary social assistance, and social package. Among these, the targeted social assistance program, commonly referred to as the “living allowance“, holds particular significance. This program is designed to provide financial support to families living in extreme poverty. Eligibility for the living allowance is determined through a proxy means test that evaluates the socioeconomic conditions of applicants, ensuring that the assistance reaches those most in need. For this policy brief, the focus will be on beneficiaries of the living allowance (hereafter social assistance beneficiaries), as their numbers and electoral behavior present a unique opportunity to analyze the intersection of social assistance and voting patterns in Georgia.

As of October 2020 (previous parliamentary elections’ date) 142,870 families in Georgia received social assistance, benefiting a total of 510,343 individuals. The total amount of social assistance transfers during this period amounted to 28,825,259 GEL. Over the next four years, leading up to the 2024 Parliamentary Elections, social assistance grew significantly. By October 2024, the number of families receiving assistance had increased by 25 percent to 178,107 families, while the number of individual beneficiaries rose by 34 percent, reaching 684,432. The most notable expansion occurred in the total amount of social assistance transfers, which surged by 143 percent to 69,936,512 GEL. This corresponds to a cumulative annual growth rate of 25 percent (Social Service Agency of Georgia, 2024).

In 2022, an important modification was introduced for social assistance beneficiaries aged 18 years to retirement age and without disabilities or serious health conditions, offering employment opportunities mainly, in the public sector with a salary of up to 300 GEL per month. These wages did not affect recipients’ existing social assistance benefits. Participants had the option to take suitable public sector jobs, formalize any informal employment, or, if formally employed in the private sector, provide necessary documentation. The modification covered also new beneficiaries who were not already formally employed. Notably, families or individuals enrolled in the program were guaranteed eligibility for a living allowance for four years, as their social assistance status would not be reassessed during this period.

As of October 2024, 50,962 families were enrolled in the program with guaranteed social assistance, accounting for 28.6 percent of all families receiving social assistance. The monthly spending of social assistance transferred to these families amounted to 22,766,706 GEL, representing 33 percent of the total social assistance transfers.

The significant increase in social assistance beneficiaries and the introduction of the 2022 program for employing social assistance recipients, guaranteeing them four years of social assistance transfers, highlight the growing scope and influence of targeted social welfare initiatives in Georgia. While these developments may have addressed pressing socioeconomic challenges, they also raise important questions about the potential political motivations. Specifically, the substantial increase in the number of beneficiaries and the guaranteed eligibility linked to employment programs could be interpreted as mechanisms to foster voter loyalty and mobilization in favor of the ruling party.

Methodology and Results

To examine the relationship between the increase in social assistance beneficiaries and electoral outcomes, particularly the votes garnered by the incumbent Georgian Dream party, we employ a regression analysis framework. This statistical method allows us to explore whether and to what extent the growth in social assistance recipients is associated with the changes in the vote share of the incumbent party. Since social assistance depends on the varying levels of poverty across municipalities, we incorporate control variables that isolate the effect of economic well-being, minimizing potential confounders.

The study utilizes data from two primary sources: information on social assistance recipients, including families, and individuals, and the total amount of transfers across municipalities, was retrieved from the Social Service Agency of Georgia. This dataset covers 64 municipalities (and self-governing cities) in Georgia. From 2022, data includes families and individuals guaranteed to retain their socially vulnerable status for four years under the State Program for Promoting Public Employment. Second, election data was sourced from the Central Election Commission of Georgia, covering both the 2024 and 2020 parliamentary elections. The 2024 data covers the results from both electronic and non-electronic voting. Key variables include the number of registered voters, total votes cast, and votes obtained by the Georgian Dream and opposition parties. This election data is also aggregated at the level of the 64 municipalities (and self-governing cities).

Information on poverty levels in Georgian municipalities is not publicly available; therefore, we utilize control variables for employment and economic activity with the latter proxied by either the municipalities’ tax revenues or the value added generated in the private sector. Information on employment and value added are gathered from the National Statistics Office of Georgia, while data on tax revenues is retrieved from the Ministry of Finance.

The following table describes the results of the regression analysis.

Table 1. Regression analysis results

Source: Author’s calculations.
Note: The values in parentheses indicate the p-value. *Significant at the 10 percent level; **Significant at the 5 percent level; ***Significant at the 1 percent level.

The first regression (column 1) investigates the relationship between the change in social assistance beneficiaries as a share of the population and the change in the Georgian Dream party’s vote shares, displaying a significant relationship between the two. Specifically, the coefficient (0.49) is significant at the 5 percent level, suggesting that a 1 percentage point increase in social assistance beneficiaries as a share of the population, increases the vote share for the Georgian Dream by approximately 0.49 percentage points.

To control for the effect of poverty, we first use employment rates in 2023 (the latest available data) as a proxy for poverty. Column 2 presents these results. In this specification, the coefficient for the change in social assistance beneficiaries remains significant at 5 percent level and its value (0.47) remains consistent with the previous specification. The model further suggests that poverty is also positively and significantly (at the 1 percent level) associated with incumbent votes – the higher the poverty (lower employment) in municipalities, the higher the Georgian Dream vote share.

In the next step (column 3), we model the relationship between the change in the Georgian Dream’s vote share, change in employment as a share of the population, mobilized local tax revenues per capita, and the change in number of social assistance beneficiaries as a share of the population. Change in employment, calculated as the difference between 2019 and 2023 employment levels (as a share of the population), is used as a proxy for change in poverty.  Tax revenues per capita for 2023 reflect economic activity across municipalities and self-governing cities, serving as a proxy for well-being. As seen in the table, change in employment is not statistically significant, however, the amount of tax revenues mobilized across municipalities is modestly significant. The coefficient for change in social assistance beneficiaries is once again statistically significant and consistent with the other specifications in terms of magnitude (at 0.51).

As a robustness test (column 4) we replace the previously used proxy for economic well-being (tax revenues), with the private sector value added per capita for 2023, which significantly (at the 1 percent level) correlates with an increase in the vote share for the incumbent party. Changes in employment remain insignificant. Importantly, the coefficient for change in social assistance beneficiaries remains positive (0.53) and statistically significant at the 1 percent level.

The discussed regression models were tested for a different dependent variable as well. In addition to observing the impact of change in vote shares, we also analyzed the impact on the number of votes cast for the Georgian Dream party between the 2020 and 2024 Parliamentary Elections. Changes in social assistance beneficiaries remain a significant explanatory variable in this specification as well.

The estimated impact of social assistance is consistent across all models, both in magnitude and significance, reinforcing the finding that increases in living allowance beneficiaries are strongly associated with higher vote shares for the Georgian Dream party, underscoring the critical role of social assistance in shaping electoral outcomes.

Conclusion

The analysis demonstrates a strong and statistically significant relationship between the increase in social assistance beneficiaries and the vote share obtained by the incumbent Georgian Dream party in the 2024 parliamentary elections. Even after controlling for poverty and economic well-being, the results highlight the impact of social assistance in shaping electoral outcomes. The findings suggest that a 1 percentage point rise in social assistance beneficiaries as a share of the population translates into a 0.47–0.53 percentage point increase in the Georgian Dream’s vote share. When contextualized within the overall election results, these estimates suggest that the expansion of the targeted social assistance program may have garnered the Georgian Dream an additional 45 ,500 to 50,000 votes, representing 2.2–2.5 percent of the total votes.

The results raise critical questions about the potential use of social assistance programs as a strategic political tool. The robustness of the relationship across multiple models suggests that the observed trends are not merely byproducts of economic conditions but reflect a deliberate link between social assistance expansion and electoral outcomes. The implications are significant for democratic governance in Georgia. The strategic use of social welfare programs risks undermining public trust in the electoral process and highlights the need for greater transparency and accountability in the implementation of social assistance policies. Recognizing the dual impact of these programs – alleviating poverty while potentially shaping political behavior – will be critical in fostering fairer electoral conditions and ensuring that social assistance remains focused on addressing the needs of vulnerable populations without undue political influence.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Development Day 2024: Integrating Ukraine, Moldova, and Georgia into the European Union

Posted on January 20, 2025 | Policy Brief

Flags of Ukraine, Moldova, and Georgia alongside EU flags in a conference setting.

For Ukraine, Moldova, and Georgia, integration into the European Union (EU) is a pathway to modernization, economic development, and increased resilience against authoritarianism. At this year’s Development Day Conference, hosted by the Stockholm Institute of Transition Economics (SITE), policymakers, researchers, and experts convened to discuss the shared challenges, opportunities, and reforms required for these countries’ successful EU accession.

This policy brief draws on the insights from the conference, briefly outlining the discussions across panels and presentations on governance reforms, hybrid threats, economic transformation, and security challenges.

The Geopolitical Context for Enlargement

The Russian invasion of Ukraine has intensified the European Union’s strategic focus on enlargement. Ukraine, Moldova, and Georgia find themselves at a crossroads, where integration into the EU is not merely aspirational but essential for safeguarding sovereignty and ensuring economic and political stability. The urgency of this enlargement stems from the need to counteract Russian aggression and bolster the EU’s geopolitical standing.

At the opening sessions of the Development Day Conference, three special guests offered their respective countries’ perspectives. Yevhen Perebyinis, Ukraine’s Deputy Minister of Foreign Affairs, underscored how Ukraine’s integration process aligns with its defense of European values against Russia’s aggression. Cristina Gherasimov, Moldova’s Deputy Prime Minister for European Integration, highlighted Moldova’s efforts to advance reforms while countering persistent Russian hybrid threats, including systematic election interference. Christian Danielsson, Sweden’s State Secretary to the Minister for EU Affairs, accentuated the necessity of ensuring that the EU is ready for enlargement, something political leaders now see as an imperative in the shadow of Russia’s war on Ukraine. Similarly, discussions emphasized Georgia’s historical and policy-oriented commitment to Europe, despite recent democratic backsliding and a recent pivot toward Russia.

Challenges on the Pathway to EU Accession

The integration paths of Ukraine, Moldova, and Georgia face numerous challenges. Critical areas for alignment with EU standards include governance reforms, anti-corruption efforts, and institutional capacity building. Moldova has made strides in public administration reform and jumped significantly on the Corruption Perceptions Index from 120th place in 2019 to 76th in 2023. However, persistent gaps in judicial independence and public procurement transparency remain hurdles. Similarly, Ukraine has enacted sweeping reforms under extraordinary wartime circumstances, reflecting a persistent and widespread commitment to European values. Yet, continued progress in judicial and financial oversight is essential, with the administrative framework in these areas needing improvement in both countries.

Russia’s hybrid warfare poses a persistent and evolving threat to democratic resilience across the region. Moldova’s elections in 2024 showcased large-scale, sophisticated interference by Russian actors. This interference began well before election day and continues in the form of disinformation campaigns and energy blackmailing in the Transnistria region. In Georgia, Russian influence compounds the challenges of domestic political unrest, particularly as the ruling party engaged in substantial electoral fraud and manipulation to secure its position in the 2024 October elections. These challenges highlight the need for robust countermeasures, including enhanced cybersecurity and strengthened democratic institutions across the candidate countries. It also points to the need for support from the international community, especially in the case of Georgia, where protesters are currently taking to the streets to challenge the widely recognized electoral fraud.

Economic transformation and alignment also remain a critical challenge. Ukraine’s economy, suffering wartime devastation, requires extensive reconstruction, with the cost of infrastructural damage alone nearing its annual GDP. Ukraine’s vast agricultural sector, a major player in global markets, will require careful integration into the EU to address compliance costs and alignment with the Common Agricultural Policy while maintaining its competitive edge. Moldova faces significant challenges in effectively communicating the benefits of EU integration to its population, a critical issue in countering Russian influence and maintaining public support for reforms. Despite clear economic progress, such as the increase in Moldovan exports to the EU, many Moldovans remain skeptical about the long-term benefits of EU alignment. This skepticism is particularly pronounced in regions like Gagauzia, where pro-Russian sentiment is strong and local populations are vulnerable to disinformation and propaganda.

As emphasized by multiple panelists, targeted communication strategies are vital to ensuring that the benefits of EU integration are understood across populations. Concrete examples—such as enhanced economic opportunities, improved infrastructure, and access to EU funding—must be clearly communicated to counteract Russian narratives and build broad-based support for EU accession.

In this regard, pre-accession funding offers a potentially transformative tool. The successful use of pre-accession funding in Poland in the 1990s and early 2000s demonstrates the potential for such resources to modernize infrastructure, connect markets, and build institutional capacity, a capacity that has later proved pivotal to overcoming democratic backsliding. Poland serves as a reminder that alignment and integration may take time, but also clearly showcases the economic and social benefits it can yield.

During the conference, security concerns were at the core of the enlargement discussion, with several panelists emphasizing NATO’s historical role as a critical security complement for EU member states. However, Ukraine’s potential EU accession may advance without parallel NATO membership. This raises significant challenges, as the absence of NATO guarantees leaves Ukraine vulnerable to further Russian aggression. Panelists highlighted the urgent need for the EU to adopt concrete security measures, such as strengthened hybrid defense capabilities, cybersecurity frameworks, and coordinated responses to disinformation—threats already witnessed in Moldova and Georgia. Additionally, ensuring Ukraine’s security would require increased military and financial support from EU member states to safeguard territorial integrity and maintain resilience against Russia, argued a necessity by several panelists.

The Opportunities of Enlargement

The integration of Ukraine, Moldova, and Georgia into the European Union offers profound opportunities for these states. It represents access to the single market, pre- and post-accession funding, and vital structural support that can accelerate modernization efforts. Overall, this can reduce the countries’ infrastructure gaps and cause an increase in foreign direct investment. Beyond economic gains, EU support drives crucial institutional reforms, enhances public administration capacity, and provides a framework for addressing corruption and strengthening the rule of law—key challenges across all three countries.

For the EU, enlargement would entail strategic benefits aligned with its new geopolitical focus and long-term economic goals. Ukraine’s reserves of critical raw materials, including lithium and titanium, are essential for Europe’s green transition. Furthermore, Ukraine and its defense industry offers strategic benefits to Europe by bolstering collective security. Its agricultural capacity remains pivotal not only for the EU but for global food security, and its IT sector provides additional growth potential. Moldova and Georgia, on the other hand, offer untapped market potential and workforce integration opportunities, which could strengthen the EU’s competitive edge. Enlargement also represents a critical opportunity to counter the threat from Russia, manifesting the Union as a geopolitical leader committed to stability, democracy, and shared values.

However, as voiced throughout the conference, the EU must prioritize clear communication of these benefits. Concerns about increased competition in existing member states need to be met with transparency while communicating the long-term economic and security advantages of enlargement. Involving the business perspective in the enlargement process and ensuring that both candidate countries and current EU citizens and businesses see tangible benefits early in the process will be key to sustaining both momentum and public support. Such messaging could include the fact that the EU is originally a peace project and that the counterfactual scenario to the current enlargement ambitions is Russia and its wars creeping even closer to the Union’s border. In regard to the business sector, it could be emphasized that enlargement associated risks can be met with risk sharing instruments and credit guarantees.

As emphasized by several speakers, the EU also needs to ensure that it is ready for enlargement in terms of capacity. As the EU was not initially built to be this large, a further expansion requires the Union to critically reflect on how to ensure it will stand up for the rule of law and all member states’ adhesion to EU principles in the years to come.

Concluding Remarks

How to facilitate the accession of Ukraine, Moldova, and Georgia into the European Union was the topic for discussion at the 2024 Development Day. The discussions highlighted the substantial early progress and rapid reforms undertaken by Ukraine while being a country at war. Moldova’s steady progress toward its ambitious 2030 accession target underscores its commitment to reform, though challenges remain in securing public trust and countering Russian interference. Georgia, meanwhile, serves as a warning of how quickly democratic gains can erode, with political turmoil and Russian influence threatening its European path. These examples underscore the need for sustained support and clear communication of the benefits of EU integration. Panelists and participants also underscored that integrating these nations is not merely about expanding the EU—it is a vital response to ongoing geopolitical threats, in particular from Russia, and an affirmation of the EU’s foundational values.

Ultimately, the enlargement of the EU to include Georgia, Moldova and Ukraine holds significant potential, both for the aspiring members and the EU itself. However, as the discussions at Development Day 2024 showcased, such enlargement requires robust partnerships, unwavering and early support, and a recognition that integration strengthens the EU as a whole, ultimately positioning the EU as a much-needed major democratic geopolitical actor.

List of Participants

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Christmas Time in Poland Through the Lens of Gender Equality

Posted on December 18, 2024 | Policy Brief

Christmas tree with festive red and gold decorations on a street during Christmas time in Poland, with people in winter clothes walking in the background.

In the Christmas season, we examine how people in Poland allocate their precious minutes in the days before and during the holidays. We use data from the Polish Time Use Survey and show that, in several aspects of time use, Christmas is indeed special, and that there are notable differences in how men and women allocate their time to work and pleasure. Women spend more time than men on household chores and preparing meals, and in the latter case the imbalance is particularly striking: on average women spend two hours more per day cooking ahead of the holidays.

Introduction

Every year, billions of people around the world spend the end of December enjoying time with friends and family. Many celebrate Christmas on the 25th and 26th, while others bid farewell to 2024 and welcome a new year. Celebrations and fun are often preceded or combined with intensive preparations—cooking, cleaning, shopping, and travel. Time is of the essence, and as with other major celebrations, the 2024 Christmas season is likely to feel too short, intensive, and possibly stressful.

In this policy brief we look at how people in Poland allocate their precious minutes during these special days. Every ten years the Polish Central Statistical Office collects detailed data on time use, interviewing over 35 000 individuals, most of whom fill in diaries of their time allocation over two different days. This results in over 70 000 diaries with information divided into 144 ten-minute intervals. We use the latest available survey wave from 2013 in which we have information from 72 967 correctly completed diaries, on average almost two hundred diaries per day (the 2023 data is not yet available for research purposes). Particularly interesting is that the data collection in 2013 was carried out in the days running up to Christmas and continued through the 2013 holiday season. This gives us a unique chance to examine the allocation of time over this period, and specifically compare how men and women spend their time in preparation for celebrations, and during the holidays. We compare Christmas time allocation to diaries filled in on weekdays and Sundays in November to show, on the one hand, that the way people in Poland spend their holidays differ in several ways from a regular Sunday, and that allocation of time is particularly unique in the days running up to Christmas. This relates both to how much time is spent on getting ready – preparing meals, cleaning the house, etc., as well as to how these chores are allocated between men and women.

Time Use Diaries in Poland

Polish time use data is unique in its scope and content. During the year of data collection over 35 000 participants complete detailed time use diaries on two days – one weekday and one weekend day. Every ten-minute slot is assigned a category for the ‘main activity,’ with the option to record a ‘secondary activity’ for multitasking. The 163 detailed categories range from broad types like “sleeping” or “time devoted to main job” to specific activities such as “repairing household equipment” or “handcrafts”. The large number of diaries and narrow activity focus enables unique analyses of time use and allows studying specific days (for an example, see Adena et al., 2023).

In 2013 the diaries cover 355 days and on these ‘active’ days the number of completed diaries varied from 116 (on 6th November) to 562 (6th January). The diaries were completed also on the 24th and 23rd of December respectively, (239 diaries) and on both days of Christmas (25th and 26th of December, 250 diaries). These special four days – which happened to start on a Monday – are compared to four November weekdays, the consequent days starting on Monday the 25th of November (549 diaries), and two November Sundays (17th and 24th of November, 737 diaries).

Is Christmas Time Different?

The 163 different categories of time use are aggregated into 10 groups: (1) preparing meals, (2) household work and cleaning, (3) meals, meetings and celebrations, (4) church and prayer, (5) watching TV, using computer, (6) walks, games and hobbies, (7) shopping, (8) work and study, (9) personal care, (10) sleeping.

These broad categories include activities which are similar and/or related to the broad headings. For example, ‘household work and cleaning’ includes vehicle maintenance or cleaning the basement, while ‘meals, meetings and celebrations’ include also ‘phone calls with family and friends’ or ‘reading, playing and talking with children’. The broad activity categories were identified by examining the most common activities given the time allocated by respondents to the listed activities in November and December. Other less common activities were then added to those main categories. The average number of minutes allocated to the ten categories in the weekdays and Sundays of November, the two days before Christmas, and the Christmas holidays is presented in Table 1.

Table 1. Time Allocation: average number of minutes per day allocated to ten aggregate activity categories

Notes: ‘November weekdays’: 25th-28th November 2013; November Sundays: 17th and 24th of November 2013. Numbers represent unconditional averages.
Source: Own calculations using the Polish Time Use Survey 2013.

As evident there are interesting differences in the pattern of time allocation between the four groups of days which seem to be a result of discernible differences in behaviour. On ‘usual weekdays’ in late November respondents spend on average about 70 minutes on meal preparations and almost 90 minutes on housework. This increases significantly on the 23rd and 24th of December, respectively, to nearly three hours (169 minutes) and over two hours (125 minutes). As expected this then drops substantially over the two days of Christmas. In terms of housework and cooking, Christmas days differ slightly from a typical Sunday. However, even on these days, cooking and household tasks do not come to a complete halt: there is still work to be done! It is clear, though, that the brunt of the preparation is conducted in the days leading up to Christmas. It should be noted also that in Polish tradition the main Christmas celebration usually takes place in the evening of the 24th, although preparations often run all the way up to that evening meal. We can observe for example that the average working time on 23rd-24th December is much lower compared to late November and the time spent on attending mass or prayer is already significantly higher. The preparations on those two days seem to ‘eat in’ to the amount of sleep and time spent in front of the TV. We see more time devoted to meals and celebrations compared to normal weekdays in November, although the values listed are averages over the two days including the 23rd.

The average allocation of time on the two days of Christmas stands out in a few categories. In particular more time is allocated to pleasure: ‘walks, games and hobbies’ take up 171 minutes per day on average over the Christmas holidays, which is over an hour more compared to a normal Sunday. Watching TV is another favourite Christmas pass-time (191 minutes), although people seem to watch slightly less TV on Christmas compared to November Sundays. While meals and celebrations take up more than four hours per day on average, this is only slightly longer than on a normal Sunday (263 vs 247 minutes), and Christmas sleeping patterns are also very similar compared to Sundays – with little catching up on sleep lost in the lead-up to the holidays.

Work and Pleasure over Christmas – Gender Differences in Time Allocation

In Figure 1 we present the average allocation of time in Poland in the run up to Christmas and over the two holidays separately for men and women. The figure depicts the ten aggregated categories, and for each set of days the outer ring represents the average time allocation among women, while the inner ring shows the average time allocation among men. We see some striking differences. Women spend almost 3.5 hours on average on cooking on each of the two days before Christmas, which is nearly 1.5 hours more compared to men. The difference in household work is not as striking, and men tend to spend more time on pre-Christmas shopping (35 vs 26 minutes per day on average). Men also spend more time at work during these two days (189 vs 110 minutes), although much of the time which is not spent on cooking seems to go to leisure: on average men watch more TV and spend more time eating and socializing.

Work and leisure are also unequally divided between men and women on the two days of Christmas. Women spend more than 2 hours per day on average on cooking and cleaning, while men spend only about 50 minutes per day. Over Christmas men spend more time in front of the TV, but they also devote more time to paid work, with an average of about 100 minutes per day. Celebrations and meals over the Christmas season naturally take up much of the time, and in this case the disproportions are not as large, though both in the run up and during Christmas men tend to spend slightly more time ‘at the table’ than women. The difference is more pronounced for the days running up to Christmas (23-24th December) which is noteworthy, given that the evening on the 24th is traditionally the main family celebration time in Poland.

Figure 1. Christmas time allocation among women (outer rings) and men (inner rings)

Notes: A: preparing meals; B: household work and cleaning; C: meals, meetings and celebrations; D: church and prayer; E: watching TV, using computer; F: walks, games and hobbies; G: shopping; H: work and study; I: personal care; J: sleeping. The rings represent a full 24-hour day with all reported activities collected into ten aggregate activity categories. The values are averages for the samples interviewed on 23rd and 24th of December 2013 (Figure 1a) and on the two days of Christmas (25th and 26th of December 2013). Source: Own calculations based on the Polish Time Use Survey 2013.

Is Christmas Time Special? The Gender Perspective

In this section we examine the data in a more formal way by adjusting the patterns of time use of men and women for differences in age, education and household size. We focus on six out of the ten categories distinguished above and regress time (in minutes) within these categories separately for the four sets of days detailed in Table 1: weekdays in November (25th-28th), Sundays in November (17th and 24th), as well as for 23rd-24th December and 25-26th December. The estimates of the coefficient on the female indicator included in these regressions reflect how much more or how much less time women spend on a specific activity category compared to men, conditional on the controls.

Figure 2. Women vs men: differences in time allocation in November and over Christmas

Notes: The bars represent coefficients on the female dummy estimated in linear regressions of time spent on a specific activity in a specific set of days. Control variables include age, education and household size. The specific days are;
‘November: weekdays’: 25th-28th November 2013; ‘November: Sundays’: 17th and 24th of November 2013.
Source: Own calculations using the Polish Time Use Survey 2013.

In Figure 2 we present the results for the six time-use categories, in each case showing the estimated coefficient on the female indicator for the four sets of days. Since the samples are quite small (see Table 1), the standard errors of the estimates are relatively large. However, they still allow us to infer interesting patters of time use differences between men and women. The most visible difference concerns the time allocated to preparing meals in the run up to Christmas. While women spend more time preparing meals in all four-day categories, the days just before Christmas are clearly special (Figure 2a). On average on the 23rd-24th of December, women spend almost two hours longer on this activity per day compared to men, while on a ‘normal’ Sunday or weekdays this difference is ‘only’ 51 and 61 minutes, respectively. Interestingly, women continue spending more time than men on meals preparation also over the holidays, although the extra minutes in this case resemble a usual Sunday. The latter similarity seems to be repeated in the estimates related to ‘household work and cleaning’ (Figure 2b) – women once again spend more time doing chores: 18 minutes more than men on a normal Sunday and 21 minutes more over Christmas. In this category we do not see any statistically significant imbalances during the days leading up to Christmas (the point estimate however suggests that also on those days women ’out-perform’ men by about 15 minutes per day). On the other hand, while (except for November Sundays) the differences are not statistically significant, women seem to spend more time on ‘walks, games and hobbies’ compared to men and the difference is highest over the Christmas holidays (35 minutes per day, see Figure 2c). Since the day is 24 hour long for everyone, we should see some differences going the other direction – activities where women spend less time compared to men. Once again we see some striking patterns in the days running up to Christmas with women spending much less time compared to men on ‘meals, meetings and celebrations’ (60 minutes, see Figure 2d) as well as on ‘work and study’ (80 minutes, see Figure 2f).

With all the work that seems to be going into preparing meals and other housework, it is perhaps good to see that at least on the 25th and 26th of December women spend as much time as men on Christmas celebrations (Figure 2d). It should be noted though that men get some additional ‘passive’ rest in front of the TV on those days (Figure 2e). Differences in TV watching patterns over Christmas are similar to those observed on ‘normal’ Sundays and the days just before the holidays – men watch TV by an average of 57 and 41 minutes/day more than women. Differences between men and women in the time spent on ‘work and study’ just before Christmas are not very different compared to ‘normal’ weekdays when men on average work nearly 100 minutes per day more compared to women. For this category Christmas days seem different from a ‘normal’ Sunday: women tend to work less during the holidays compared to men (by about 46 minutes/day), but we see virtually no difference in labor market activities on a normal Sunday.

Conclusion

If patterns of time-use have not changed much over the past ten years, Poles will spend almost four and a half hours per day on average enjoying meals and celebrations during the coming Christmas. They will add to this, on average, slightly more than three hours in front of the TV and about the same time enjoying walks, games and hobbies. The holiday will be preceded by intense preparations – in particular regarding preparing meals (170 minutes per day on the 23rd and 24th of December) and household work and cleaning (125 minutes per day). As we show in this brief, in 2013, the time burden of holiday preparations and household chores related to Christmas, was certainly not shared equally between men and women. Women spent much more time on those activities, especially in the days running up to Christmas, but also on the 25th and 26th of December.

With the upcoming release of the 2023 Polish time use data we will be able to examine whether patterns of Christmas time use have changed over the last decade. However, how our precious time over this year’s holiday season will be allocated is entirely up to us.

Merry Christmas!

Acknowledgment

Data used for the analysis in this brief come from the 2013 Polish Time Use Survey provided by the Polish Central Statistical Office (GUS). GUS bears no responsibility for the presented results and interpretation. I am very grateful to Daniel Hamermesh for his suggestions and comments.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Gender Board Diversity Across Europe Throughout Four Decades

Posted on December 16, 2024 | Policy Brief

Top-down view of a team analyzing Gender Board Diversity statistics in a corporate setting.

Despite comprising a large share of the workforce, women remain a minority in corporate boardrooms across Europe. While progress has been made in recent decades among public (listed) firms, diversity lags behind in private corporations. This policy brief showcases evidence from the Gender Board Diversity Dataset (GBDD) – a newly released, unique data source which covers a comprehensive sample of European private and public corporations over multiple decades. Uniquely, the GBDD encompasses private (non-listed) companies, a novel method for identifying the gender of board members based on linguistic and cultural heuristics, and a cross-country harmonization of firm-level data. These features make the GBDD a great tool for answering policy-related questions and enable cross-country and cross-sector comparisons. As such, the GBDD can help ensure that policies aimed at promoting gender board diversity are scientifically well grounded.

Background

The labor force participation rate of women in Europe has been rising over the last few decades and is approaching the participation rate of men. However, the proportion of company board positions held by women is still significantly lower. This issue has generated heated debate among academics (e.g. see Nguyen et al., 2020, for a recent literature review) as well as among the general public. It has also prompted several countries to mandate gender quotas for some companies (typically public companies or the largest limited liability companies). For example, in Norway, large and medium-size firms are mandated to guarantee that both women and men account for at least 40 percent of board members. Given the increasing proliferation of mandated gender board quotas across countries, it is imperative that the public be aware of the main facts concerning gender board diversity in a broad set of companies i.e. those that make up the largest proportion of the economy, offer the majority of jobs, and often remain outside the scope of quota legislation.

The Gender Board Diversity Dataset

The Gender Board Diversity Dataset (GBDD), created by Drazkowski, Tyrowicz, and Zalas (2024), provides a novel cross-country perspective on women in management and supervisory boards over the past four decades. The GBDD is based on firm-level registry data from Orbis, which the authors have harmonized to ensure comparability across countries. A key feature of the GBDD is that it covers registry information from both public and private (non-listed) companies. This makes it a comprehensive source of information as the majority of board positions, as well as the majority of jobs in general, are in private rather than public companies. Data on private companies are scarce, and the GBDD is one of very few data sources containing this information across Europe. The GBDD is based on a sample of over 28 million unique firms from 43 European countries observed, on average, for around seven years. It contains information about nearly 59 million individuals who sit on management and supervisory boards and covers the period between 1985 and 2020.

Another key component of the GBDD is the identification of the gender of board members, which is a key innovation compared to other studies that use Orbis data. While the original data do not specify the gender of individuals until 2010, they do include names and surnames, which the creators utilized to perform gender identification. By applying cultural and linguistic heuristics, they were able to determine the gender of over 99 percent of the board members in their sample. For example, in some languages (e.g. Czech), surnames end with a gender-specific suffix, while in other languages (e.g. Polish), given names of women end with a vowel.

The GBDD reports several measures of gender board diversity computed for countries over time, as well as for sectors in each country over time. As such, it is a unique source of information about gender board diversity in corporate Europe, and it can serve as a useful guide for policymakers and analysts. The data are publicly available and can be downloaded in various formats from the website of the authors’ research group: https://grape.org.pl/gbdd.

The Absence of Women in Boardrooms

A key insight emerging from the GBDD is that, despite women holding on average 22 percent of all board positions in a given industry, more than two-thirds of all firms report no women in their boardrooms. More specifically, 68 percent of sectors across the European continent over the past several decades have not had a single firm with at least one woman in their boardrooms. Figure 1 shows the fraction of firms in a sector with no women in the boardroom. This is a new measure in the literature. The x-axis shows the proportion of such firms in a sector, ranging from 0 (all firms in that sector have at least one woman on their boards) to 1 (women are absent from all corporate boardrooms in the entire sector). The y-axis shows the relative number of sectors in the sample for each of the observed fractions.

Figure 1. Fraction of firms with no women in the boardroom

Note: The figure details the distribution (countries and years are combined). Source: Drazkowski, Tyrowicz, and Zalas (2024).

This finding points to clusters of companies with potentially significant obstacles to gender board diversity. Since lack of representation could be considered a major barrier to diversity, policies aimed at promoting even minimal representation of women among board members could have a significant impact on overall diversity.

The Substantial Differences Between Industries and Countries

The average firm-level share of women on corporate boards is only around 16 percent in the IT sector, while it is 35 percent in the education, health, and care (EHC) sector. Figure 2 shows two distributions of the average firm-level shares of women among board members: one for the IT sector and the other for the EHC sector. The distribution for the EHC sector is clearly to the right relative to the distribution for the IT sector, which means that across multiple countries and years, women tend to constitute a much smaller proportion of board members in the IT sector than in the EHC sector. Furthermore, the proportion of observations with no female board members (the spike at value 0) is much higher in the IT sector than in the EHC sector.

Figure 2. Distribution across sectors

Note: Distribution of the firm-level share of women on boards across countries and years in two broad sectors. The following categories make up the two sectors. IT: 61, 62, 63; Education, health & care: 85, 86, 87. Source: GBDD.

Decomposing the data by country also highlights significant differences. For example, firms with no female board members tend to be more prevalent in Poland than in Finland. This is illustrated in Figure 3, where the distribution for Poland is shifted to the right relative to the distribution for Finland.

Figure 3. Distribution across countries

Note: Distributions of the share of firms in an industry with no female board members (Finland vs Poland). Source: GBDD.

The above data suggest that there may exist a set of sector- and country-specific barriers to gender board diversity. Therefore, policies tailored to addressing those specific barriers could be more appropriate than blanket economy-wide policies.

Diversity Has Mildly Increased

The GBDD can also be used to assess how gender board diversity has evolved over time. Generally, there was an increase in diversity in the 1990s, stagnation in the 2000s, and another increase in the 2010s. However, in the case of supervisory boards, the recent increase in the proportion of female board members was not accompanied by an increase in the number of women on supervisory boards. While the full explanation of this observation would require further research, one possible interpretation is that supervisory boards might have become smaller over time, with male board members accounting for most of the decline, thus mechanically increasing the share of female board members.

Conclusion

Despite the increase in gender diversity among company board members over the last three decades, women still comprise a smaller share of board members and, in many cases, are completely absent from boards. While examining the reasons for this is beyond the scope of this policy brief, the high prevalence of firms with no women on their boards suggests the possibility that significant barriers to entry for women still exist, with this total lack of representation in many companies potentially being one. Policymakers interested in fostering an inclusive and fair society could focus their attention on understanding and removing barriers to board participation faced by women. Furthermore, identifying and tackling country- and sector-specific barriers to board diversity could be particularly impactful. The GBDD can be used by researchers and non-researchers alike to gain further insights into this topic, thus contributing to evidence-based policymaking.

Acknowledgement

The research outlined in this policy brief was funded by Norwegian Financial Mechanism 2014–2021 (grant # 2019/34/H/HS4/00481).

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Behavior and Information: Does Media Promote Consumerism?

Posted on December 2, 2024 | Policy Brief

Two women holding shopping bags with "Black Friday" labels on an escalator, symbolizing media consumerism during shopping events.

Consumer behavior is well recognized as a vital component in dealing with climate change. In this regard, it is important to understand both which mechanisms promote pro-environmental behavior, and which instruments stimulate unsustainable consumer activities. This policy brief summarizes the results from a study on how media use can promote consumerism. Based on a 2022 online-survey of Belarus’s urban population, the study empirically assesses how exposure to information promoting overconsumption can impact unsustainable actions. The findings show that consumerism media use has a positive effect on unsustainable consumption behavior. To mitigate the impact and promote sustainable behavior, media could be obligated to provide information about the negative footprint of unsustainable consumption.

Introduction

Consumer behavior holds large potential when it comes to climate change and other environmental problems. According to Moran et al.  (2020), changes in consumer behavior could lead to a European Union (EU) carbon footprint reduction by approximately 25 percent.

There are two conflicting streams of literature on the effects of media use on consumer behavior. The first strand states that media use exerts a positive effect on pro-environmental attitudes and behavior (Holbert et al. 2003; Wang & Hao, 2018) while the second declares that media use (in particular, the Internet) promotes consumerism (Simeone & Scarpato, 2020).

The objective of the study underlying this policy brief is to contribute to this debate by exploring whether media use positively affects unsustainable consumption behavior, drawing on data from a nationally representative online survey in Belarus.

Behavior and its Determinants

The study’s conceptual approach rests on the Attitude-Behavior-Context (ABC) theory (Guagnano et al., 1995; Gardner and Stern, 1996; Stern, 2000) which states that behavior is a product of attitudinal variables (norms, beliefs, values), contextual factors (e.g., interpersonal influences, media, community expectations, monetary incentives and costs) and personal capabilities (e.g., knowledge and skills).

With the ABC theory in mind, and also driven by prior empirical studies (e.g., Huang, 2016), the study explores how unsustainable consumption behavior can be affected by materialistic values, environmental self-efficacy (in the study perceived as a combination of values and personal knowledge), and consumerism media use.

We define unsustainable consumption behavior as conspicuous buying, which describes acquiring expensive, and luxury goods or services in order to impress others and gather prestige through objects (Rook, 1987; Pellegrino & Shannon, 2021).

Media use in general means exposure or attention to both traditional media, such as newspapers, TV, and radio, and the Internet (Huang, 2016). Consumerism media use in our study refers to the exposure on these media channels to information promoting a luxurious lifestyle and the idea that buying more leads to happiness.

According to Hurst et al. (2013), materialism can be more easily targeted and changed than personality traits, which are more stable. Besides, theoretical and empirical evidence suggests that materialistic values are negatively associated with pro-environmental behavior. To measure materialism as a value we employ the short version of the Materialistic Values Scale (Richins, 2004), which assesses beliefs about the importance of material possession.

Environmental self-efficacy, also known as perceived consumer effectiveness, refers to an individual’s belief in their ability to make a meaningful impact through their efforts (Ellen et al., 1991). We hypothesize that environmental self-efficacy should be negatively associated with unsustainable consumption behavior.

To operationalize the above constructs (see Table 1), the study uses data from a nationally representative online survey among the urban Belarusian population aged 18-75, conducted in April 2022 by MIA Research on behalf of BEROC. The sample size includes 1029 participants.

Table 1. Descriptive statistics of each construct’s indicators

Note: a Four-point Likert scale (1=never, 4=always). b Four-point Likert scale (1=never; 4=very often; 0=I do not use this type of media). c Five-point Likert scale (1=strongly disagree, 5=strongly agree).

As seen in Table 1, consumers in Belarus are mostly exposed to the information promoting luxurious lifestyle and buying more goods to be happy on the Internet, relative to other media channels. Another interesting outcome is that Belarusian consumers are more likely to perceive material possessions as a source of happiness compared to the other domains of the classical material value triad; success, centrality, and happiness (Richins and Dawson (1992) and Richins (2004), where success refers to using possessions to evaluate the success of oneself and others centrality refers to the central role of possessions in a person’s life, and happiness reflects the belief that happiness and life satisfaction are achieved through possessions and their acquisition.

Assessment of the Unsustainable Consumption Behavior Model

The study estimates the structural equation model for unsustainable consumption behavior. The main hypothesis of the study is that consumerism media use might exert a positive influence on unsustainable consumption behavior. Materialistic values as well as environmental self-efficacy can also affect unsustainable consumption behavior. As both our values and beliefs may to some extent determine the context in which we live, we assume that materialistic values and environmental self-efficacy might impact consumerism media use. Additionally, we assume that materialistic values can have a negative influence on environmental self-efficacy. Figure 1 details the path diagram with maximum-likelihood estimates of fully standardized coefficients.

Figure 1. Path diagram of the structural equation model explaining unsustainable consumption behavior

Note: standardized coefficients; solid line denotes significant path; dashed line denotes insignificant relationships. *** p<0.001, ** p<0.01; *p<0.05

The results show that consumerism media use has a positive, and significant effect on unsustainable consumption behavior (0.124; standard deviation change). The possible channel leading to these findings is the emotions at play.  Advertisements promoting a luxurious lifestyle and buying more things to be happy can elicit quite strong emotions in consumers related to happiness and success in life. Around two decades ago a large body of literature in consumer research emerged on the role of emotions in decision-making (for an overview see Laros & Steenkamp, 2005). Recent experimental studies about adoption of sustainable innovations (e.g. Contzen et al., 2021 (a); Contzen et al., 2021 (b)) also prove the role emotions play in consumer behavior.

Materialistic values are another significant contributor to unsustainable actions (0.249 standard deviation change). As expected, materialistic values also exert a positive and statistically significant effect on consumerism media use (0.165 standard deviation change). However, contrary to our expectations, environmental self-efficacy does not exert a direct negative impact on unsustainable behavior (dashed line in Figure 1).

Conclusion

The results from the structural equation model show that consumerism media use exerts a positive moderate effect on unsustainable consumption behavior of the urban population in Belarus. This effect is statistically significant.

To reduce the negative environmental impact of unsustainable behavior, policymakers should, thus, target regulation that downplays the emotional appeal of ads promoting excessive consumption and stresses the adverse environmental effects of consumerism. This could include, for example, policies requiring ads to contain information about the environmental footprint of the product, from production to its full lifecycle.

References

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Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.