The Political Consequences of Self-Insurance: Evidence from Central-Eastern Europe, the Caucasus and Central Asia

Does self-insurance, such as access to savings or assets, affect support for government? While existing research recognizes that households’ ability to privately manage income risk and economic uncertainty influences voter redistributive preferences, we know relatively little about how self-insurance affects evaluations of government in the first place. To gain traction on this question, we combine cross-sectional and panel public opinion surveys from 28 countries in Central Eastern Europe, the Caucasus and Central Asia with macro-data on economic performance. Exploiting variation in citizen responses to the Great Recession, we show that by enabling citizens to smooth consumption, self-insurance affects how they form economic perceptions. Moreover, we find that self-insurance bolsters support for incumbents. Results allow us to better understand why economic downturns may not dampen support for government, even when economic hardship is rife and access to public safety nets is limited.