
Contents
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5.1 Overview 5.1 Overview
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5.2 Political attitudes in globalized economies 5.2 Political attitudes in globalized economies
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5.3 Bailout exposure and attitudes towards democracy 5.3 Bailout exposure and attitudes towards democracy
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5.4 Unpacking political learning: Dimensions of democracy 5.4 Unpacking political learning: Dimensions of democracy
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Bailouts and dimensions of democracy Bailouts and dimensions of democracy
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Updating dimensions of democracy Updating dimensions of democracy
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5.5 Discussion 5.5 Discussion
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Appendix Appendix
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A model of political updating A model of political updating
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5 Financial Bailouts and Political Updating
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Published:April 2025
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Abstract
Chapter 5 shows that exposure to bailouts triggers a political updating process that affects perceptions of how democracy works. The chapter explains how such updating takes place and discusses how it affects citizens’ perceptions of democracy. The discussion starts by framing exposure to bailouts as an information shock to citizens’ prior knowledge on democratic performance. This information shock, however, differs depending on how intensively citizens are exposed to the conditions attached to the financial aid: citizens with firsthand experience of bailouts will update their beliefs about the functioning of democracy differently from unexposed citizens. Using Eurobarometer data for the period 2001–2015, the chapter develops a series of difference-in-difference models to test how exposure to bailouts affected individuals’ attitudes towards satisfaction with democracy and trust in different political institutions. This analysis is supplemented by a more detailed examination of different dimensions of democracy using data from the sixth round of the European Social Survey.
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