The Life in Transition Survey (LiTS), conducted jointly by the European Bank for Reconstruction and Development (EBRD) and the World Bank, was launched on 29 June.
The study, which was made possible also by a CEI technical assistance contribution, provides an unparalleled insight into the attitudes and values of nearly 39,000 households in the countries where the EBRD operates and in five western European nations.
It also sheds precious light on how the transition to an open market-oriented economy and the economic downturn have affected the citizens of Central and Eastern Europe and of Central Asia.
“It [the Life in Transition Survey] shows that, despite their dissatisfactions, people in transition countries have largely embraced the market economy and democracy and are optimistic about the future,” EBRD Chief Economist Erik Berglof said at the launch event, summing up what appears to be one of the most striking findings of the survey. This commitment to democracy and the market economy appears further impressive, given the scale of the crisis in the CEI and EBRD countries of operations. The study, conducted in late 2010, covered 29 countries in the region where the EBRD operates plus five western European comparator states, including Italy. The two CEI Trust Fund supported TC projects which helped to fund the survey, were used to interview households in Albania, and Bosnia and Herzegovina. The survey asked respondents how much the economic downturn had affected them and how satisfied they were with their lives. Other questions aimed to discover views toward the market economy, political democracy, and the appropriate role of the state in the economy; perceived opportunities and constraints to engage in entrepreneurial activities; and opinions regarding the quality of public institutions in their delivery of goods that are essential to the sustainability of the market, such as rule of law and political accountability. The LiTS followed up on a similar effort conducted in 2006. That initial study found that transition had been hard for most people of the post-communist region with perceived declines in living standards, equality, and social trust. Following a decade of GDP growth, however, the survey also revealed that people were optimistic about the future: the majority believed that their sacrifices during the transition period had been worthwhile, enabling their children to enjoy a better life than they themselves had experienced. The current LiTS found that 42 per cent of households in the 29 transition countries had been affected “a great deal” or “a fair amount” by the global economic crisis, whereas in Germany this was true of only 15 per cent of respondents and in the UK the figure was just over 30 per cent. Furthermore, 70 per cent of households in the transition countries who reported being affected by the crisis had to cut back on staple food purchases and health-care spending – twice the proportion of crisis-affected households in the western European countries. Despite this hardship, levels of life satisfaction remained almost unchanged compared with the 2006 survey. When asked about the statement “All things considered, I am satisfied with my life now”, 42.7 per cent of respondents in the transition region said they agreed or strongly agreed in 2010, compared with 44.2 per cent four years earlier. Additionally, 49 per cent of transition households remained optimistic about the future in 2010, down from 55 per cent in 2006. In western Europe, meanwhile, the proportion of people who agreed that “children who are born now will have a better life than my generation” was much lower. As with many findings of the study, however, views of life satisfaction showed significant regional variations. Compared with the 2006 survey, life satisfaction fell in 16 countries (not surprisingly, including the countries hardest hit by the crisis) but rose in 13. Specifically regarding the 16 CEI countries of operations, LiTS showed an even split: life satisfaction since 2006 fell in eight of them, and rose in the other eight. Nonetheless, 10 of the CEI countries remained, as in 2006, below the transition region average. Life satisfaction was highest in Slovenia, Poland and the Czech Republic, among the group of 16 countries. Support for democracy and the market economy declined but did not collapse in the 29 transition countries, while appetite for a return to authoritarianism and a planned economy remained very weak. Almost 45 per cent of respondents said they would choose democracy over any other political system, whereas fewer than 40 per cent said they would opt for a market economy under any circumstances. These figures are higher than the percentages of households in some of the western European comparator countries (France, U.K.). This wealth of knowledge makes the LiTS a unique perspective on the CEI and EBRD region and will shape policies and priorities, ensuring the sustainable impact of the supporting CEI Trust Fund TC projects. To download a copy of Life in Transition, please visit http://www.ebrd.com/pages/news/features/lits.shtml.