Institutional inversion occurs when collective attitudes lead to institutions that in turn lead to behaviors that are the opposite of those attitudes. We illustrate this process with the case of debt, in which antidebtor attitudes in Protestant (vs. Catholic) cultures led to institutions that fostered higher household indebtedness. We describe three factors hypothesized to make institutional inversion more likely: erroneous lay theories (particularly those that take a “demand-side” vs. a “supply-side” view of culture), moralization, and narrow construals (in terms of time, goals, and populations considered).
CohenD.LawlessR.SeoM. (2022). Attitudes toward debt and bankruptcy [Unpublished manuscript]. University of Illinois.
3.
CohenD.ShinF.LawlessR. M. (2021). Attitudes, behavior, and institutional inversion: The case of debt. Journal of Personality and Social Psychology, 120(5), 1117–1145. https://doi.org/10.1037/pspa0000265
4.
DiamondR.McQuadeT.QianF. (2019). The effects of rent control expansion on tenants, landlords, and inequality: Evidence from San Francisco. American Economic Review, 109(9), 3365–3394. https://doi.org/10.1257/aer.20181289
KimJ. S. (2005). Resolving South Korea’s credit card hangover: An analysis of the individual debtor rehabilitation act. North Carolina Journal of International Law and Commercial Regulation, 31(2), 431–462.
11.
La PortaR.Lopez-de-SilanesF.ShleiferA.VishnyR. (1998). Law and finance. Journal of Political Economy, 106, 1113–1155. https://doi.org/10.1086/250042
MertonR. K. (1936). The unanticipated consequences of purposive social action. American Sociological Review, 1(6), 894–904. https://doi.org/10.2307/2084615
14.
NoonanJ. T. (1957). The scholastic analysis of usury. Harvard University Press.
15.
PaganoM. (2001). Introduction. In PaganoM. (Ed.), Defusing default: Incentives and institutions (pp. 1–17). Inter-American Development Bank.
