The Perception of Economic Growth and the Romanian "Mioritic Syndrome"

We evaluate changes in the perception of Romanians about their own economic prosperity and the overall economy during the transition to free markets. We use ten questions from the Life in Transition Survey measuring people's attitudes and values related to the economic situation, from three successive waves (2006, 2010, and 2016). We first conduct an exploratory factor analysis to identify potential latent constructs within the data. In the second step, we use multi-group confirmatory factor analysis to test whether our measurement is invariant across waves. The results show a relatively stable factorial structure and a relatively complex dynamic. Consistent with previous research, we find a significant disconnect between how individuals perceive the overall economy in contrast to their own well-being, but with a Romanian twist. Most people consider their personal situation is improving; yet, at the same time, they perceive the economy is progressively deteriorating. We contend this perception disconnect is due to a combination of biases, including, but not limited to, availability bias and social contagion. We strongly suspect the culturally embedded lack of social trust, so pervasive in Romania, is also part of the explanation. To our knowledge, this is the first research that systematically investigates the perception of economic development during the transition process in Romania across multiple periods of time. Our findings underscore the challenge this perception disconnects poses to understanding and anticipating public responses to long-term growth strategies and policies. We dub this unique cultural fatalism "the Mioritic Syndrome."