Financial markets expose individuals to the broader economy. Does participation in financial markets also lead individuals to re-evaluate the costs of conflict, their views on politics and even their votes? Prior to the 2015 Israeli elections, we randomly assigned financial assets from Israeli and Palestinian companies to likely voters and gave them incentives to actively trade for up to seven weeks. Opportunities to trade in financial markets systematically shifted vote choices and increased support for peace initiatives. These effects persist a year after the experiment, and appear consistent with financial market exposure leading to increased awareness of the economic risks of conflict.
Along with being a Senior Fellow at FSI, Saumitra Jha is an Associate Professor of Political Economy at the Stanford Graduate School of Business, by courtesy, of Economics and of Political Science, and a Senior Fellow at SIEPR. Saum holds a BA from Williams College, master’s degrees in economics and mathematics from the University of Cambridge, and a PhD in economics from Stanford University. Prior to returning to Stanford, he was an Academy Scholar at Harvard University. Saum has been a Fellow of the Niehaus Center for Globalization and Governance and the Center for the Study of Democratic Politics at Princeton University and received the Michael Wallerstein Award for best published article in Political Economy from the American Political Science Association in 2014 for his research on ethnic tolerance. Saumitra has consulted on economic and political risk issues for the United Nations/ WTO, the World Bank and other organizations. Having grown up in England, Scotland and the Indian Himalaya, Saum's research interests now take him to Israel, Japan, Mexico and elsewhere.