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Does Trust Influence Social Expenditures? Evidence from Local Governments

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  • Silvia Camussi
  • Anna Laura Mancini
  • Pietro Tommasino

Abstract

We document that trust has a positive impact on the generosity of welfare spending. Our analysis relies on a unique dataset including detailed budgetary data of more than 2,000 Italian municipalities. Compared with previous contributions based on cross†country data, our approach reduces the risk of omitted variable bias and measurement errors. Furthermore, drawing on Italy's rich political history, we are able to use an instrumental variables strategy that addresses the possible endogeneity of trust.

Suggested Citation

  • Silvia Camussi & Anna Laura Mancini & Pietro Tommasino, 2018. "Does Trust Influence Social Expenditures? Evidence from Local Governments," Kyklos, Wiley Blackwell, vol. 71(1), pages 59-85, February.
    • Handle: RePEc:bla:kyklos:v:71:y:2018:i:1:p:59-85
    DOI: 10.1111/kykl.12162
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    Cited by:

    1. Hauk, Esther & Oviedo, Mónica & Ramos, Xavier, 2022. "Perception of corruption and public support for redistribution in Latin America," European Journal of Political Economy, Elsevier, vol. 74(C).
    2. Pietro Battiston & Simona Gamba, 2020. "When the two ends meet: an experiment on cooperation and social capital," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(3), pages 911-940, October.
    3. Andreas Bergh & Christian Bjørnskov, 2020. "Does Big Government Hurt Growth Less In High‐Trust Countries?," Contemporary Economic Policy, Western Economic Association International, vol. 38(4), pages 643-658, October.
    4. Alberto Batinti & Luca Andriani & Andrea Filippetti, 2019. "Local Government Fiscal Policy, Social Capital and Electoral Payoff: Evidence across Italian Municipalities," Kyklos, Wiley Blackwell, vol. 72(4), pages 503-526, November.
    5. Sylvain Mignot & Annick Vignes, 2019. "Trust somebody but choose carefully : an empirical analysis of social relationships on an exchange market," Working Papers hal-02005026, HAL.
    6. Panagiota Makrychoriti & Fotios Pasiouras & Menelaos Tasiou, 2022. "Financial stress and economic growth: The moderating role of trust," Kyklos, Wiley Blackwell, vol. 75(1), pages 48-74, February.
    7. Keefer, Philip & Scartascini, Carlos & Vlaicu, Razvan, 2022. "Demand-side determinants of public spending allocations: Voter trust, risk and time preferences," Journal of Public Economics, Elsevier, vol. 206(C).
    8. Andrea Filippetti, 2018. "Does diversity undermine the provision of local public services in European regions?," Management Working Papers 15, Birkbeck Department of Management, revised Feb 2021.

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