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A road to trust

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  • Labonne, Julien
  • Chase, Robert S.
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    Abstract

    We explore the relationship between transaction costs and generalized trust. Using panel data from 2100 households in 135 poor rural communities of the Philippines, we show that where costs of interactions are reduced there is an increase in generalized trust. These results have implications for the literature on the links between trust and growth. Indeed, rather than being an input to economic growth, trust might be a product of reduced costs of interactions which also favors growth. Specifically, we find that the individuals most likely to engage in exchange exhibit an increase in trust after road construction.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

    Volume (Year): 74 (2010)
    Issue (Month): 3 (June)
    Pages: 253-261

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    Handle: RePEc:eee:jeborg:v:74:y:2010:i:3:p:253-261

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    Web page: http://www.elsevier.com/locate/jebo

    Related research

    Keywords: Trust Social capital Growth The Philippines;

    References

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    Cited by:
    1. Antoci, Angelo & Sabatini, Fabio & Sodini, Mauro, 2011. "Economic Growth, Technical Progress, and Social Capital: the Inverted U Hypothesis," AICCON Working Papers 86-2011, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    2. Fischer, Justina A.V., 2012. "Globalization and Political Trust," MPRA Paper 36327, University Library of Munich, Germany.
    3. Wahl, Fabian, 2012. "Why it matters what people think: Beliefs, legal origins and the deep roots of trust," FZID Discussion Papers 52-2012, University of Hohenheim, Center for Research on Innovation and Services (FZID).
    4. Hassani Mahmooei, Behrooz & Parris, Brett, 2012. "Dynamics of effort allocation and evolution of trust: an agent-based model," MPRA Paper 44919, University Library of Munich, Germany.

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