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A note on the theory and measurement of trust in explaining differences in economic growth

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Author Info
Sjoerd Beugelsdijk

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Abstract

This paper takes issue with the trend to attribute differences in economic growth rates to differences in interpersonal trust. I discuss the World Values Survey (WVS) measure that is used to operationalise trust at the macro level. I hypothesise that there is a mismatch between the theoretical argument and the empirical operationalisation of trust. Instead of measuring trust, the WVS measure may instead proxy the well-functioning of institutions. I provide circumstantial evidence for this thesis by a principal components analysis of trust and institutions and a robustness test of Zak and Knack's (2001. Trust and growth, Economic Journal, vol. 111, 295--321) seminal study on trust and economic growth. Copyright 2006, Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/cje/bei064
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Publisher Info
Article provided by Oxford University Press in its journal Cambridge Journal of Economics.

Volume (Year): 30 (2006)
Issue (Month): 3 (May)
Pages: 371-387
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Handle: RePEc:oup:cambje:v:30:y:2006:i:3:p:371-387

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  1. Thomas Farole & Andrés Rodríguez-Pose & Michael Storper, 2007. "Social capital, rules, and institutions: A cross-country investigation," Working Papers 2007-12, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales. [Downloadable!]
  2. Akcomak, Semih, 2009. "Bridges in social capital: A review of the definitions and the social capital of social capital researchers," UNU-MERIT Working Paper Series 002, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
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