Trust and Economic Growth
AbstractEconomists increasingly pay attention to social capital as an important determinant of macroeconomic growth performance. At the same time, there is discussion regarding the robustness of the results of empirical growth studies. In a seminal paper, Knack and Keefer (1997) assess the effect of trust on growth. This paper analyses the robustness of their results along several dimensions, acknowledging the complexity of therobustness concept. Our findings show that the robustness of the relationship between trust and growth in terms of both the size and the significance of the estimated effect, is highly dependent on the set of conditioning variables. An answer to the question whether there is an economic payoff of trust - and if so, how large this payoff actually is - is therefore difficult to provide on the basis of cross sectional empirical growth studies.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 02-049/3.
Date of creation: 28 May 2002
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Robustness; Trust; Economic Growth.;
Find related papers by JEL classification:
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-06-13 (All new papers)
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