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Social Capital, Corruption and Economic Growth: Eastern and Western Europe

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Author Info
Svendsen, Gert Tinggaard () (Department of Economics, Aarhus School of Business)

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Abstract

We hypothesize, that power centralisation in a political system leads to more corruption due to the

monopoly power status of bureaucrats. Corruption again would then lead to a lower level of social capital,

here measured as trust, and slow down economic growth even further. Indeed, when comparing the tables

and weighted averages for corruption and trust, highly corrupt countries such as those in Eastern Europe,

also tend have the lowest level of trust. In general, low levels of trust (measured as general trust and civic

participation) are also related to smaller Gross Domestic Product per capita levels. A similar pattern is

observed within Western Europe. In the European Union, ‘Northern EU’ member states generally hold less

corruption, more trust and higher Gross Domestic Product per capita compared to ‘Southern EU’ member

states. In perspective, the fate of Eastern Europe could then be a lesson for how to decentralise power and

accumulate trust in the future thus establishing better economic policies and the general business climate for

entrepreneurship.

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Publisher Info
Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 03-21.

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Length: 31 pages
Date of creation: 28 Jan 2003
Date of revision:
Handle: RePEc:hhs:aareco:2003_021

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Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
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Related research
Keywords: Social capital; trust; public policy; corruption; economic growth; Eastern Europe; Western Europe;

Other versions of this item:

Find related papers by JEL classification:
A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
D60 - Microeconomics - - Welfare Economics - - - General
D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Paldam, Martin & Svendsen, Gert Tinggaard, 2000. "Missing social capital and the transition in Eastern Europe," Working Papers 00-5, University of Aarhus, Aarhus School of Business, Department of Economics. [Downloadable!]
    Other versions:
  2. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August. [Downloadable!] (restricted)
  3. North, Douglass C, 1991. "Institutions," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 97-112, Winter. [Downloadable!] (restricted)
  4. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March. [Downloadable!] (restricted)
    Other versions:
  5. Paldam, Martin & Svendsen, Gert Tinggaard, 2000. "An essay on social capital: looking for the fire behind the smoke," European Journal of Political Economy, Elsevier, vol. 16(2), pages 339-366, June. [Downloadable!] (restricted)
  6. Hans Aage, 1997. "Institutions and Performance in Transition Economies," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 24, pages 125-144. [Downloadable!]
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