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Historical Trust Levels Predict Current Welfare State Design

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Author Info

  • Bergh, Andreas

    ()
    (The Ratio Institute and Lund University)

  • Bjørnskov, Christian

    ()
    (Aarhus School of Business, Aarhus University)

Abstract

Using cross-sectional data for 76 countries, we apply instrumental variable techniques based on pronoun drop, temperature and monarchies to demonstrate that historical trust levels predict several indicators of current welfare state design, including universalism and high levels of regulatory freedom. We argue that high levels of trust and trustworthiness are necessary, but not sufficient, conditions for societies to develop successful universal welfare states that would otherwise be highly vulnerable to free riding and fraudulent behavior. Our results do not exclude positive feedback from welfare state universalism to individual trust, although we claim that the important causal link runs from historically trust levels to current welfare state design.

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Bibliographic Info

Paper provided by The Ratio Institute in its series Ratio Working Papers with number 144.

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Length: 28 pages
Date of creation: 29 Oct 2009
Date of revision:
Handle: RePEc:hhs:ratioi:0144

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Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
Phone: 08-441 59 00
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Related research

Keywords: Social trust; Welfare State;

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Cited by:
  1. Yamamura, Eiji, 2010. "Government size and trust," MPRA Paper 19727, University Library of Munich, Germany.
  2. Andreas Bergh & Magnus Henrekson, 2011. "Government Size And Growth: A Survey And Interpretation Of The Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 25(5), pages 872-897, December.
  3. Kodila-Tedika, Oasis & Agbor Agbor, Julius, 2012. "Does Trust Matter For Entrepreuneurship : Evidence From A Cross-Section Of Countries," MPRA Paper 42292, University Library of Munich, Germany.
  4. Kelkar, Vijay & Shah, Ajay, 2011. "Indian social democracy: The resource perspective," Working Papers 11/82, National Institute of Public Finance and Policy.

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