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Trust, assocational life, and economic performance

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  • Knack, Stephen

Abstract

Assuming that J. S. Mill and others are correct in their belief that trust matters for the economic performance of nations, the determinants of trust become important. Section 2 discusses the sources of trust and briefly summarizes empirical evidence. Section 3 builds on Fukuyama’s concept of the “radius of trust” to identify the type of trust which should be advantageous to national economic performance. Section 4 addresses measurement issues. Evidence on trust and economic performance relies heavily on the use of a single survey indicator of trust: in light of the potential for translation problems and other sources of measurement error, can this indicator be trusted? Section 5 presents empirical evidence on trust and economic performance, for a 25-nation OECD sample and for a larger 40-country sample. Section 6 presents evidence on the relationship between associational life and economic performance, testing the conflicting theoretical perspectives of Putnam (1993) and Olson (1982). Section 7 briefly concludes.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 27247.

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Date of creation: 2001
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Handle: RePEc:pra:mprapa:27247

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Related research

Keywords: trust; social capital; growth;

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References

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  1. J. Bradford De Long & Andrei Shleifer, 1993. "Princes and Merchants: European City Growth before the Industrial Revolution," NBER Working Papers 4274, National Bureau of Economic Research, Inc.
  2. Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
  3. John F. Helliwell, 1996. "Economic Growth and Social Capital in Asia," NBER Working Papers 5470, National Bureau of Economic Research, Inc.
  4. Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
  5. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
  6. Gordon Bergsten, 1985. "On the role of social norms in a market economy," Public Choice, Springer, vol. 45(2), pages 113-137, January.
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Cited by:
  1. John F. Helliwell, 2002. "How's Life? Combining Individual and National Variables to Explain Subjective Well-Being," NBER Working Papers 9065, National Bureau of Economic Research, Inc.
  2. Christian Bjørnskov, 2007. "Determinants of generalized trust: A cross-country comparison," Public Choice, Springer, vol. 130(1), pages 1-21, January.

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