The Impact of Trust on Reforms
AbstractIn a constantly changing economic environment a country's ability to undertake institutional reforms is crucial to maintain economic growth and to promote the welfare of its citizens. A wide range of determinants for institutional reforms have been identified. However, the impact of trust on reforms has so far never been addressed. We provide theoretical arguments why trust should influence institutional changes and test the relationship empirically. We find a significant positive relation between trust and reforms with regard to government size, the legal system, and deregulation of private businesses and the labor market. The results in other policy fields are ambiguous. --
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Bibliographic InfoPaper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 08-053.
Date of creation: 2008
Date of revision:
Trust; Economic Freedom; Policy Reforms;
Other versions of this item:
- Friedrich Heinemann & Benjamin Tanz, 2008. "The impact of trust on reforms," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 11(3), pages 173-185.
- Friedrich Heinemann & Benjamin Tanz, 2008. "The impact of trust on reforms," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 11(3), pages 173-185.
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-09-29 (All new papers)
- NEP-CBE-2008-09-29 (Cognitive & Behavioural Economics)
- NEP-MAC-2008-09-29 (Macroeconomics)
- NEP-POL-2008-09-29 (Positive Political Economics)
- NEP-REG-2008-09-29 (Regulation)
- NEP-SOC-2008-09-29 (Social Norms & Social Capital)
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