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A note on the theory and measurement of trust in explaining differences in economic growth

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  • Sjoerd Beugelsdijk

Abstract

This paper takes issue with the trend to attribute differences in economic growth rates to differences in interpersonal trust. I discuss the World Values Survey (WVS) measure that is used to operationalise trust at the macro level. I hypothesise that there is a mismatch between the theoretical argument and the empirical operationalisation of trust. Instead of measuring trust, the WVS measure may instead proxy the well-functioning of institutions. I provide circumstantial evidence for this thesis by a principal components analysis of trust and institutions and a robustness test of Zak and Knack's (2001. Trust and growth, Economic Journal, vol. 111, 295--321) seminal study on trust and economic growth. Copyright 2006, Oxford University Press.

Suggested Citation

  • Sjoerd Beugelsdijk, 2006. "A note on the theory and measurement of trust in explaining differences in economic growth," Cambridge Journal of Economics, Oxford University Press, vol. 30(3), pages 371-387, May.
  • Handle: RePEc:oup:cambje:v:30:y:2006:i:3:p:371-387
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    File URL: http://hdl.handle.net/10.1093/cje/bei064
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    Cited by:

    1. Peter Kotzian, 2014. "Good Governance and Norms of Citizenship: An Investigation into the System- and Individual-Level Determinants of Attachment to Civic Norms," American Journal of Economics and Sociology, Wiley Blackwell, vol. 73(1), pages 58-83, January.
    2. Christian Bjørnskov & Pierre-Guillaume Méon, 2015. "The productivity of trust," Post-Print CEB, ULB -- Universite Libre de Bruxelles, June.
    3. Horváth, Roman, 2013. "Does trust promote growth?," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 777-788.
    4. Thöni, Christian & Tyran, Jean-Robert & Wengström, Erik, 2012. "Microfoundations of social capital," Journal of Public Economics, Elsevier, vol. 96(7-8), pages 635-643.
    5. Blanca Delgado-Márquez & Nuria Hurtado-Torres & J. Aragón-Correa, 2013. "On the Measurement of Interpersonal Trust Transfer: Proposal of Indexes," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 113(1), pages 433-449, August.
    6. Cyrus Teresa L., 2012. "Cultural Distance and Bilateral Trade," Global Economy Journal, De Gruyter, vol. 12(4), pages 1-25, December.
    7. repec:spr:anresc:v:60:y:2018:i:3:d:10.1007_s00168-015-0729-2 is not listed on IDEAS
    8. repec:oup:cambje:v:41:y:2017:i:2:p:515-544. is not listed on IDEAS
    9. repec:eee:rujoec:v:1:y:2015:i:3:p:294-312 is not listed on IDEAS
    10. Thomas Farole & Andres Rodriguez-Pose & Michael Storper, 2007. "Social capital, rules, and institutions: A cross-country investigation," Sciences Po publications 2007-12, Sciences Po.
    11. Akcomak, Semih, 2009. "Bridges in social capital: A review of the definitions and the social capital of social capital researchers," MERIT Working Papers 002, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    12. Wang, Lanlan & Gordon, Peter, 2011. "Trust and institutions: A multilevel analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 583-593.
    13. repec:ksa:szemle:1740 is not listed on IDEAS
    14. Jakson Alves Aquino, 2017. "The Meaning of Trust for Brazilians with Higher Education," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 130(1), pages 325-349, January.
    15. M. Niaz Asadullah, 2017. "Who Trusts Others? Community and Individual Determinants of Social Capital in a Low-Income Country," Cambridge Journal of Economics, Oxford University Press, vol. 41(2), pages 515-544.
    16. Robert Neumann, 2016. "Understanding trustworthiness: using response latencies from CATI surveys to learn about the “crucial” variable in trust research," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(1), pages 43-64, January.
    17. Daniel Hain & Sofia Johan & Daojuan Wang, 2016. "Determinants of Cross-Border Venture Capital Investments in Emerging and Developed Economies: The Effects of Relational and Institutional Trust," Journal of Business Ethics, Springer, vol. 138(4), pages 743-764, November.
    18. Andreas Bergh, 2014. "Sweden and the Revival of the Capitalist Welfare State," Books, Edward Elgar Publishing, number 15717, December.
    19. Markus Leibrecht & Hans Pitlik, 2018. "Is Trust in Companies Rooted in Social Trust, or Regulatory Quality, or Both?," WIFO Working Papers 564, WIFO.
    20. Robert Neumann, 2016. "Understanding trustworthiness: using response latencies from CATI surveys to learn about the “crucial” variable in trust research," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(1), pages 43-64, January.
    21. Christian Bjørnskov, 2010. "How does social trust lead to better governance? An attempt to separate electoral and bureaucratic mechanisms," Public Choice, Springer, vol. 144(1), pages 323-346, July.

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