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Trust, Growth, and Well-Being: New Evidence and Policy Implications

In: Handbook of Economic Growth

  • Algan, Yann
  • Cahuc, Pierre

This survey reviews the recent research on trust, institutions, and economic development. It discusses the various measures of trust and documents the substantial heterogeneity of trust across space and time. The conceptual mechanisms that explain the influence of trust on economic performance and the methods employed to identify the causal impact of trust on economic performance are reviewed. We document the mechanisms of interactions between trust and economic development in the realms of finance, innovation, the organization of firms, the labor market, and the product market. The last part reviews recent progress to identify how institutions and policies can affect trust.

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This chapter was published in:
  • Philippe Aghion & Steven Durlauf (ed.), 2014. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 2, number 2.
  • This item is provided by Elsevier in its series Handbook of Economic Growth with number 2-49.
    Handle: RePEc:eee:grochp:2-49
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