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Does social distrust always lead to a stronger support for government intervention?

  • Hans Pitlik
  • Ludek Kouba

We address empirically trust as a determinant of support for government intervention. The central notion provided in the present paper is that the influence of generalized social trust on intervention attitudes is conditional on the perceived reliability, honesty, and incorruptibility of state actors and of major companies. Starting point is an idea by Aghion, Algan, Cahuc, and Shleifer (2010) that individuals who generally distrust others have a stronger taste for a regulation of economic activities, while people with high interpersonal trust are in favor of less strict regulations and state control. This line of argumentation neglects that (lack of) trust spills over to distrust in both governmental as well as in private institutions. People who tend to (dis-)trust other unknown people also tend to (dis-)trust state actors and private sector actors. Estimating the determinants of interventionist preferences with data from the World Values Survey/European Values Study for approximately 100,000 -115,000 individuals in 37 OECD- and EU-countries, we show that the impact of social trust on government intervention attitudes is conditional on individual confidence in state actors and in companies.

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Paper provided by WWWforEurope in its series WWWforEurope Policy Paper series with number 8.

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Length: 34
Date of creation: Jan 2014
Date of revision:
Publication status: published
Handle: RePEc:feu:wfeppr:y:2014:m:1:d:0:i:8
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Order Information: Postal: WWWforEurope Project Office Austrian Institute of Economic Research Arsenal Objekt 20 A-1030 Vienna
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  1. Algan, Yann & Cahuc, Pierre, 2014. "Trust, Growth, and Well-Being: New Evidence and Policy Implications," Handbook of Economic Growth, in: Handbook of Economic Growth, edition 1, volume 2, chapter 2, pages 49-120 Elsevier.
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  14. Andrei Shleifer, 2010. "Efficient Regulation," NBER Working Papers 15651, National Bureau of Economic Research, Inc.
    • Andrei Shleifer, 2010. "Efficient Regulation," NBER Chapters, in: Regulation vs. Litigation: Perspectives from Economics and Law, pages 27-43 National Bureau of Economic Research, Inc.
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  23. Hans Pitlik & Gerhard Schwarz & Barbara Bechter & Bernd Brandl, 2010. "Near Is My Shirt but Nearer Is My Skin. Ideology or Self-Interest as Determinants of Public Opinion on Fiscal Policy Issues," WIFO Working Papers 373, WIFO.
  24. John F. Helliwell, 2006. "Well-Being, Social Capital and Public Policy: What's New?," Economic Journal, Royal Economic Society, vol. 116(510), pages C34-C45, 03.
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  28. Felix Roth, 2009. "Does Too Much Trust Hamper Economic Growth?," Kyklos, Wiley Blackwell, vol. 62(1), pages 103-128, 02.
  29. Sjoerd Beugelsdijk & Henri L.F. de Groot & Anton B.T.M. van Schaik, 2002. "Trust and Economic Growth," Tinbergen Institute Discussion Papers 02-049/3, Tinbergen Institute.
  30. Dimitrova-Grajzl, Valentina & Grajzl, Peter & Guse, A. Joseph, 2012. "Trust, perceptions of corruption, and demand for regulation: Evidence from post-socialist countries," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(3), pages 292-303.
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