The Italian North-South Divide in Perceived Dishonesty: A Matter of Trust?

We present novel data on the perception of dishonesty in the public sector in Italy, from a survey we carried out on a sample of about 1,000 attendees at a mass-gathering music festival in Southern Italy, whose audience includes a relevant fraction of subjects residing in Northern Italy. The survey includes questions on perceived dishonesty measured on an institutional and a social dimension. We measure whether regional differences in the perception of dishonesty persist even when controlling for generalized trust, the quality of institutions at the regional level, as well as socio-demographic characteristics. We find that respondents from the North of Italy or living abroad perceive lower level of dishonesty in the public sector compared to respondents from the South of Italy. Once objective measures of corruption and governance at the regional level are accounted for, the geographical gap disappears, while generalized trust still matters. This evidence suggests that individual and geographic differences in generalized trust must be taken into account, as they can affect both economic performance and the support for policy interventions aimed at improving norms enforcement and institutional quality by reducing dishonesty in the public sector.