IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Regulation and Distrust

  • Philippe Aghion

    (Department of Economics, Harvard University)

  • Yann Algan


    (OFCE - Observatoire Français des Conjonctures économiques - Institut d'Études Politiques [IEP] - Paris - Fondation Nationale des Sciences Politiques [FNSP])

  • Pierre Cahuc

    (Department of Economics, Ecole Polytechnique - Polytechnique - X - CNRS)

  • Andrei Shleifer

    (Department of Economics, Harvard University)

In a cross-section of countries, government regulation is strongly negatively correlated with social capital. We document this correlation, and present a model explaining it. In the model, distrust creates public demand for regulation, while regulation in turn discourages social capital accumulation, leading to multiple equilibria. A key implication of the model is that individuals in low trust countries want more government intervention even though the government is corrupt. We test this and other implications of the model using country- and individual-level data on social capital and beliefs about government's role, as well as on changes in beliefs and in trust during the transition from socialism.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by HAL in its series Working Papers with number hal-00396268.

in new window

Date of creation: 17 Jun 2009
Date of revision:
Handle: RePEc:hal:wpaper:hal-00396268
Note: View the original document on HAL open archive server:
Contact details of provider: Web page:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Rafael La Porta & Florencio Lopez-De-Silanes & Andrei Shleifer, 2002. "Government Ownership of Banks," Journal of Finance, American Finance Association, vol. 57(1), pages 265-301, 02.
  2. Wacziarg, Romain & Alesina, Alberto & Devleeschauwer, Arnaud & Easterly, William & Kurlat, Sergio, 2002. "Fractionalization," Research Papers 1744, Stanford University, Graduate School of Business.
  3. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Markets Institutions," Post-Print hal-00395668, HAL.
  4. Persson, Torsten & Tabellini, Guido, 1999. "Political economics and macroeconomic policy," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 22, pages 1397-1482 Elsevier.
  5. Alberto Bisin & Thierry Verdier, 2000. ""Beyond the Melting Pot": Cultural Transmission, Marriage, and the Evolution of Ethnic and Religious Traits," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 955-988.
  6. Thomas S. Dee, 2003. "Are There Civic Returns to Education?," NBER Working Papers 9588, National Bureau of Economic Research, Inc.
  7. Simeon Djankov & Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2003. "The New Comparative Economics," Harvard Institute of Economic Research Working Papers 2002, Harvard - Institute of Economic Research.
  8. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-38, May.
  9. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, 1998. "The Quality of Goverment," NBER Working Papers 6727, National Bureau of Economic Research, Inc.
  10. Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2002. "People's Opium? Religion and Economic Attitudes," CEPR Discussion Papers 3588, C.E.P.R. Discussion Papers.
  11. Leonard Wantchekon & Nathan Nunn, 2009. "Trans-Atlantic Slave Trade and the Origins of Mistrust in Africa," 2009 Meeting Papers 34, Society for Economic Dynamics.
  12. Nicholas Bloom & Raffaella Sadun, 2012. "The Organization of Firms Across Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 127(4), pages 1663-1705.
  13. repec:oup:qjecon:v:112:y:1997:i:4:p:1203-50 is not listed on IDEAS
  14. Edward Glaeser & Giacomo Ponzetto & Andrei Shleifer, 2006. "Why Does Democracy Need Education?," NBER Working Papers 12128, National Bureau of Economic Research, Inc.
  15. Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2008. "Social Capital as Good Culture," CEPR Discussion Papers 6657, C.E.P.R. Discussion Papers.
  16. Yann Algan & Pierre Cahuc & Philippe Aghion, 2008. "Can Policy influence culture? Minimum Wage and the Quality of Labor relations," 2008 Meeting Papers 574, Society for Economic Dynamics.
  17. Alesina, Alberto & La Ferrara, Eliana, 2002. "Who trusts others?," Journal of Public Economics, Elsevier, vol. 85(2), pages 207-234, August.
  18. Guido Tabellini, 2007. "Culture and Institutions: Economic Development in the Regions of Europe," Levine's Working Paper Archive 321307000000000974, David K. Levine.
  19. Torsten Persson & Guido Tabellini, 1999. "Political Economics and Public Finance," NBER Working Papers 7097, National Bureau of Economic Research, Inc.
  20. repec:oup:qjecon:v:115:y:2000:i:3:p:811-846 is not listed on IDEAS
  21. Augustin Landier & David Thesmar & Mathias Thoenig, 2008. "Investigating capitalism aversion," Economic Policy, CEPR;CES;MSH, vol. 23, pages 465-497, 07.
  22. repec:oup:qjecon:v:112:y:1997:i:4:p:1289-1332 is not listed on IDEAS
  23. Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2000. "The Role of Social Capital In Financial Development," CEPR Discussion Papers 2383, C.E.P.R. Discussion Papers.
  24. repec:oup:qjecon:v:115:y:2000:i:3:p:955-988 is not listed on IDEAS
  25. Andrei Shleifer & Florencio Lopez-de-Silanes & Rafael La Porta, 2008. "The Economic Consequences of Legal Origins," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 285-332, June.
  26. Banerjee, A.V., 1997. "A Theory of Misgovernance," Working papers 97-4, Massachusetts Institute of Technology (MIT), Department of Economics.
  27. Thomas Piketty, 1995. "Social Mobility and Redistributive Politics," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 551-584.
  28. repec:oup:qjecon:v:117:y:2002:i:1:p:1-37 is not listed on IDEAS
  29. Tabellini, Guido, 2007. "Culture and Institutions," CEPR Discussion Papers 6589, C.E.P.R. Discussion Papers.
  30. Yann Algan & Pierre Cahuc, 2007. "Social Attitudes and Economic Development : An Epidemiological Approach," Sciences Po publications info:hdl:2441/8814, Sciences Po.
  31. Carlin, Bruce Ian & Dorobantu, Florin & Viswanathan, S., 2009. "Public trust, the law, and financial investment," Journal of Financial Economics, Elsevier, vol. 92(3), pages 321-341, June.
  32. Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
  33. Edward L. Glaeser & Andrei Shleifer, 2001. "The Rise of the Regulatory State," NBER Working Papers 8650, National Bureau of Economic Research, Inc.
  34. John F. Helliwell & Robert D. Putnam, 1999. "Education and Social Capital," NBER Working Papers 7121, National Bureau of Economic Research, Inc.
  35. repec:oup:qjecon:v:110:y:1995:i:3:p:551-84 is not listed on IDEAS
  36. repec:spo:wpecon:info:hdl:2441/8814 is not listed on IDEAS
  37. Shleifer, Andrei, 1997. "Government in transition," European Economic Review, Elsevier, vol. 41(3-5), pages 385-410, April.
  38. repec:spo:wpecon:info:hdl:2441/8813 is not listed on IDEAS
  39. repec:oup:qjecon:v:117:y:2002:i:4:p:1193-1229 is not listed on IDEAS
  40. repec:oup:qjecon:v:112:y:1997:i:4:p:1251-88 is not listed on IDEAS
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-00396268. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.