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

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Listed:
  • Pitlik, Hans

    () (Austrian Institute of Economic Research (WIFO))

  • Kouba, Ludek

    (Mendel University in Brno, The Czech Republic)

Abstract

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.

Suggested Citation

  • Pitlik, Hans & Kouba, Ludek, 2014. "Does social distrust always lead to a stronger support for government intervention?," Ratio Working Papers 227, The Ratio Institute.
  • Handle: RePEc:hhs:ratioi:0227
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    References listed on IDEAS

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    Cited by:

    1. Nikolaev, Boris & Boudreaux, Christopher & Salahodjaev, Rauf, 2017. "Are individualistic societies less equal? Evidence from the parasite stress theory of values," Journal of Economic Behavior & Organization, Elsevier, vol. 138(C), pages 30-49.
    2. Polyachenko Sergiy, 2016. "Do changes in social and economic characteristics affect attitude towards price control?," EERC Working Paper Series 16/05e, EERC Research Network, Russia and CIS.
    3. Berggren, Niclas & Bjørnskov, Christian, 2017. "The Market-Promoting and Market-Preserving Role of Social Trust in Reforms of Policies and Institutions," Working Paper Series 1152, Research Institute of Industrial Economics.
    4. repec:cup:jinsec:v:13:y:2017:i:03:p:575-598_00 is not listed on IDEAS
    5. repec:voj:journl:v:64:y:2017:i:4:p:383-400 is not listed on IDEAS
    6. Leibrecht, Markus & Pitlik, Hans, 2015. "Social trust, institutional and political constraints on the executive and deregulation of markets," European Journal of Political Economy, Elsevier, vol. 39(C), pages 249-268.
    7. Ludek Kouba & Hans Pitlik, 2014. "I wanna live my life: Locus of Control and Support for the Welfare State," MENDELU Working Papers in Business and Economics 2014-46, Mendel University in Brno, Faculty of Business and Economics.
    8. Markus Leibrecht & Hans Pitlik, 2014. "Generalised Trust, Institutional and Political Constraints on the Executive and Deregulation of Markets," WIFO Working Papers 481, WIFO.
    9. Bergh, Andreas & Bjørnskov, Christian, 2016. "Burying the Bumblebee Once and for All:," Working Paper Series 1119, Research Institute of Industrial Economics.
    10. Niclas Berggren & Christian Bjørnskov & David Lipka, 2015. "Legitimacy and the cost of government," Public Choice, Springer, vol. 162(3), pages 307-328, March.
    11. Hans Pitlik, 2016. "Who Disapproves of TTIP? Multiple Distrust in Companies and Political Institutions," WIFO Working Papers 513, WIFO.
    12. Pitlik, Hans & Rode, Martin, 2017. "Individualistic values, institutional trust, and interventionist attitudes," Journal of Institutional Economics, Cambridge University Press, vol. 13(03), pages 575-598, September.
    13. Bergh, Andreas & Bjørnskov, Christian, 2014. "Trust, welfare states and income equality: Sorting out the causality," European Journal of Political Economy, Elsevier, vol. 35(C), pages 183-199.
    14. Gutmann, Jerg & Voigt, Stefan, 2017. "Judicial Independence in the EU – A Puzzle," ILE Working Paper Series 4, University of Hamburg, Institute of Law and Economics.
    15. Svatopluk Kapounek, 2016. "The Impact of Institutional Quality on Bank Lending Activity: Evidence from Bayesian Model Averaging," MENDELU Working Papers in Business and Economics 2016-69, Mendel University in Brno, Faculty of Business and Economics.
    16. John V. Nye & Maksym Bryukhanov & Sergiy Polyachenko, 2016. "Does Higher Education Contribute to a Change in Attitudes to Government Price Control in Russia?," HSE Working papers WP BRP 146/EC/2016, National Research University Higher School of Economics.
    17. repec:fau:fauart:v:67:y:2017:i:5:p:372-395 is not listed on IDEAS

    More about this item

    Keywords

    social trust; institutional trust; government regulation; preference formation;

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H10 - Public Economics - - Structure and Scope of Government - - - General

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