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Trust, assocational life, and economic performance

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  • Knack, Stephen

Abstract

Assuming that J. S. Mill and others are correct in their belief that trust matters for the economic performance of nations, the determinants of trust become important. Section 2 discusses the sources of trust and briefly summarizes empirical evidence. Section 3 builds on Fukuyama’s concept of the “radius of trust” to identify the type of trust which should be advantageous to national economic performance. Section 4 addresses measurement issues. Evidence on trust and economic performance relies heavily on the use of a single survey indicator of trust: in light of the potential for translation problems and other sources of measurement error, can this indicator be trusted? Section 5 presents empirical evidence on trust and economic performance, for a 25-nation OECD sample and for a larger 40-country sample. Section 6 presents evidence on the relationship between associational life and economic performance, testing the conflicting theoretical perspectives of Putnam (1993) and Olson (1982). Section 7 briefly concludes.

Suggested Citation

  • Knack, Stephen, 2001. "Trust, assocational life, and economic performance," MPRA Paper 27247, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:27247
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    File URL: https://mpra.ub.uni-muenchen.de/27247/1/MPRA_paper_27247.pdf
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    References listed on IDEAS

    as
    1. John F. Helliwell, 1996. "Economic Growth and Social Capital in Asia," NBER Working Papers 5470, National Bureau of Economic Research, Inc.
    2. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
    3. De Long, J Bradford & Shleifer, Andrei, 1993. "Princes and Merchants: European City Growth before the Industrial Revolution," Journal of Law and Economics, University of Chicago Press, vol. 36(2), pages 671-702, October.
    4. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    5. repec:aph:ajpbhl:1997:87:9:1491-1498_6 is not listed on IDEAS
    6. Gordon Bergsten, 1985. "On the role of social norms in a market economy," Public Choice, Springer, vol. 45(2), pages 113-137, January.
    7. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 811-846.
      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
    8. repec:cup:apsrev:v:83:y:1989:i:02:p:481-501_08 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Besir Ceka and Brian Burgo, 2014. "Discovering Cooperation: A Contractual Approach to Institutional Change in Regional International Organizations," EUI-RSCAS Working Papers p0388, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    2. Helliwell, John F., 2003. "How's life? Combining individual and national variables to explain subjective well-being," Economic Modelling, Elsevier, vol. 20(2), pages 331-360, March.
    3. 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.
    4. Markus Leibrecht & Hans Pitlik, 2014. "Generalised Trust, Institutional and Political Constraints on the Executive and Deregulation of Markets," WIFO Working Papers 481, WIFO.
    5. repec:spr:soinre:v:132:y:2017:i:3:d:10.1007_s11205-016-1332-3 is not listed on IDEAS
    6. Charron, Nicholas & Rothstein, Bo, 2016. "Does education lead to higher generalized trust? The importance of quality of government," International Journal of Educational Development, Elsevier, vol. 50(C), pages 59-73.
    7. Markus Leibrecht & Silvia Rocha-Akis, 2014. "Social Partnership and Macroeconomic Performance," WIFO Monatsberichte (monthly reports), WIFO, vol. 87(8), pages 555-567, August.
    8. Tu, Qin & Mol, Arthur P.J. & Zhang, Lei & Ruben, Ruerd, 2011. "How do trust and property security influence household contributions to public goods?," China Economic Review, Elsevier, vol. 22(4), pages 499-511.
    9. Christian Bjørnskov, 2007. "Determinants of generalized trust: A cross-country comparison," Public Choice, Springer, vol. 130(1), pages 1-21, January.

    More about this item

    Keywords

    trust; social capital; growth;

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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