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The impact of formal institutions on social trust formation: A social-cognitive approach

Author

Listed:
  • Tamilina, Larysa
  • Tamilina, Natalya

Abstract

While formal institutions are recognized as having an effect on trust formation, no theoretical or empirical models exist to formalize this relationship. This study introduces a new conceptual framework to explain trust building by individuals and the role that formal rules and laws may play in this process. Drawing on a social-cognitive theory of psychology, we present trust as composed of personal, interpersonal, and intrapersonal components with the latter encompassing formal institutions. We further demonstrate that there are three mechanisms – sanction, legitimacy, and autonomy – through which formal institutions may affect trust levels either directly or indirectly. In addition, our empirical analysis furnishes evidence of heterogeneity in institutional effects on trust, suggesting that the autonomy dimension of the institutional framework is particularly important for trust formation processes.

Suggested Citation

  • Tamilina, Larysa & Tamilina, Natalya, 2014. "The impact of formal institutions on social trust formation: A social-cognitive approach," MPRA Paper 63203, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:63203
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    File URL: https://mpra.ub.uni-muenchen.de/63203/1/MPRA_paper_63203.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Interpersonal trust; trust formation processes; formal institutions; social-cognitive psychology;

    JEL classification:

    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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