Free to Trust? Economic Freedom and Social Capital

Arbeitspapier

We present new evidence on how generalized trust is formed. Unlike previous studies, we look at the explanatory power of economic institutions, we use newer data, we incorporate more countries, and we use instrumental variables to handle the causality problem. A central result is that legal structure and security of property rights (area 2 of the Economic Freedom Index) increase trust. The idea is that a market economy, building on voluntary transactions and interactions with both friends and strangers within the predictability provided by the rule of law, entails both incentives and mechanisms for trust to emerge between people.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2005:2

Classification and Topics

• Classification: Wirtschaft ; Illegal Behavior and the Enforcement of Law ; Economic Growth and Aggregate Productivity: General ; Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
• Subject: social capital ; trust ; economic freedom ; rule of law ; property rights ; legal system ; Social Capital ; Vertrauen ; Wirtschaftsliberalismus ; Rechtsstaat ; Eigentumsrechtstheorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Berggren, Niclas ; Jordahl, Henrik
• Event: Veröffentlichung
• (who): Uppsala University, Department of Economics
• (where): Uppsala
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/82755
• URN: urn:nbn:se:uu:diva-79347
• Last update: 10.03.2025, 11:42 AM CET