Trust, confidence and economic growth: An evaluation of the Beugelsdijk Hypothesis

Arbeitspapier

This paper analyses the hypothesis that the robust relationship between trust - as measured by the World Values Survey's question 'In general, do you think that most people can be trusted, or that you can't be too careful in dealing with people?' - and economic growth, established by empirical macroeconomic growth literature (Knack & Keefer, 1997; Zak & Knack, 2001; Beugelsdijk, de Groot, & van Schaik, 2004; Dearmon & Grier, 2009) in fact captures the well-functioning of institutions. Our results reveal that the correlation between trust and economic growth is robust in terms of statistical significance and sign of the estimated coefficient, when controling for the respondents' perceived well-functioning of institutions. While underlining the existing empirical evidence that trust matters in explaining differences in economic performance, our results also show that this influence is largely independent of institutional well-functioning.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Jena Economic Research Papers ; No. 2010,080

Classification and Topics

• Classification: Wirtschaft ; Economic Methodology: General ; Macroeconomic Analyses of Economic Development ; Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
• Subject: trust ; institutions ; economic growth ; Vertrauen ; Institutionalismus ; Wirtschaftswachstum ; Soziale Werte ; Schätzung ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Volland, Benjamin
• Event: Veröffentlichung
• (who): Friedrich Schiller University Jena and Max Planck Institute of Economics
• (where): Jena
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/56888
• Last update: 10.03.2025, 11:41 AM CET