Trust in Diverse, Integrated, Cities: A Revisionist Perspective

Abstract:     
A large body of recent research claims that diversity hinders general trust, but these studies suffer from omitted variables bias by excluding the institutional context of intergroup relations, specifically segregation. This article re-examines the issue by considering how the residential isolation of minorities alters general trust, prejudicial attitudes, and volunteering in cities. The results strongly suggest that both metropolitan and local level integration increases trust. The results are robust to a variety of specifications. The use of historic metropolitan and state characteristics, such as experiences with slavery, improves the fit between segregation and distrust. Further evidence finds that segregation decreases inter-group trust by intensifying racial prejudice against minorities, but evidence is also presented that segregation limits within-group trust, or at least cooperative informal transactions measured by volunteer rates. High levels of trust have been identified as a source of good governance and economic performance; integration is likely to enhance these attributes under republican institutions, regardless of the level of diversity.

Number of Pages in PDF File: 52

Keywords: trust, diversity, segregation, racism, prejudice, voting

JEL Classification: J15, H7, E02, Z10, P16

working papers series