Trust, Growth and Well-Being: New Evidence and Policy Implications

88 Pages Posted: 9 Jul 2013

See all articles by Yann Algan

Yann Algan

Sciences Po

Pierre Cahuc

Ecole Polytechnique, Paris

Date Written: July 2013

Abstract

This survey reviews the recent research on trust, institutions and economic development. It discusses the various measures of trust and documents the substantial heterogeneity of trust across space and time. The conceptual mechanisms that explain the influence of trust on economic performance and the methods employed to identify the causal impact of trust on economic performance are reviewed. We document the mechanisms of interactions between trust and economic development in the realms of finance, innovation, the organization of firms, the labor market and the product market. We also document recent research on the impact of trust on human development and well-being. The last part reviews recent progress to identify how institutions and policies can affect trust and promote pro-social behaviors.

Keywords: growth, human development, institutions, trust, well-being

JEL Classification: O11, O43, Z13

Suggested Citation

Algan, Yann and Cahuc, Pierre, Trust, Growth and Well-Being: New Evidence and Policy Implications (July 2013). CEPR Discussion Paper No. DP9548. Available at SSRN: https://ssrn.com/abstract=2291369

Pierre Cahuc

Ecole Polytechnique, Paris ( email )

1 rue Descartes
Paris, 75005
France

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