Forthcoming, Oxford Handbook of Social and Political Trust, (Eric M. Uslaner, ed.) ISBN: 9780190274801
37 Pages Posted: 28 Jan 2017
Date Written: January 26, 2017
This chapter provides a selective survey of the literature on the association between social trust and economic growth. The chapter is divided into two main sections. The first section outlines the main theoretical arguments for how social trust could affect the long-run growth rate and economic performance of the economy. These theoretical mechanisms can both be direct or work indirectly through affecting institutions, factor accumulation and the elasticity of substitution. An overview of a set of relevant theoretical mechanisms also reveals that some only affect growth under specific conditions. The second section is devoted to reviewing the evidence of an empirical association. While the literature clearly supports a causal effect of trust on growth, the empirical section as well as the conclusions suggest a number of ways in which the field may move forward.
Keywords: O10, N40, Z13
JEL Classification: Social trust, economic growth, economic development
Suggested Citation: Suggested Citation
Bjørnskov, Christian, Social Trust and Economic Growth (January 26, 2017). Forthcoming, Oxford Handbook of Social and Political Trust, (Eric M. Uslaner, ed.) ISBN: 9780190274801 . Available at SSRN: https://ssrn.com/abstract=2906280 or http://dx.doi.org/10.2139/ssrn.2906280