Does Trust Influence Social Expenditures? Evidence from Local Governments

27 Pages Posted: 12 Jan 2018

Date Written: February 2018

Abstract

We document that trust has a positive impact on the generosity of welfare spending. Our analysis relies on a unique dataset including detailed budgetary data of more than 2,000 Italian municipalities. Compared with previous contributions based on cross‐country data, our approach reduces the risk of omitted variable bias and measurement errors. Furthermore, drawing on Italy's rich political history, we are able to use an instrumental variables strategy that addresses the possible endogeneity of trust.

Suggested Citation

Camussi, Silvia and Mancini, Anna Laura and Tommasino, Pietro, Does Trust Influence Social Expenditures? Evidence from Local Governments (February 2018). Kyklos, Vol. 71, Issue 1, pp. 59-85, 2018. Available at SSRN: https://ssrn.com/abstract=3100466 or http://dx.doi.org/10.1111/kykl.12162

Silvia Camussi (Contact Author)

Independent

No Address Available

Anna Laura Mancini

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Pietro Tommasino

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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