Trust and Economic Growth

Tinbergen Institute Working Paper No. 2002-049/3

22 Pages Posted: 25 Jun 2002

See all articles by Sjoerd Beugelsdijk

Sjoerd Beugelsdijk

University of Groningen

Henri L. F. de Groot

Vrije Universiteit Amsterdam; Tinbergen Institute

A. B. T. M. (Ton) van Schaik

Tilburg University - Department of Economics

Date Written: 2002

Abstract

Economists increasingly pay attention to social capital as an important determinant of macroeconomic growth performance. At the same time, there is discussion regarding the robustness of the results of empirical growth studies. In a seminal paper, Knack and Keefer (1997) assess the effect of trust on growth. This paper analyses the robustness of their results along several dimensions, acknowledging the complexity of the robustness concept. Our findings show that the robustness of the relationship between trust and growth in terms of both the size and the significance of the estimated effect, is highly dependent on the set of conditioning variables. An answer to the question whether there is an economic payoff of trust - and if so, how large this payoff actually is - is therefore difficult to provide on the basis of cross sectional empirical growth studies.

Keywords: Robustness, Trust, Economic Growth

JEL Classification: C12, Z13

Suggested Citation

Beugelsdijk, Sjoerd and de Groot, Henri L.F. and van Schaik, A. B. T. M. (Ton), Trust and Economic Growth (2002). Tinbergen Institute Working Paper No. 2002-049/3, Available at SSRN: https://ssrn.com/abstract=315006 or http://dx.doi.org/10.2139/ssrn.315006

Sjoerd Beugelsdijk

University of Groningen ( email )

P.O. Box 800
9700 AH Groningen, Groningen 9700 AV
Netherlands

Henri L.F. De Groot (Contact Author)

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081 HV
Netherlands
0640494981 (Phone)
2135 DL (Fax)

Tinbergen Institute

Gustav Mahlerplein 17
Amsterdam, 1082 MS
Netherlands

A. B. T. M. (Ton) Van Schaik

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 (0)13 466 2420 (Phone)

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