Institutional Quality Causes Social Trust: Experimental Evidence on Trusting Under the Shadow of Doubt

22 Pages Posted: 17 Nov 2020 Last revised: 4 Feb 2021

See all articles by Andrea FM Martinangeli

Andrea FM Martinangeli

Burgundy School of Business; University of Gothenburg - Centre for Collective Action (CeCAR)

Marina Povitkina

Göteborg University, Department of Political Science, Students

Sverker C. Jagers

Lulea University of Technology (LTU) - Political Science Unit

Bo Rothstein

University of Gothenburg

Multiple version iconThere are 2 versions of this paper

Date Written: November 16, 2020

Abstract

Social trust is a crucial ingredient for successful collective action. What causes social trust to develop, however, remains poorly understood. The quality of political institutions has been proposed as a candidate driver and has been shown to correlate with social trust. We show that this relationship is causal. We begin by documenting a positive correlation between quality of institutions, measured by embezzlement, and social trust using survey data. We then take the investigation to the laboratory: We first exogenously expose subjects to different levels of institutional quality in an environment mimicking public administration embezzlement. We then measure social trust among the participants using a trust game. Coherent with our survey evidence, individuals exposed to low institutional quality trust significantly less.

Keywords: Social trust, quality of government, corruption

JEL Classification: D63, D73

Suggested Citation

Martinangeli, Andrea and Povitkina, Marina and Jagers, Sverker C. and Rothstein, Bo, Institutional Quality Causes Social Trust: Experimental Evidence on Trusting Under the Shadow of Doubt (November 16, 2020). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2020-04, Available at SSRN: https://ssrn.com/abstract=3731331

Andrea Martinangeli (Contact Author)

Burgundy School of Business ( email )

29 Rue Sambin
Dijon, 21000
France

University of Gothenburg - Centre for Collective Action (CeCAR) ( email )

Box 100, S-405 30
Gothenburg
Sweden

Marina Povitkina

Göteborg University, Department of Political Science, Students ( email )

Box 711
Göteborg
Sweden

Sverker C. Jagers

Lulea University of Technology (LTU) - Political Science Unit ( email )

Lulea, SE 97187
Sweden

Bo Rothstein

University of Gothenburg ( email )

Box 711
Gothenburg, SE 40530
Sweden
+46317864599 (Fax)

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