How Does Social Trust Affect Economic Growth?
Aarhus Economics Working Paper No. 06-2
43 Pages Posted: 9 May 2006 Last revised: 7 Aug 2014
Date Written: April 2, 2009
This paper connects two strands of the literature on social trust by estimating the effects of trust on growth through a set of potential transmission mechanisms directly. It does so by modelling the process using a three-stage least squares estimator on a sample of countries for which a full data set is available. The results indicate that trust affects schooling and the rule of law directly and thereby raises economic growth rates. The paper closes with a short discussion of the relevance of the findings.
Keywords: Growth, Trust, Transmission mechanisms
JEL Classification: O10, N40, Z13
Suggested Citation: Suggested Citation