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

Christian Bjørnskov

Aarhus University - Department of Economics and Business; Research Institute of Industrial Economics (IFN); Center for Political Studies

Date Written: April 2, 2009

Abstract

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

Bjørnskov, Christian, How Does Social Trust Affect Economic Growth? (April 2, 2009). Aarhus Economics Working Paper No. 06-2. Available at SSRN: https://ssrn.com/abstract=900201 or http://dx.doi.org/10.2139/ssrn.900201

Christian Bjørnskov (Contact Author)

Aarhus University - Department of Economics and Business ( email )

Fuglesangs Allé 4
Aarhus V, DK-8210
Denmark

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Center for Political Studies

Landgreven 3
Copenhagen K, DK-1301
Denmark

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