The Role of Government and Trust in the Market Economy

Nadja König and Ludger Schuknecht

No 6997, CESifo Working Paper Series from CESifo

Abstract: This paper studies the role of governments and its link to trust. We argue that the public’s trust strongly depends on governments delivering on their core tasks in a market economy. In some economies, a neglect of core tasks can be observed and there seems to be some erosion, notably in terms of securing sound rules of the game in industrialised countries. We find very little correlation between government expenditure and trust but a strong correlation with delivering on core tasks. This leads us to conclude that it is not government spending per se that needs to increase to build trust, but rather better focused government activities.

Keywords: role of government; public goods; trust in government; quality of public finances (search for similar items in EconPapers)
JEL-codes: H11 H41 H50 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-pbe and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6997

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