Trust and the protection of property rights: evidence from global regions

Kee Hoon Chung () and Hyeok Yong Kwon ()
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Kee Hoon Chung: KDI School
Hyeok Yong Kwon: Korea University

Public Choice, 2021, vol. 189, issue 3, No 9, 493-513

Abstract: Abstract In this study, we address the issue of whether trust enhances institutional quality. Despite accumulated research on the topic, comparative studies examining whether such a relationship holds across different regions are rare. Consequently, in this study, we focus on the heterogeneous effect of trust on the protection of property rights worldwide. According to our research, in Western democracies, owing to relatively effective legal systems, trust facilitates cooperation among citizens in utilizing public means to collectively secure properties. In contrast, in other parts of the world, owing to less effective legal systems, citizens with high levels of trust, who presumably have access to many social resources, utilize private means such as informal networks, for protecting property rights. Our empirical analysis of time-series cross-sectional data, and individual-level survey data yields evidence supporting the aforementioned assertion. Moreover, we find suggestive evidence of a causal mechanism linking trust and institutional quality.

Keywords: Social trust; Institutional quality; Protection of property rights; Legal system; Global regions (search for similar items in EconPapers)
JEL-codes: P51 Z13 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11127-021-00901-1

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