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

Andrea Martinangeli, Marina Povitkina, Sverker C. Jagers and Bo Rothstein

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: Social trust underlies virtually any social and economic interaction and is a crucial ingredient for successful collective action. What causes social trust to develop, however, remains poorly understood. Institutional quality has been proposed as a candidate driver and has been shown to correlate with social trust. We provide experimental evidence for the causal direction of this relationship. We ï¬ rst exogenously expose the participants to institutions of different quality, deï¬ ned as their ability to prevent corrupt behaviours on behalf of administrators. We then measure social trust among the participants using a trust game. We ï¬ nd that individuals exposed to settings with low institutional quality trust others signiï¬ cantly less. Moreover, using novel survey data we show that our experimental results correspond to correlational patterns usually found across countries. The paper makes a step forward in the decades-long search for the causality between institutional quality and social trust.

Keywords: Social trust; quality of government; corruption; embezzlement (search for similar items in EconPapers)
JEL-codes: D63 D73 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2020-11
New Economics Papers: this item is included in nep-exp and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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