Regulation and Distrust

Philippe Aghion, Yann Algan, Pierre Cahuc and Andrei Shleifer

The Quarterly Journal of Economics, 2010, vol. 125, issue 3, 1015-1049

Abstract: We document that, in a cross section of countries, government regulation is strongly negatively correlated with measures of trust. In a simple model explaining this correlation, distrust creates public demand for regulation, whereas regulation in turn discourages formation of trust, leading to multiple equilibria. A key implication of the model is that individuals in low-trust countries want more government intervention even though they know the government is corrupt. We test this and other implications of the model using country- and individual-level data on trust and beliefs about the role of government, as well as on changes in beliefs during the transition from socialism.

Date: 2010
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Citations: View citations in EconPapers (426)

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Related works:
Working Paper: Regulation and Distrust (2010)
Working Paper: Regulation and Distrust (2010)
Working Paper: Regulation and Distrust (2010)
Working Paper: Regulation and Distrust (2009)
Working Paper: Regulation and Distrust (2009)
Working Paper: Regulation and Distrust (2009)
Working Paper: Regulation and Distrust (2009)
Working Paper: Regulation and Distrust (2009)
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