Social Trust and Democracy

Sherif Khalifa ()
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Sherif Khalifa: California State University

Journal of Economic Development, 2024, vol. 49, issue 4, 1-23

Abstract: This paper examines the effect of social trust on democracy and identifies the channels of transmission. The paper uses the World Values Survey to examine the effect of social trust on democracy. To account for potential endogeneity, the paper uses instrumental variables for social trust. The instruments used are the mean elevation and the terrain ruggedness. The estimation results for cross section and panel data show that trust, instrumented by these topographic variables, has a statistically significant positive effect on democracy. The evidence also indicates that trust affects democracy indirectly through enhancing institutional quality which improves democratic governance according to the Hayek-Friedman hypothesis, and through inducing the accumulation of human capital which in turn improves democratic governance according to the modernization theory. The results are robust using alternative techniques and different indicators and datasets.

Keywords: Geography; Trust; Democracy (search for similar items in EconPapers)
JEL-codes: O10 P50 Z10 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jecdev:0098

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