Costs of Mistrust between Ethnic Majority and Minorities: Evidence from Israel

Miki Malul, Mosi Rosenboim () and Tal Shavit ()

Review of Social Economy, 2010, vol. 68, issue 4, 447-464

Abstract: Trust and ethnic diversity are important variables that may impact and explain different economic decisions. This paper presents theoretical models accompanied by a survey that deals with the relation between mistrust and risky economic activity (e.g., the postponement of receiving and paying for a risky asset). Using the theoretical models and surveys as a basis, we suggest that subjective discount rates and bids for a lottery can be used to measure levels of mistrust. The surveys are used to measure the level of mistrust between the Israeli majority (Jews) and minority groups (Israeli Arabs, Bedouins, and Palestinians), and between Israeli Jews from different districts. Based on the survey results we demonstrate the theoretical implications of the effect of mistrust (MT) on economic growth and resource allocation between the majority and minorities. We conclude that MT leads to inefficient resource allocation, which subsequently leads to low economic growth rates.

Keywords: risk attitude; trust; cross-cultural; minority; resource allocation (search for similar items in EconPapers)
Date: 2010
References: View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/00346760903480541 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rsocec:v:68:y:2010:i:4:p:447-464

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RRSE20

DOI: 10.1080/00346760903480541

Access Statistics for this article

Review of Social Economy is currently edited by Wilfred Dolfsma and John Davis

More articles in Review of Social Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().