Trust as Societal Capital: Economic Growth in European Regions

Wim Moesen, Tom van Puyenbroeck and Laurens Cherchye

Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: The neo-institutional approach to economic phenomena has forwarded the institutional framework within a society as a fundamental determinant of economic performance. Cultural characteristics, also referred to as "societal capital", have gained specific attention in this respect. Basically, a culture that is characterised by trust is increasingly considered as a competitive advantage. This paper fits in this neo-institutional perspective. We outline an integrated conceptual framework that articulates the direct and indirect channels through which a culture may influence the economic record. Confining to economic growth as an indicator of economic performance and using data from the European Value Study, we subsequently investigate empirically the link between cultural values and economic performance, hereby focusing on a European sample that includes regions as units of observation. This empirical evidence indeed seems to confirm the trust-growth hypothesis. Building on this result, we finally consider a number of possible policy implications. We hereby envisage the government as the main designer of the formal institutional framework within which economic agents interact. In addition, we emphasise the government’s exemplary role as a visible emanation of societal values.

Date: 2000-01
References: Add references at CitEc
Citations:

Downloads: (external link)
https://lirias.kuleuven.be/bitstream/123456789/121648/1/Dps0001.pdf

Related works:
Working Paper: Trust as societal capital: economic growth in European regions (2000)
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:ete:ceswps:ces0001

Access Statistics for this paper

More papers in Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven
Bibliographic data for series maintained by library EBIB ().