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Trust Institutions, Perceptions of Economic Performance and the Mitigating role of Political Diversity in Sub-Saharan Africa

Samba Diop () and Simplice Asongu
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Samba Diop: Alioune Diop University, Bambey, Senegal

No 23/013, Working Papers from European Xtramile Centre of African Studies (EXCAS)

Abstract: Several previous studies have explored the relationship between trust and socio-economic conditions but do not attempt to examine channels through which the relation operates. In this paper, we examine how political fractionalization mitigates the positive relationship between trust institutions and national economic performance in Sub-Saharan Africa. Using Round 7 data of Afrobarometer in over 1000 districts in 34 countries, we find that trust institutions positively and significantly affect economic performance. Nevertheless, the positive effect is attenuated in districts with a high level of political diversity. More specifically, a higher level of trust is associated with lower economic performance at a higher level of political fractionalization and vice versa, with a steady linear decrease of the estimated coefficients. Policy implications are discussed.

Keywords: Trust institutions; economic performance; political diversity (search for similar items in EconPapers)
JEL-codes: K00 O10 P16 P43 P50 (search for similar items in EconPapers)
Pages: 30
Date: 2023-01
New Economics Papers: this item is included in nep-pol
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Forthcoming: Review of Black Political Economy

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http://publications.excas.org/RePEc/exs/exs-wpaper ... diversity-in-SSA.pdf Revised version, 2023 (application/pdf)

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