The relationship between institutional quality, trust and private savings

François Facchini, Sophie Massin and Kevin Brookes ()
Additional contact information
Kevin Brookes: PACTE - Pacte, Laboratoire de sciences sociales - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - IEPG - Sciences Po Grenoble-UGA - Institut d'études politiques de Grenoble - UGA - Université Grenoble Alpes

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: This paper draws on macroeconomics, the economics of institutions and the economics of trust to explain private savings at the national level for 33 OECD (mostly European) countries from 2002 to 2012. More specifically, it raises two questions: (i) is it the quality of institutions or trust in institutions that drives private savings? (ii) if trust matters, what is the appropriate institutional level at which it operates? To answer these questions, we add to the usual explanatory variables of private savings three measures of institutional quality and six measures of institutional trust, distributed between the following institutional levels, presented in assumed hierarchical order: political, legal, financial and social. We find that trust in political institutions is the most significant driver of private savings. This contributes to the literature underlining the importance of subjectivity in social and economic phenomena and suggests, for private bank savings in countries having highly regulated banking systems, the existence of a hierarchy of trust in which trust in the highest-ranking institutions (political – and to a lesser extent legal – institutions) acts as a substitute for trust in every lower-ranking institution (financial institutions and social trust).

Keywords: belief; institutional quality; social trust; private saving; subjectivity; institutional trust; property right (search for similar items in EconPapers)
Date: 2024-01-08
Note: View the original document on HAL open archive server: https://hal.science/hal-04379761v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Journal of Institutional Economics, 2024, 20 (e8), pp.1-28. ⟨10.1017/S1744137423000346⟩

Downloads: (external link)
https://hal.science/hal-04379761v1/document (application/pdf)

Related works:
Working Paper: The relationship between institutional quality, trust and private savings (2024)
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:hal:cesptp:hal-04379761

DOI: 10.1017/S1744137423000346

Access Statistics for this paper

More papers in Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL
Bibliographic data for series maintained by CCSD ().