Historical Trust Levels Predict Current Welfare State Design

Andreas Bergh and Christian Bjørnskov

No 144, Ratio Working Papers from The Ratio Institute

Abstract: Using cross-sectional data for 76 countries, we apply instrumental variable techniques based on pronoun drop, temperature and monarchies to demonstrate that historical trust levels predict several indicators of current welfare state design, including universalism and high levels of regulatory freedom. We argue that high levels of trust and trustworthiness are necessary, but not sufficient, conditions for societies to develop successful universal welfare states that would otherwise be highly vulnerable to free riding and fraudulent behavior. Our results do not exclude positive feedback from welfare state universalism to individual trust, although we claim that the important causal link runs from historically trust levels to current welfare state design.

Keywords: Social trust; Welfare State (search for similar items in EconPapers)
JEL-codes: Z13 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2009-10-29
New Economics Papers: this item is included in nep-cbe and nep-soc
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Citations: View citations in EconPapers (9)

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