A road to trust

Julien Labonne and Robert S. Chase

No 4706, Policy Research Working Paper Series from The World Bank

Abstract: The authors explore the relationship between transaction costs and generalized trust. Using panel data from 2,100 households in 135 rural communities of the Philippines, the paper shows that where transaction costs are reduced (proxied by road construction), there is an increase in generalized trust. Consistent with the argument that generalized trust is built through repeated interactions, the authors find that the individuals most likely to engage in exchange exhibit an increase in trust after road construction. These results suggest that, rather than being an input to economic growth, trust might be a product of reduced transaction costs (which also favors growth).

Keywords: Post Conflict Reconstruction; Transport Economics Policy&Planning; Rural Roads&Transport; Social Capital; Corporate Law (search for similar items in EconPapers)
Date: 2008-09-01
New Economics Papers: this item is included in nep-dev and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: A road to trust (2010)
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