How Does Social Trust Affect Economic Growth?

No 06-2, Working Papers from University of Aarhus, Aarhus School of Business, Department of Economics

Abstract: This paper connects two strands of the literature on social trust by estimating the effects of trust on growth through a set of potential transmission mechanisms directly. It does so by modelling the process using a three-stage least squares estimator on a sample of countries for which a full data set is available. The results indicate that trust affects schooling and the rule of law directly. These variables in turn affect the investment rate (schooling) and provide a direct effect (rule of law) on the growth rate. The paper closes with a short discussion of the relevance of the findings.

Keywords: Growth; Trust; Transmission mechanisms (search for similar items in EconPapers)
JEL-codes: N40 O10 Z13 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2006-05-04
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 (11)

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Journal Article: How Does Social Trust Affect Economic Growth? (2012)
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