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Trust in state institutions is a prominent explanation of social trust. However, previous—mainly cross-sectional—analyses provide limited causal evidence regarding the relationship between institutional trust and social trust and it is thus essentially unknown whether an observed relationship reflects reverse causality (social trust forming institutional trust), or both forms of trust reflecting deep-seated dispositions (common confounding). Against the backdrop of the shortcomings of previous cross-sectional analyses, this paper utilizes two Danish panel surveys containing measures of both types of trust for the same individuals surveyed at multiple points in time over a long time-span (up to 18 years) to address the potentially reverse and/or spurious relationship. Using individual fixed effects and cross-lagged panel models, the results provide strong evidence of trust in state institutions exercising a causal impact on social trust, whereas the evidence for a reverse relationship is limited.

Trusting the State, Trusting Each Other? The Effect of Institutional Trust on Social Trust