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How Does Social Trust Affect Economic Growth?
Author(s) -
Bjørnskov Christian
Publication year - 2012
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.4284/0038-4038-78.4.1346
Subject(s) - social trust , relevance (law) , estimator , affect (linguistics) , set (abstract data type) , sample (material) , economics , econometrics , raising (metalworking) , structural equation modeling , microeconomics , public economics , political science , psychology , computer science , law , social capital , mathematics , statistics , chemistry , communication , chromatography , programming language , geometry
This article connects two strands of the literature on social trust by directly estimating the effects of trust on growth through a set of potential transmission mechanisms. It does so by modeling the process using a 3SLS estimator on a sample of 85 countries for which a full data set is available. The results indicate that trust affects schooling and the rule of law directly, thereby raising economic growth rates. The article closes with a short discussion of the relevance of the findings.