Aghion, P.; Algun, Y.; Cahuc, P.; Shleifer, A.; (2009) Regulation and distrust. (NBER Working Papers 14648). National Bureau of Economic Research: Cambridge, US.

Preview

PDF 17763.pdf Download (371kB)

Abstract

In a cross-section of countries, government regulation is strongly negatively correlated with social capital. We document this correlation, and present a model explaining it. In the model, distrust creates public demand for regulation, while regulation in turn discourages social capital accumulation, leading to multiple equilibria. A key implication of the model is that individuals in low trust countries want more government intervention even though the government is corrupt. We test this and other implications of the model using country- and individual-level data on social capital and beliefs about government's role, as well as on changes in beliefs and in trust during the transition from socialism.

Download activity - last month

Export as XMLCSVJSON

Download activity - last 12 months

Export as JSONCSVXML

Downloads by country - last 12 months

Export as JSONXMLCSV

Archive Staff Only

View Item