IDEAS home Printed from https://ideas.repec.org/p/ete/ceswps/ces0001.html
   My bibliography  Save this paper

Trust as Societal Capital: Economic Growth in European Regions

Author

Listed:
  • Wim MOESEN
  • Tom VAN PUYENBROECK
  • Laurens CHERCHYE

Abstract

The neo-institutional approach to economic phenomena has forwarded the institutional framework within a society as a fundamental determinant of economic performance. Cultural characteristics, also referred to as "societal capital", have gained specific attention in this respect. Basically, a culture that is characterised by trust is increasingly considered as a competitive advantage. This paper fits in this neo-institutional perspective. We outline an integrated conceptual framework that articulates the direct and indirect channels through which a culture may influence the economic record. Confining to economic growth as an indicator of economic performance and using data from the European Value Study, we subsequently investigate empirically the link between cultural values and economic performance, hereby focusing on a European sample that includes regions as units of observation. This empirical evidence indeed seems to confirm the trust-growth hypothesis. Building on this result, we finally consider a number of possible policy implications. We hereby envisage the government as the main designer of the formal institutional framework within which economic agents interact. In addition, we emphasise the government’s exemplary role as a visible emanation of societal values.

Suggested Citation

  • Wim MOESEN & Tom VAN PUYENBROECK & Laurens CHERCHYE, 2000. "Trust as Societal Capital: Economic Growth in European Regions," Working Papers of Department of Economics, Leuven ces0001, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    • Handle: RePEc:ete:ceswps:ces0001
    as

    Download full text from publisher

    File URL: https://lirias.kuleuven.be/bitstream/123456789/121648/1/Dps0001.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Torsten Persson & Gérard Roland & Guido Tabellini, 1997. "Separation of Powers and Political Accountability," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1163-1202.
    2. Tirole, Jean, 1994. "The Internal Organization of Government," Oxford Economic Papers, Oxford University Press, vol. 46(1), pages 1-29, January.
    3. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-338, May.
    4. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1251-1288.
    5. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    6. Damien Neven & Claudine Gouymte, 1995. "Regional Convergence in the European Community," Journal of Common Market Studies, Wiley Blackwell, vol. 33(1), pages 47-65, March.
    7. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross‐Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    8. Raffaele Paci, 1997. "More similar and less equal: Economic growth in the European regions," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(4), pages 609-634, December.
    9. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Akcomak, Semih & Ter Weel, Bas, 2007. "How do social capital and government support affect innovation and growth? Evidence from the EU regional support programmes," MERIT Working Papers 2007-009, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Luk Bouckaert, 2013. "Spiritual humanism and corporate economics," Chapters, in: Luigino Bruni & Stefano Zamagni (ed.), Handbook on the Economics of Reciprocity and Social Enterprise, chapter 35, pages 344-353, Edward Elgar Publishing.
    3. Akçomak, I. Semih & ter Weel, Bas, 2009. "Social capital, innovation and growth: Evidence from Europe," European Economic Review, Elsevier, vol. 53(5), pages 544-567, July.
    4. Gioacchino Fazio & Francesca Giambona & Erasmo Vassallo & Elli Vassiliadis, 2018. "A Measure of Trust: The Italian Regional Divide in a Latent Class Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 140(1), pages 209-242, November.
    5. Gregory N. Price, 2012. "Race, Trust in Government, and Self-Employment," The American Economist, Sage Publications, vol. 57(2), pages 171-187, November.
    6. Soogwan Doh & Connie McNeely, 2012. "A multi-dimensional perspective on social capital and economic development: an exploratory analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 821-843, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. In Do Hwang, 2017. "Which Type of Trust Matters?:Interpersonal vs. Institutional vs. Political Trust," Working Papers 2017-15, Economic Research Institute, Bank of Korea.
    2. Knack, Stephen, 2002. "Governance and growth: measurement and evidence," MPRA Paper 28050, University Library of Munich, Germany.
    3. Dethier, Jean-Jacques, 1999. "Governance and Economic Performance: A Survey," Discussion Papers 279846, University of Bonn, Center for Development Research (ZEF).
    4. Chong, Alberto E., 2006. "Does It Matter How People Speak?," IDB Publications (Working Papers) 1946, Inter-American Development Bank.
    5. Arturo Galindo & Alberto Chong & César Calderón, 2001. "Structure and Development of Financial Institutions and Links with Trust: Cross-Country Evidence," Research Department Publications 4251, Inter-American Development Bank, Research Department.
    6. Méon, Pierre-Guillaume & Sekkat, Khalid, 2022. "A time to throw stones, a time to reap: how long does it take for democratic transitions to improve institutional outcomes?," Journal of Institutional Economics, Cambridge University Press, vol. 18(3), pages 429-443, June.
    7. Grogan, Louise & Moers, Luc, 2001. "Growth empirics with institutional measures for transition countries," Economic Systems, Elsevier, vol. 25(4), pages 323-344, December.
    8. Méon, Pierre-Guillaume & Sekkat, Khalid, 2015. "The formal and informal institutional framework of capital accumulation," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 754-771.
    9. Mark Gradstein & Moshe Justman, 2002. "Education, Social Cohesion, and Economic Growth," American Economic Review, American Economic Association, vol. 92(4), pages 1192-1204, September.
    10. Laurens Cherchye & Wim Moesen, 2003. "Institutional Infrastructure and Economic Performance: Levels versus Catching Up and Frontier Shifts," Public Economics Working Paper Series ces0314, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
    11. Kevin H. O'Rourke, 2001. "Culture, politics and innovation: evidence from the creameries," Trinity Economics Papers 200120, Trinity College Dublin, Department of Economics.
    12. Christian Bjørnskov & Pierre-Guillaume Méon, 2012. "Trust as the missing root of institutions, education, and development," Working Papers CEB 12-031, ULB -- Universite Libre de Bruxelles.
    13. Dustin Chambers & Susan Hamer, 2012. "Culture And Growth: Some Empirical Evidence," Bulletin of Economic Research, Wiley Blackwell, vol. 64(4), pages 549-564, October.
    14. Christian Bjørnskov & Pierre-Guillaume Méon, 2013. "Is trust the missing root of institutions, education, and development?," Post-Print CEB, ULB -- Universite Libre de Bruxelles, vol. 157(3-4), pages 641-669, December.
    15. Ilkhom SHARIPOV, 2016. "ECONOMIC GROWTH IN THE EU’S EaP COUNTRIES: DETERMINANTS AND PROSPECTS," EURINT, Centre for European Studies, Alexandru Ioan Cuza University, vol. 3, pages 169-187.
    16. Arvanitidis, Paschalis & Petrakos, George & Pavleas, Sotiris, 2007. "Determinants of economic growth: the experts’ view," Papers DYNREG20, Economic and Social Research Institute (ESRI).
    17. Rania S. Miniesy & Mariam AbdelKarim, 2021. "Generalized Trust and Economic Growth: The Nexus in MENA Countries," Economies, MDPI, vol. 9(1), pages 1-22, March.
    18. Sheremeta, Roman & Smith, Vernon, 2017. "The Impact of the Reformation on the Economic Development of Western Europe," MPRA Paper 87220, University Library of Munich, Germany.
    19. Brückner, Markus, 2010. "Natural resource dependence, non-tradables, and economic growth," Journal of Comparative Economics, Elsevier, vol. 38(4), pages 461-471, December.
    20. Arbia, Giuseppe & Battisti, Michele & Di Vaio, Gianfranco, 2010. "Institutions and geography: Empirical test of spatial growth models for European regions," Economic Modelling, Elsevier, vol. 27(1), pages 12-21, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ete:ceswps:ces0001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: library EBIB (email available below). General contact details of provider: https://feb.kuleuven.be/Economics/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.