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Historical Trust Levels Predict Current Welfare State Design

Author

Listed:
  • Bergh, Andreas

    (The Ratio Institute and Lund University)

  • Bjørnskov, Christian

    (Aarhus School of Business, Aarhus University)

Abstract

Using cross-sectional data for 76 countries, we apply instrumental variable techniques based on pronoun drop, temperature and monarchies to demonstrate that historical trust levels predict several indicators of current welfare state design, including universalism and high levels of regulatory freedom. We argue that high levels of trust and trustworthiness are necessary, but not sufficient, conditions for societies to develop successful universal welfare states that would otherwise be highly vulnerable to free riding and fraudulent behavior. Our results do not exclude positive feedback from welfare state universalism to individual trust, although we claim that the important causal link runs from historically trust levels to current welfare state design.

Suggested Citation

  • Bergh, Andreas & Bjørnskov, Christian, 2009. "Historical Trust Levels Predict Current Welfare State Design," Ratio Working Papers 144, The Ratio Institute.
    • Handle: RePEc:hhs:ratioi:0144
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    File URL: http://www.ratio.se/pdf/wp/ab_cb_historical.pdf
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    Citations

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    Cited by:

    1. Oasis Kodila-Tedika & Julius Agbor, 2016. "Does Trust Matter for Entrepreneurship: Evidence from a Cross-Section of Countries," Economies, MDPI, vol. 4(1), pages 1-17, March.
    2. Eiji Yamamura, 2012. "Government Size and Trust," Review of Social Economy, Taylor & Francis Journals, vol. 70(1), pages 31-56, December.
    3. Andreas Bergh & Magnus Henrekson, 2011. "Government Size And Growth: A Survey And Interpretation Of The Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 25(5), pages 872-897, December.
    4. Kelkar, Vijay & Shah, Ajay, 2011. "Indian social democracy: The resource perspective," Working Papers 11/82, National Institute of Public Finance and Policy.
    5. Yamamura, Eiji, 2010. "Public policy, trust and growth: disclosure of government information in Japan," MPRA Paper 27703, University Library of Munich, Germany.

    More about this item

    Keywords

    Social trust; Welfare State;

    JEL classification:

    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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