, Volume 157, Issue 3-4, pp 641-669
Date: 09 Feb 2013

Is trust the missing root of institutions, education, and development?

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Abstract

We report evidence that trust is the missing root relating education, institutions, and economic development. We observe that more trust both increases education and improves legal and bureaucratic institutions, which in turn spurs economic development. We substantiate this intuition with a series of regressions that provide evidence that trust determines both education and the quality of institutions, and that education and institutions in turn affect GDP per capita.