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Trust and growth

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Using data from U.S. states, we find a positive relationship between trust and growth. According to our results, a 10 percentage point increase in trust increases the growth rate of GDP by 0.5 percentage points and the growth rate of manufacturing employment by 1.3 percentage points over a five-year period. Our results are robust to the endogeneity between trust and growth.

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Correspondence to Oguzhan C. Dincer.

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Dincer, O.C., Uslaner, E.M. Trust and growth. Public Choice 142, 59–67 (2010).

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