Public Choice

, Volume 144, Issue 1–2, pp 323–346 | Cite as

How does social trust lead to better governance? An attempt to separate electoral and bureaucratic mechanisms

Article

Abstract

This paper explores questions related to the association between social trust and governance. In particular, the paper explores whether the trust-governance association is mainly a reflection of political responsiveness to the demands of the electorate or of the supply of honest politicians and bureaucrats. After outlining some simple theory, the findings suggest that the association reflects a causal influence of both types of trust on institutions of economic-judicial governance while electoral institutions are not associated with social trust. Assessed at the sample mean, the value of social trust under high political competition as evaluated by the compensating income variation is substantial.

Keywords

Trust Governance Transmission mechanisms 

JEL Classification

O17 P16 Z13 

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Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Department of Economics, Aarhus School of BusinessAarhus UniversityÅbyhøjDenmark

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