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

  • Christian Bjørnskov


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.


Trust Governance Transmission mechanisms 

JEL Classification

O17 P16 Z13 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Acemoglu, D., & Johnson, S. (2005). Unbundling institutions. Journal of Political Economy, 113, 949–995. CrossRefGoogle Scholar
  2. Acemoglu, D., & Robinson, J. A. (2006). Economic backwardness in political perspectives. American Political Science Review, 100, 115–131. CrossRefGoogle Scholar
  3. Aghion, P., Alesina, A., & Trebbi, F. (2004). Endogenous political institutions. Quarterly Journal of Economics, 119, 565–611. CrossRefGoogle Scholar
  4. Aidt, T. (2003). Economic analysis of corruption: a survey. The Economic Journal, 113, F632–F652. CrossRefGoogle Scholar
  5. Arrow, K. (1972). Gifts and exchanges. Philosophy and Public Affairs, 1, 343–367, p. 357. Google Scholar
  6. Bardhan, P. (2005). Institutions matter, but which ones? Economics of Transition, 13, 499–532. CrossRefGoogle Scholar
  7. Beck, T., Clarke, G., Groff, A., Keefer, P., & Walsh, P. (2001). New tools in comparative political economy: the database of political institutions. World Bank Economic Review, 15, 165–176. CrossRefGoogle Scholar
  8. Berggren, N., & Jordahl, H. (2006). Free to trust? Economic freedom and social capital. Kyklos, 59, 141–169. CrossRefGoogle Scholar
  9. Beugelsdijk, S. (2006). A note on the theory and measurement of trust in explaining differences in economic growth. Cambridge Journal of Economics, 30, 371–387. CrossRefGoogle Scholar
  10. Bjørnskov, C. (2006). The multiple facets of social capital. European Journal of Political Economy, 22, 22–40. CrossRefGoogle Scholar
  11. Bjørnskov, C. (2007a). Determinants of generalized trust: a cross-country comparison. Public Choice, 130, 1–21. CrossRefGoogle Scholar
  12. Bjørnskov, C. (2007b). On the determinants of social trust in the United States. Paper presented at the 2007 meeting of the Midwest Political Science Association in Chicago, 12–15 April 2007. Google Scholar
  13. Bjørnskov, C., Dreher, A., & Fischer, J. A. V. (2008). Formal institutions and subjective wellbeing: revisiting the cross-country evidence. KOF working paper 192, ETH Zürich. Google Scholar
  14. Boix, C., & Posner, D. N. (1998). Social capital: explaining its origins and effects on government performance. British Journal of Political Science, 28, 686–695. CrossRefGoogle Scholar
  15. Brambor, T., Clark, W. R., & Golder, M. (2006). Understanding interaction models: improving empirical analyses. Political Analysis, 14, 63–82. CrossRefGoogle Scholar
  16. Casey, T. (2004). Social capital and regional economies in Britain. Political Studies, 52, 96–117. CrossRefGoogle Scholar
  17. CIA (2006). World factbook 2006. Langley: Central Intelligence Agency. Google Scholar
  18. Coate, S., & Morris, S. (1995). On the form of transfers in special interests. Journal of Political Economy, 103, 1210–1235. CrossRefGoogle Scholar
  19. Delhey, J., & Newton, K. (2005). Predicting cross-national levels of social trust: global pattern or Nordic exceptionalism? European Sociological Review, 21, 311–327. CrossRefGoogle Scholar
  20. de Toqueville, A. (2000). Democracy in America. Indianapolis: Hackett (1st ed. 1840). Google Scholar
  21. Freedom House (2006). Freedom in the world 2006. The annual survey of political rights and civil liberties. Lanham: Rowman and Littlefield. Google Scholar
  22. Glaeser, E. L., & Shleifer, A. (2002). Legal origins. Quarterly Journal of Economics, 117, 1193–1230. CrossRefGoogle Scholar
  23. Gwartney, J., & Lawson, R. (2007). Economic freedom of the world 2007 annual report. Vancouver: Fraser Institute. Google Scholar
  24. Hall, P. (1999). Social capital in Britain. British Journal of Political Science, 29, 417–461. CrossRefGoogle Scholar
  25. Hall, R. E., & Jones, C. I. (1999). Why do some countries produce so much more output per worker than others? Quarterly Journal of Economics, 114, 83–116. CrossRefGoogle Scholar
  26. Heinemann, F., & Tanz, B. (2008). Trust and reforms. Journal of Economic Policy Reform, 11, 173–185. CrossRefGoogle Scholar
  27. Helliwell, J. F., & Putnam, R. (1995). Economic growth and social capital in Italy. Eastern Economic Journal, 221, 295–307. Google Scholar
  28. Heston, A., Summers, R., & Aten, B. (2002). Penn world tables, version 6.1. Center for International Comparisons (CICUP), University of Pennsylvania. Google Scholar
  29. Hobolt, S. B., & Klemmensen, R. (2005). Responsive government? Public opinion and government public preferences in Britain and Denmark. Political Studies, 53, 379–402. CrossRefGoogle Scholar
  30. Inglehart, R., Basañez, M., Díez-Medrano, J., Halman, L., & Luijkx, R. (2004). Human beliefs and values. Ann Arbor: University of Michigan Press. Google Scholar
  31. Kashima, E. S., & Kashima, Y. (1998). Culture and language: the case of cultural dimensions and personal pronoun use. Journal of Cross-Cultural Psychology, 29, 461–486. CrossRefGoogle Scholar
  32. Kaufmann, D., Kraay, A., & Mastruzzi, M. (2003). Governance matters III: governance indicators for 1996–2002. World Bank policy research working paper 3106. Google Scholar
  33. Keefer, P. (2004). A review of the political economy of governance: from property rights to voice. World Bank policy research working paper 3315. Google Scholar
  34. Knack, S. (1992). Civic norms, social sanctions, and voter turnout. Rationality and Society, 4, 133–156. CrossRefGoogle Scholar
  35. Knack, S. (2001). Trust, associational life and economic performance. In J. F. Helliwell (Ed.), The contribution of human and social capital to sustained economic growth and well-being. Quebec: Human Resources Development Canada. Google Scholar
  36. Knack, S. (2002). Social capital and the quality of government: evidence from the States. American Journal of Political Science, 46, 772–785. CrossRefGoogle Scholar
  37. Knack, S., & Keefer, P. (1997). Does social capital have an economic pay-off? Quarterly Journal of Economics, 112, 1251–1288. CrossRefGoogle Scholar
  38. Lambsdorff, J. G. (1997). How corruption affects productivity. Kyklos, 56, 457–474. CrossRefGoogle Scholar
  39. la Porta, R., Lopez-de-Silanes, F., Schleifer, A., & Vishny, R. W. (1997). Trust in large organizations. American Economics Review, 87, 333–338. Google Scholar
  40. Letki, N., & Evans, G. (2005). Endogenizing social trust: democratization in East-Central Europe. British Journal of Political Science, 35, 515–529. CrossRefGoogle Scholar
  41. Marshall, M., & Jaggers, K. (2002). Polity IV dataset. University of Maryland, Center for International Development and Conflict Management. Google Scholar
  42. Mauro, P. (1995). Corruption and growth. Quarterly Journal of Economics, 110, 681–712. CrossRefGoogle Scholar
  43. McCloskey, D. N. (1985). The loss function has been mislaid: the rhetoric of significance tests. American Economic Review, 75, 201–205. Google Scholar
  44. Mo, P. H. (2001). Corruption and economic growth. Journal of Comparative Economics, 29, 66–79. CrossRefGoogle Scholar
  45. Munck, G. L., & Verkuilen, J. (2002). Conceptualizing and measuring democracy: evaluating alternative ideas. Comparative Political Studies, 35, 5–34. Google Scholar
  46. Naipaul, V. S. (1981). The return of Eva Peron. New York: Vintage. Google Scholar
  47. Nannestad, P. (2008). New work on trust: what have we learnt, if anything? Annual Review of Political Science, 11, 413–436. CrossRefGoogle Scholar
  48. Paxton, P. (1999). Is social capital declining in the United States? A multiple indicator assessment. American Journal of Sociology, 105, 88–127. CrossRefGoogle Scholar
  49. Putnam, R. (1993). Making democracy work. Civic traditions in modern Italy. Princeton: Princeton University Press. Google Scholar
  50. Putnam, R. (2000). Bowling alone. The collapse and revival of American Community. New York: Simon & Schuster. Google Scholar
  51. Putnam, R. (2001). Social capital: measurement and consequences. Canadian Journal of Policy Research, 2, 41–51. Google Scholar
  52. Rodrik, D., Sumbramanian, A., & Trebbi, F. (2004). Institutions rule: the primacy of institutions over geography and integration in economic development. Journal of Economic Growth, 9, 131–165. CrossRefGoogle Scholar
  53. Sapienza, P., Toldra, A., & Zingales, L. (2007). Understanding trust. NBER working paper no. 13387. Google Scholar
  54. Shah, A. (2008). Worldwide governance indicators: tools for good governance or misinformation. Mimeo, the World Bank. Google Scholar
  55. Simpson, B., & Eriksson, K. (2009). The dynamics of contracts and generalized trustworthiness. Rationality and Society, 21, 59–80. CrossRefGoogle Scholar
  56. Tabellini, G. (2008). The scope of cooperation: values and incentives. Quarterly Journal of Economics, 123, 905–950. CrossRefGoogle Scholar
  57. Uslaner, E. M. (1999). Democracy and social capital. In M. Warren (Ed.), Democracy and trust. Cambridge: Cambridge University Press. Google Scholar
  58. Uslaner, E. M. (2000). Producing and consuming trust. Political Science Quarterly, 115, 569–590. CrossRefGoogle Scholar
  59. Uslaner, E. M. (2002). The moral foundations of trust. Cambridge: Cambridge University Press. CrossRefGoogle Scholar
  60. Uslaner, E. M. (2004). Trust and corruption. In J. Lambsdorff, M. Taube, & M. Schramm (Eds.), The new institutional economics of corruption London: Routledge. Google Scholar
  61. Uslaner, E. M. (2008). Where you stand depends on where your grandparents sat: the inheritability of generalized trust. Public Opinion Quarterly, 72, 725–740. CrossRefGoogle Scholar
  62. Vanhanen, T. (1999). A new dataset for measuring democracy, 1810–1998. Journal of Peace Research, 37, 251–265. CrossRefGoogle Scholar
  63. Weber, M. (1921). Economy and society. Berkeley: University of California Press (2nd ed. 1978). Google Scholar
  64. Whiteley, P. (2000). Economic growth and social capital. Political Studies, 48, 443–466. CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

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

Personalised recommendations