Is trust the missing root of institutions, education, and development?
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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.
KeywordsDevelopment Social trust Institutions Education
JEL ClassificationO43 O47 O57 Z13
We thank Niclas Berggren, Henrik Harms, participants at a seminar at the Higher School of Economics in Moscow in April 2011, participants at the 2011 European Public Choice Society conference in Rennes, two anonymous referees for numerous comments that improved the paper, and an editor (William Shughart). We kindly beg the reader to blame no one but ourselves for remaining errors.
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