Does social distrust always lead to a stronger support for government intervention?
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The paper considers ‘trust’ as an empirical determinant of individual support for government intervention. The central notion is that the influence of generalized trust on policy attitudes is conditional on confidence in both state actors and major companies. The starting point is the idea that individuals who generally distrust other persons have a stronger taste for the regulation of economic activities, while people with high interpersonal trust are in favor of less stringent regulatory control. Yet, people who do not trust unknown others also tend to mistrust government and private companies. If mistrust in state actors dominates, we should not necessarily expect stronger interventionist preferences. Estimating the determinants of interventionist attitudes using data from the World Values Survey/European Values Study for approximately 130,000 individuals in forty OECD- and EU-countries, we find evidence that the impact of social trust on government intervention attitudes is conditional on institutional trust. Confidence in major companies appears to have a stronger effect on preference formation than trust in state actors.
KeywordsSocial trust Institutional trust Government regulation Preference formation
JEL ClassificationD70 D78 H10 L50
The research leading to these results has received funding from the European Commission’s Seventh Framework Programme FP7/2007-2013 under Grant agreement no. 290647. The authors thank participants of the Economics Research Colloquiums at Kassel University (Germany, November 2013) and at the University of Münster (Germany, January 2014), as well as session participants at the Australasian Public Choice Society Meeting in Singapore (December 2013), and the Meeting of the European Public Choice Society in Cambridge/UK (April 2014) for helpful comments. We owe special thanks to Christian Bjørnskov, Chris Doucouliagos, Pietro Tommasino, and three anonymous referees for very helpful comments. The usual caveat applies.
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