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Individual-Level Evidence on the Causal Relationship Between Social Trust and Institutional Trust

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Abstract

The study accounts for the presence of endogeneity in the interdependence between social and institutional trust. Using Greece as a case study we provide valuable insights regarding the bidirectional nature of this relationship and its sign. Consequently, more accurate results might be provided regarding the determinants of both types of trust and the way in which these may be discerned in a given society. We use microdata extracted from the European Values Surveys (2002–2010) and instrumental variables techniques. Social trust is constructed as a three-item scale variable comprising generalized trust, fairness and helpfulness. The institutional trust variable is constructed as the sum of seven variables referring to trust in political institutions, civil security institutions and, supranational political institutions. In line with the hypothesis formed here, the results indicate the presence of endogeneity in the social and institutional trust interrelationship. When accounted for, this endogeneity entails different results as regards the sign of the effect that institutional trust exerts upon social trust, which turns from positive to negative. The study contributes to the limited empirical knowledge regarding the micro level two-way causal relationship between social trust and institutional trust. The study’s findings provides us with a more informative and accurate picture of the underlying dynamics of building trust in a society. Important research and policy level issues draw from these findings.

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Acknowledgements

I am indebted to three anonymous Journal reviewers for their constructive and insightful comments that much benefited my work. The usual disclaimer applies.

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  1. Department of Economics, University of Peloponnese, Thesi Sechi (Proin 4o Pedio Volis), Tripoli, 22100, Greece

    Irene Daskalopoulou

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Daskalopoulou, I. Individual-Level Evidence on the Causal Relationship Between Social Trust and Institutional Trust. Soc Indic Res 144, 275–298 (2019). https://doi.org/10.1007/s11205-018-2035-8

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