Re-evaluating the individual level causes of trust: a panel data analysis (original) (raw)
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Trust and trustworthiness are important components of social capital and much attention has been devoted to the problems of their correct evaluation. Attitudinal survey questions as reported in the EVS -European Value Survey -are often regarded as inefficient indicators of trust, since they lack of behavioural underpinnings (Putnam, 1995) which one might desire when measuring trust.
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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.
Social Science Research Network, 2011
we can safely argue that these direct and indirect (via increased bridging social capital and trust) effects of increases in labor market participation will add up to each other in case the percentage of employed people increases. What remains on our research agenda is to pursue a more macro-oriented empirical analysis aimed at assessing, to which extent bridging and bonding social capital should be considered parts of "social infrastructure", or more generally-socioeconomic institutions-driving crosscountry differences in productivity. We think that international survey data from the WVS might be useful in this respect. Another line of research which ought to be done is to use panel data to draw more precise conclusions on causal links between social capital variables, trust, and economic performance of individuals and countries. Unfortunately, in this respect, we are facing an unsurmountable data availability problem, at least with WVS data. Contents WORKING PAPER No. 94 3 Contents 1 Introduction 3 2 Related literature 6 3 Measurement and preliminary evidence on intra-country and crosscountry differences 10 3.