We present new evidence on the influence of income inequality on generalized trust. Using individual panel data from Swedish counties together with an instrumental variable strategy we find that differences in disposable income, and especially differences among people in the bottom half of the...

We conduct an extensive robustness analysis of the relationship between trust and growth for a later time period (the 1990s) and with a bigger sample (63 countries) than previous studies. In addition to robustness tests that focus on model uncertainty, we use Least Trimmed Squares, a robust...

We present new evidence on how generalized trust is formed. Unlike previous studies, we look at the explanatory power of economic institutions, we use newer data, we incorporate more countries, and we use instrumental variables to handle the causality problem. A central result is that legal...

We validate survey measures of social capital with a new data set that examines whether citizens report a lost wallet to its owner. Using data from more than 17,000 lost wallets across 40 countries, we find that survey measures of social capital - especially questions concerning generalized...

We validate survey measures of social capital with a new behavioral data set that examines whether citizens report a lost wallet to its owner. Using data from more than 17,000 lost wallets across 40 countries, we find that survey measures of social capital - especially questions concerning...

In this paper, we argue that an important function fulfilled by intermediaries is to facilitate trust by enabling social pressure towards the enforcement of informal agreements. To that end, we develop a new model that uses network theory to show that intermediaries who have exclusivity over a...