Both institutional quality and institutional stability have been argued to stimulate economic growth. But to improve institutional quality, a country must endure a period of institutional change, which implies at least a little and possibly a lot of institutional instability. We investigate the...

We look at the effect of religiosity on social trust, defined as the share of a population that thinks that people in general can be trusted. This is important since social trust is related to many desired outcomes, such as growth, education, democratic stability and subjective well-being. The...

During the last 15 years, the social capital literature has grown rapidly. In particular after Robert Putnam’s (1993) study of regional governments in Italy, the interest among economists and politologists exploded as Putnam showed that the concept could be used in quantitative explanations of...

Using cross-sectional data for 76 countries, we apply instrumental variable techniques based on pronoun drop, temperature and monarchies to demonstrate that historical trust levels predict several indicators of current welfare state design, including universalism and high levels of regulatory...

In the paper, we argue that trust is the missing link relating education, institutions, and economic development. We argue that increased trust both increases education and improves legal and bureaucratic institutions, which in turn spurs economic development. We substantiate this intuition with...

Martin Paldam is one of the most prominent figures of Danish economics and European public choice. In this introduction to the special issue, we identify five of the areas, where he has made significant contributions: (1) vote and popularity functions and political business cycles; (2)...

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...

Most modern welfare states offer an extensive array of services and benefits that are wholly or partly financed by tax revenue. One missing link in explaining the long-run sustainability of such comprehensive welfare states could be the already-existing stock of trust. Indeed, our cross-country...

A common argument in the trust literature is that high-trust cultures allow efficient commercial contracts to be shorter, covering fewer contingencies. We take this idea to the topic of social contracts. Specifically, we ask whether social trust affects the length and detail of constitutions....

We investigate empirically how party ideology influences size and scope of government as measured by the size of government, tax structure and labor market regulation. Our dataset comprises 49 US states over the 1993–2009 period. We employ the new data on the ideological mapping of US...