Aghion, Philippe; Algan, Yann; Cahuc, Pierre; Shleifer, … - 2009
In a cross-section of countries, government regulation is strongly negatively correlated with social capital. We … document this correlation, and present a model explaining it. In the model, distrust creates public demand for regulation …, while regulation in turn discourages social capital accumulation, leading to multiple equilibria. A key implication of the …
