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date: 21 April 2019

Abstract and Keywords

This chapter provides a selective survey of the literature on social trust in public choice and political economy. It outlines the empirical evidence and discusses theoretical channels through which social trust can affect the quality of institutions and policies, and the conditions under which such mechanisms are likely to work. It also addresses the discussion of reverse causality, that is, whether good institutions or policies actively create trust. It then discusses whether trust can be created or destroyed by activist government policy or accidental institutional changes. Its main focus is on the set of theories and evidence of the association between social trust and institutions of governance.

Keywords: trust, public choice, political economy, formal institutions, informal institutions

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