Ratio Working Papers
No 144:
Historical Trust Levels Predict Current Welfare State Design
Andreas Bergh ()
and Christian Bjørnskov ()
Abstract: 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 freedom. We argue that high levels of trust and
trustworthiness are necessary, but not sufficient, conditions for societies
to develop successful universal welfare states that would otherwise be
highly vulnerable to free riding and fraudulent behavior. Our results do
not exclude positive feedback from welfare state universalism to individual
trust, although we claim that the important causal link runs from
historically trust levels to current welfare state design.
Keywords: Social trust; Welfare State; (follow links to similar papers)
JEL-Codes: Z13; (follow links to similar papers)
28 pages, October 29, 2009
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