Scandinavian Working Papers in Economics

EIJS Working Paper Series,
Stockholm School of Economics, The European Institute of Japanese Studies

No 216: WHO DO YOU TRUST? ETHNICITY AND TRUST IN BOSNIA AND HERZEGOVINA

Peter Håkansson and Fredrik Sjöholm ()
Additional contact information
Peter Håkansson: European Institute of Japanese Studies
Fredrik Sjöholm: European Institute of Japanese Studies, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden

Abstract: Bosnia and Herzegovina has experienced a turbulent post-independence transition. It can be argued that the level of trust is likely to have been negatively affected by this turbulence and that it is important to restore trust to achieve sustainable political and economic development. This paper looks at trust in Bosnia and Herzegovina and puts a special focus on the role of ethnicity. We find generalized trust to be low in Bosnia and Herzegovina and it seems to have declined in recent years. Moreover, generalized trust is negatively affected by the degree of ethnic heterogeneity in the region. However, a further and more detailed examination of trust reveals a more complex relationship between ethnicity and trust: people tend to show low levels of trust in all other people irrespective of their ethnic belongings. We argue that ethnic distribution might capture some other regional specific characteristics that also affect the level of trust. One possibility is that ethnically heterogeneous regions tended to be severely affected by the war and that this has negatively affected the level of trust towards all people outside of a person’s family.

Keywords: Trust; Social Capital; Ethnicity; Southeast Europe; Bosnia and Herzegovina

JEL-codes: O17; P20; Z13

28 pages, October 6, 2005

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