We present new evidence on how generalized trust is formed. Unlike previous studies, we look at the explanatory power of economic institutions, we use newer data, we incorporate more countries, and we use instrumental variables in an attempt to handle the causality problem. A central result is that legal structure and security of property rights (area 2 of the Economic Freedom Index) increase trust. The idea is that a market economy, building on voluntary transactions and interactions with both friends and strangers within the predictability provided by the rule of law, entails both incentives and mechanisms for trust to emerge between people.
Recent research has documented that competent-looking political candidates do better in U.S. elections and that babyfaced individuals are generally perceived to be less competent than maturefaced individuals. Taken together, this suggests that babyfaced political candidates are perceived as less competent and therefore fare worse in elections. We test this hypothesis, making use of photograph-based judgments by 2,772 respondents of the facial appearance of 1,785 Finnish political candidates. Our results confirm that babyfacedness is negatively related to inferred competence in politics. Despite this, babyfacedness is either unrelated or positively related to electoral success, depending on the sample of candidates.JEL Classification: D72, J45, J7.
We conduct an extensive robustness analysis of the relationship between trust and growth by investigating a later time period and a bigger sample than in previous studies. In addition to robustness tests that focus on model uncertainty, we systematize the investigation of outlier influence on the results by using the robust estimation technique Least Trimmed Squares. We find that when outliers (especially China) are removed, the trust-growth relationship is no longer robust. On average, the trust coefficient is half as large as in previous findings.
Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract. Tolerance -respecting those who are different -is arguably of particular importance in an era of globalization, where a potential for economic, social and personal development is increasingly a function of interaction with others different from oneself. We investigate whether globalization induces parents to want to instill tolerance in their children, the main idea being that this would equip the latter for greater success in a more integrated world. We indeed find, using a willingness-to-teach-kids-tolerance measure, that globalization enhances the willingness to transmit such social values. More precisely, economic and social, but not political, globalization has this effect, as shown by using the KOF Index of Globalization in cross-sectional and panel-data regression analyses of up to 66 countries. Addressing potential endogeneity concerns using an instrumental variables approach moreover suggests these relationships to be causal. Overall, our results confirm that certain kinds of globalization seem able to shape values in ways considered desirable by many.
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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte.
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AbstractWhile studies of the relationship between economic freedom and economic growth have shown it to be positive, significant and robust, it has rightly been argued that different areas of economic freedom may have quite different effects on growth. Along that line, Carlsson and Lundström (2002) present the surprising result that "International exchange: Freedom to trade with foreigners" is detrimental for growth. We find that "Taxes on international trade" seems to drive this result. However, using newer data and a more extensive sensitivity analysis, we find that it is not robust. Least Trimmed Squares-based estimation in fact renders the coefficient positive. JEL-Classification: E61, F13, F43, O24, O40, P17
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