Regulation and Distrust / Philippe Aghion, Yann Algan, Pierre Cahuc, Andrei Shleifer.

Format:

Book

Author/Creator:

Aghion, Philippe.

Contributor:

National Bureau of Economic Research.

Algan, Yann.

Cahuc, Pierre.

Shleifer, Andrei.

Series:

Working Paper Series (National Bureau of Economic Research) no. w14648.

NBER working paper series no. w14648

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2009.

Summary:

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 model is that individuals in low trust countries want more government intervention even though the government is corrupt. We test this and other implications of the model using country- and individual-level data on social capital and beliefs about government's role, as well as on changes in beliefs and in trust during the transition from socialism.

Notes:

Print version record

January 2009.