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The productivity of trust

Research output: Working paperResearch

This paper returns to one of the early questions of the literature on social trust, whether trust affects total factor productivity (TFP). Using both development and growth accounting, we find strong evidence of a causal effect of trust on the level and growth of TFP. Using a three-stage least-squares procedure, we moreover observe that the effect of trust on TFP runs entirely through property-rights institutions and not political institutions. Those findings resist a series of robustness checks.

Original languageEnglish
Place of publicationBruxelles
PublisherUniversité Libre de Bruxelles. Centre Emil Bernheim
Number of pages77
Publication statusPublished - 2010

    Research areas

  • Total factor productivity, Social trust

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