A Road to Trust
We explore the relationship between transaction costs and generalized trust. Using panel data from 2100 households in 135 poor rural communities of the Philippines, we show that where costs of interactions are reduced there is an increase in generalized trust. These results have implications for the literature on the links between trust and growth. Indeed, rather than being an input to economic growth, trust might be a product of reduced costs of interactions which also favors growth. Specifically, we find that the individuals most likely to engage in exchange exhibit an increase in trust after road construction.
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| Main Authors: | , |
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| Format: | Journal Article biblioteca |
| Language: | EN |
| Published: |
2010
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| Subjects: | Organizational Behavior, Transaction Costs, Property Rights D230, Microeconomic Analyses of Economic Development O120, Formal and Informal Sectors, Shadow Economy, Institutional Arrangements O170, Economic Development: Regional, Urban, and Rural Analyses, Transportation O180, Transportation Systems: Government and Private Investment Analysis, Road Maintenance, Transportation Planning R420, Economic Sociology, Economic Anthropology, Social and Economic Stratification Z130, |
| Online Access: | http://hdl.handle.net/10986/4653 |
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| Summary: | We explore the relationship between transaction costs and generalized trust. Using panel data from 2100 households in 135 poor rural communities of the Philippines, we show that where costs of interactions are reduced there is an increase in generalized trust. These results have implications for the literature on the links between trust and growth. Indeed, rather than being an input to economic growth, trust might be a product of reduced costs of interactions which also favors growth. Specifically, we find that the individuals most likely to engage in exchange exhibit an increase in trust after road construction. |
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