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Historical trust levels predict current welfare state size

Bergh, Andreas LU and Bjørnskov, Christian (2011) In Kyklos 64(1). p.1-19
Abstract
Despite the fact that large welfare states are vulnerable to free-riding, the idea that universal welfare states lead to higher trust levels in the population has received some attention and support among political scientists recently. This paper argues that the opposite direction of causality is more plausible, i.e. that populations with higher trust levels are more prone to creating and successfully maintaining universal welfare states with high levels of taxation where publicly financed social insurance schemes.



The hypothesis is tested using instrumental variable techniques to infer variations in trust levels that pre-date current welfare states, and then using the variation in historical trust levels to explain the... (More)
Despite the fact that large welfare states are vulnerable to free-riding, the idea that universal welfare states lead to higher trust levels in the population has received some attention and support among political scientists recently. This paper argues that the opposite direction of causality is more plausible, i.e. that populations with higher trust levels are more prone to creating and successfully maintaining universal welfare states with high levels of taxation where publicly financed social insurance schemes.



The hypothesis is tested using instrumental variable techniques to infer variations in trust levels that pre-date current welfare states, and then using the variation in historical trust levels to explain the current size and design of the welfare state, and finally comparing the explanatory power of trust to other potential explanatory factors such as left-right ideology and economic openness.



To infer variation about historical trust levels, we use three instruments, all used previously in the trust literature: the grammatical rule allowing pronoun-drop, average temperature in the coldest month and a dummy for constitutional monarchies. Using cross-sectional data for 77 countries, we show that these instruments are valid and that countries with higher historical trust levels have significantly higher public expenditure as a share of GDP and also have more regulatory freedom. This finding is robust to controlling for several other potential explanations of welfare state size. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
trust, welfare state
in
Kyklos
volume
64
issue
1
pages
1 - 19
publisher
Wiley-Blackwell
external identifiers
  • wos:000286112300001
  • scopus:78651227111
ISSN
0023-5962
DOI
10.1111/j.1467-6435.2010.00492.x
language
English
LU publication?
yes
id
816521c0-0e13-4d61-aedc-170cc8c77c11 (old id 1858167)
date added to LUP
2011-03-25 09:17:50
date last changed
2017-10-29 03:55:50
@article{816521c0-0e13-4d61-aedc-170cc8c77c11,
  abstract     = {Despite the fact that large welfare states are vulnerable to free-riding, the idea that universal welfare states lead to higher trust levels in the population has received some attention and support among political scientists recently. This paper argues that the opposite direction of causality is more plausible, i.e. that populations with higher trust levels are more prone to creating and successfully maintaining universal welfare states with high levels of taxation where publicly financed social insurance schemes.<br/><br>
<br/><br>
The hypothesis is tested using instrumental variable techniques to infer variations in trust levels that pre-date current welfare states, and then using the variation in historical trust levels to explain the current size and design of the welfare state, and finally comparing the explanatory power of trust to other potential explanatory factors such as left-right ideology and economic openness.<br/><br>
<br/><br>
To infer variation about historical trust levels, we use three instruments, all used previously in the trust literature: the grammatical rule allowing pronoun-drop, average temperature in the coldest month and a dummy for constitutional monarchies. Using cross-sectional data for 77 countries, we show that these instruments are valid and that countries with higher historical trust levels have significantly higher public expenditure as a share of GDP and also have more regulatory freedom. This finding is robust to controlling for several other potential explanations of welfare state size.},
  author       = {Bergh, Andreas and Bjørnskov, Christian},
  issn         = {0023-5962},
  keyword      = {trust,welfare state},
  language     = {eng},
  number       = {1},
  pages        = {1--19},
  publisher    = {Wiley-Blackwell},
  series       = {Kyklos},
  title        = {Historical trust levels predict current welfare state size},
  url          = {http://dx.doi.org/10.1111/j.1467-6435.2010.00492.x},
  volume       = {64},
  year         = {2011},
}