Regulation and Distrust<sup>*</sup>

Aghion, Philippe; Algan, Yann; Cahuc, Pierre; Shleifer, Andrei

doi:10.1162/qjec.2010.125.3.1015

Cited by 653 publications

(241 citation statements)

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“…The importance of luck and the persistent effects of negative shocks link our contribution to Acemoglu and Zilibotti (1997). Also related to our research are the recent papers by Aghion et al (2010Aghion et al ( , 2011 focusing on the relation between public policy, on the one hand, and beliefs and norms of cooperation in the labour market, on the other hand.…”

Section: Related Literaturementioning

confidence: 81%

War Signals: A Theory of Trade, Trust and Conflict

2011

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We construct a theory of persistent civil conflicts, where persistence is driven by the endogenous dynamics of inter-ethnic trust and trade. In times of peace, agents belonging to two groups are randomly matched to trade bilaterally. Trade hinges on trust and cooperation. The onset of conflict signals that the aggressor has a low propensity to cooperate, harming future trust and trade. Agents observe the history of conflicts and update their beliefs over time. The theory predicts that civil wars are persistent. Moreover, even accidental conflicts that do not reflect economic fundamentals erode trust, and can plunge a society into a vicious cycle of recurrent conflicts (a war trap). The incidence of conflict can be reduced by policies abating cultural barriers, fostering inter-ethnic trade and human capital, and shifting beliefs. Coercive peace policies, such as peacekeeping forces or externally imposed regime changes, have no enduring effects.

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Section: Related Literaturementioning

confidence: 81%

War Signals: A Theory of Trade, Trust and Conflict

2011

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“…Unfortunately, it is impossible to rule out the possibility of the endogenity problem due to the lack of a valid instrumental variable. As in other papers (Aghion et al, 2010;Denisova et al, 2009;Dimitrova-Grajzl et al, 2012;Grosjean, 2011;Grosjean et al, 2013;Grosjean & Senik, 2011) that use this data set, we do our best to mitigate the endogenetiy problem without being able to use a valid instrumental variable. Therefore, we must state that our results should be taken with caution.…”

Section: Findings and Discussionmentioning

confidence: 92%

“…2 This survey has been previously used by Denisova, Ellier, Frye, and Zhuravskaya (2009), Aghion et al (2010), Grosjean and Senik (2011), Grosjean (2011), DimitrovaGrajzl, Grazjl, and Guse (2012 and Grosjean, Ricka, and Senik (2013).…”

Section: Samplementioning

confidence: 99%

“…Fukuyama (1995) argues that trust is one of the fundamental causes of large differences in economic prosperity levels between countries. Following the footsteps of Putnam (1993) and Fukuyama (1995), the empirical literature shows that trust is positively related to economic growth (Algan & Cahuc, 2010;Hovarht, 2013;Knack & Keefer, 1997;Knack & Zak, 2001), financial development (Guiso, Sapienza, & Zingales, 2004, the existence of a welfare state (Bergh & Bjørnskov, 2011) a lighter regulatory burden (Aghion, Algan, Chauc, & Shleifer, 2010;Pinotti, 2012), and increased institutional development (Bjørnskov, 2009;Knack, 2002;La Porta, Lopez-de-Silanes, Shleifer, & Vishny, 1997;Tabellini, 2008;). Recent empirical results also suggest that trust has a positive effect on education (Bjørnskov, 2009;Bjørnskov & Meon, 2013;Dearmon & Grier, 2011;Papagapitos & Riley, 2009).…”

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confidence: 99%

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In Public Education Expenditures We Trust: Does Trust Increase Support for Public Education Expenditures?

Gur

BOYACI

Ozcan

2015

EDUC SCI-THEOR PRACT

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Trust is one crucial prerequisite for the welfare state. However, very few empirical studies exist that help us understand the mechanisms through which trust affects the welfare state. Influencing public support for developing friendly public policies might be one of these mechanisms. In this study, we use unique micro data from 34 countries to investigate the relationship between trust and support for public education expenditures. We use the Life in Transition Survey (LiTS) conducted by the European Bank for Reconstruction and Development (EBRD) and the World Bank in 2010. Our empirical results show that trust has a positive effect on support for public education expenditures. Our results are robust when controlled for various individual characteristics and country fixed effects, tested using OLS and Probit models and different samples. This empirical evidence helps us understand the micro foundations of support for public education expenditures.

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“…6 Trust is associated with beneficial economic outcomes, because distrust (like opaqueness) causes frictions and transaction costs. For instance, Aghion et al (2010) show that distrust creates demand for high levels of government intervention in the economy, even when such intervention is corrupt and ineffective; high levels of intervention, in turn, discourages the formation of trust. Thus, they demonstrate that beliefs (trust) and institutions (regulation) co-evolve.…”

Section: Similarly Transparency Of Mnes About Issues and Activities mentioning

confidence: 99%

The Multi-Faceted Concept of Transparency

Forssbæck

Oxelheim

2014

SSRN Journal

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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. Terms of use: Documents in AbstractTransparency has become a catchword and in the economic-political debate is often seen as a universal remedy for all sorts of problems.In this paper, we analyze and discuss the meaning and use of the concept of transparency in economic research. We look for common denominators across different areas where the concept is used, and find that transparency in essence is about reductions in information asymmetries, and therefore entails the transfer of information from a sender to a receiver. Transparency goes beyond mere information disclosure in that it has a demand-side dimension: the information transferred should be trustworthy and have a value to the receiver. We emphasize the distinction between ex ante transparency -related to predictability -and ex post transparency -related to accountability. In economics, increased transparency is mostly rationalized on grounds of improving efficiency, but sometimes transparency is properly viewed simply as a right to know. Complementarities between different types of transparency are pervasive, and its causes and effects typically co-determined -i.e. transparency is endogenous. As a means to improve competitiveness and economic growth, transparency of economic policy and corporate as well as institutional transparency interact. We challenge the view that more transparency is always better and argue for concave net benefits and the existence of optimal transparency, but optimality varies across policy areas, institutional settings, industries and individual firms.

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Regulation and Distrust^*

Cited by 653 publications

References 44 publications

War Signals: A Theory of Trade, Trust and Conflict

War Signals: A Theory of Trade, Trust and Conflict

In Public Education Expenditures We Trust: Does Trust Increase Support for Public Education Expenditures?

The Multi-Faceted Concept of Transparency

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Regulation and Distrust*

Cited by 653 publications

References 44 publications

War Signals: A Theory of Trade, Trust and Conflict

War Signals: A Theory of Trade, Trust and Conflict

In Public Education Expenditures We Trust: Does Trust Increase Support for Public Education Expenditures?

The Multi-Faceted Concept of Transparency

Contact Info

Product

Resources

About

Regulation and Distrust^*