The State and Trust

Abstract

This article explores the effects of the state on the creation of social trust. It identifies four theories connecting these two variables. The first and probably most important one stresses the role of the state as a third-party punisher of free-riders, especially in large societies where people have continuous interactions with strangers. The second claims that citizens extrapolate state officers’ corruption levels to ordinary citizens’ trustworthiness. The third claims that the state promotes trust by increasing income equality, and the final one claims that the state fosters trust by providing information about types of people. Finally, the article discusses how the empirical models relating to the state and trust deal with endogeneity problems, how outcomes from experimental analyses question the results obtained from observational data, and how this work affects our ideas about what trust ultimately refers to.