Institutional Quality and Generalized Trust: A Nonrecursive Causal Model

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Abstract

This paper investigates the association between institutional quality and generalized trust. Despite the importance of the topic, little quantitative empirical evidence exists to support either unidirectional or bidirectional causality for the reason that cross-sectional studies rarely model the reciprocal relationship between institutional quality and generalized trust. Using data from the World Values Survey, World Bank, and other data sources in an identified nonrecursive structural equation model, results show that generalized trust and institutional quality form a positive reciprocal relationship, where the connection is stronger from generalized trust to institutional quality. The conclusion discusses implications for theory and policy in this area.

Original languageEnglish (US)
Pages (from-to)235-258
Number of pages24
JournalSocial Indicators Research
Volume107
Issue number2
DOIs
StatePublished - Jun 2012

Keywords

  • Endogeneity bias
  • Feedback effect
  • Generalized trust
  • Institutional quality
  • Structural equation model

ASJC Scopus subject areas

  • Developmental and Educational Psychology
  • Arts and Humanities (miscellaneous)
  • Sociology and Political Science
  • Social Sciences(all)

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