Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/24749
Authors: 
Heinemann, Friedrich
Tanz, Benjamin
Year of Publication: 
2008
Series/Report no.: 
ZEW Discussion Papers 08-053
Abstract: 
In a constantly changing economic environment a country's ability to undertake institutional reforms is crucial to maintain economic growth and to promote the welfare of its citizens. A wide range of determinants for institutional reforms have been identified. However, the impact of trust on reforms has so far never been addressed. We provide theoretical arguments why trust should influence institutional changes and test the relationship empirically. We find a significant positive relation between trust and reforms with regard to government size, the legal system, and deregulation of private businesses and the labor market. The results in other policy fields are ambiguous.
Subjects: 
Trust
Economic Freedom
Policy Reforms
JEL: 
E60
H11
Document Type: 
Working Paper

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