ReLunch Seminar: Andrea Martinangeli (Max Planck Institute for Tax Law and Public Finance, Munich)

Online through Zoom
Fill in this form to receive the invitations to the ReLunch seminars.

Abstract
Social trust is a crucial ingredient for successful collective action. What causes social trust to develop, however, remains poorly understood. The quality of political institutions has been proposed as a candidate driver and has been shown to correlate with social trust. We show that this relationship is causal. We begin by documenting a positive correlation between quality of institutions, measured by embezzlement, and social trust using survey data. We then take the investigation to the laboratory: We first exogenously expose subjects to different levels of institutional quality in an environment mimicking public administration embezzlement. We then measure social trust among the participants using a trust game. Coherent with our survey evidence, individuals exposed to low institutional quality trust significantly less.