اعتماد و انباشت سرمایه فیزیکی و انسانی

Recent empirical work has shown that trust plays an important role in economic development. In this paper, we delve deeper into the mechanism behind that relationship. Specifically, we investigate the effect of trust on human and physical capital while controlling for the fact that the two types of capital are simultaneously determined. In a sample of 50 countries from 1976 to 2005, we show that trust has a positive and significant effect on human capital and a non-linear effect on physical capital. Increasing trust in a low-trust country has a greater impact on the accumulation of physical capital than an identical increase in trust in a high-trust country. We go on to investigate the interaction between institutions and trust and find that institutional reform is less effective at promoting investment in countries with high levels of trust.

There is a growing consensus among economists that trust plays an important role in economic development. Both cross sectional and panel research have verified that countries with higher levels of trust also have higher per-capita incomes on average. This begs the question as to how trust actually promotes economic growth. Rather than focusing directly on the relationship of trust and economic growth, as much of the prior research has done, we dig deeper by investigating trust's role in the accumulation of human and physical capital. We estimate an econometric model of the determination of human and physical capital, allowing for simultaneous spillovers between the two. Our results indicate that the two types of capital are indeed simultaneously determined, and that trust is significantly related to the accumulation of both types of capital. We go on to show that while trust has a direct and positive impact on human capital, trust's effect on physical capital investment is non-linear. The relationship between trust and physical capital is characterized by diminishing marginal returns, which implies that increasing trust in a low-trust country will have a greater impact than an identical increase in trust for a high-trust country. We also find an interesting interaction effect between trust and institutions, whereby the effectiveness of institutional reform at promoting investment depends on a country's overall level of trust. Besides our key findings about trust, we also discover some other interesting results about the determinants of human and physical capital in our sample. We show that government spending and political instability negatively affect physical capital, while lagged real GDP growth and openness increase physical capital investment. Ethnic diversity is negatively associated with human capital, while dummy variables representing Protestantism and Catholicism are both positive and significant in the human capital equation. The joint endogeneity of human and physical capital means that the variables that are included in the physical (human) capital equation also indirectly affect human (physical) capital. We calculate the overall effect of these variables to determine their long-run relationship with capital. Our paper is organized as follows. Section 2 discusses the relationship between trust and human and physical capital. Section 3 outlines our empirical model, discusses the other independent variables in the system and details our identifying assumptions. Section 4 examines the results and analyzes the equilibrium quantitative effects implied by these outcomes. In Section 5, we analyze the robustness of the results by employing a jackknife. We conclude with some closing remarks in Section 6.

In this paper, we explore the channels through which trust affects development by analyzing the relationship between it and human and physical capital. We find that human and physical capital are simultaneously determined, in that increases in one form of capital have a positive and significant effect on the other. We go on to show that trust is significantly related to human and physical capital. As the level of trust increases, its marginal impact on capital decreases, meaning that policies that increase trust would be most helpful in low trust countries. We also studied the interaction between institutions and trust and find that institutional reform is less effective at increasing the level of investment in high-trust countries. In addition to our results on trust, we find that dummy variables representing Protestantism and Catholicism are positively and significantly related to secondary education, while ethno-linguistic diversity is negatively related to education. Consistent with expectations, both political stability and a healthy economic climate are found to increase investment. Further work could investigate how policymakers could construct policies to best increase generalized trust. In particular, new research could build on recent contributions by Dohmen et al., 2008, Danielson and Holm, 2007 and Chaudhuri and Gangadharan, 2007 in identifying the determinants of trust formation. Knowing the key determinants of trust may allow policymakers to create more trust and promote economic development