Regulation and Distrust

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Regulation and Distrust

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Title: Regulation and Distrust
Author: Aghion, Philippe; Algan, Yann; Cahuc, Pierre; Shleifer, Andrei

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Citation: Aghion, Philippe, Yann Algan, Pierre Cahuc, and Andrei Shleifer. 2010. “ Regulation and Distrust.” Quarterly Journal of Economics 125 (3) (August): 1015–1049.
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Abstract: We document that, in a cross section of countries, government regulation is strongly negatively correlated with measures of trust. In a simple model explaining this correlation, distrust creates public demand for regulation, whereas regulation in turn discourages formation of trust, leading to multiple equilibria. A key implication of the model is that individuals in low-trust countries want more government intervention even though they know the government is corrupt. We test this and other implications of the model using country- and individual-level data on trust and beliefs about the role of government, as well as on changes in beliefs during the transition from socialism.
Published Version: doi:10.1162/qjec.2010.125.3.1015
Terms of Use: This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at
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