TRUST, REGULATION, AND MARKET FAILURES

• 成果类型: Article
• 署名作者: Pinotti, Paolo
• 署名单位: Bocconi University
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/REST_a_00209
• 发表日期: 2012-08
• 页码: 650-658
• 关键词: institutions; entry; COOPERATION; culture

摘要

Government regulation of firms is associated with more negative externalities and unofficial activity across countries. I argue that this correlation mainly reflects causality going from concerns about market failures to demand for government intervention. Using trust in others as a proxy for such concerns, I show that differences in trust explain a great deal of variation in entry regulations. Then, controlling for trust in the regression of market failures on regulation, the latter is no longer associated with worse economic outcomes. The same result is confirmed when I exploit country population as an alternative source of variation in regulation.