Handbook of Social Capital
Show Less

Handbook of Social Capital

The Troika of Sociology, Political Science and Economics

Edited by Gert Tingaard Svendsen and Gunnar Lind Haase Svendsen

The Handbook of Social Capital offers an important contribution to the study of bonding and bridging social capital networks, balancing the ‘troika’ of sociology, political science and economics. Eminent contributors, including Nobel Prize winner Elinor Ostrom, explore the different scientific approaches required if international research is to embrace both the bright and the more shadowy aspects of social capital. The Handbook stresses the importance of trust for economies all over the world and contains a strong advocacy for cross-disciplinary work within the social sciences.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 19: Economic Inequality

Henrik Jordahl


1 Henrik Jordahl 19.1 Introduction Inequality is a strong determinant of trust.2 People in unequal societies trust each other to a much smaller extent than people do in more equal communities. Several economic and social mechanisms could explain this relationship. Political factors could also be important; political arguments and decisions are often influenced by notions of distributive justice. People’s aversion to inequality has also been demonstrated in more systematic studies, for example by Fehr and Schmidt (1999). The development of income inequality and trust in the US illustrates the negative relationship. Since about 1975 there has been a significant increase in income inequality (Piketty and Saez, 2003), and as observed by Putnam (2000) trust has declined during the same period. The coincidence of high trust and low income inequality in the Nordic countries provides an alternative illustration. There are good reasons to care about this. A major economic advantage of trust is that transaction costs – especially costs of policing and enforcement – are reduced when buyers and sellers can seal an agreement with a handshake. Additional benefits enjoyed in trusting societies are demonstrated in other chapters in this volume. This chapter’s review of the literature on inequality and trust concentrates on economic inequality, which belongs to the category of inequality of outcome (or welfare) and excludes inequality of opportunity (which disregards inequalities that are due to differences in effort). In the empirical parts of the chapter the definition of inequality is even narrower. Probably since...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.