Handbook of Social Capital
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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.
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Chapter 21: The Macro Perspective on Generalized Trust

Martin Paldam


Martin Paldam1 21.1 Introduction: the G-trust variable One of the key variables in the social capital discussions is generalized trust.2 To save words the average generalized trust for a country is termed G-trust. Table 21.1 gives the formulation and the aggregate of all answers in the World Value Surveys3 that covers 188 pools in 83 countries during the last two decades of the twentieth century. Almost 30 per cent of the 255 399 answers say that ‘most people can be trusted’. The individual country G-trusts are listed in the Appendix to this chapter. Justified trust reduces transaction and monitoring costs. It saves time and trouble the higher it is in society. It is thus a factor of production – it will be demonstrated that it is not a powerful one. Any country has a level of justifiable trust. If you have more trust than that, you are a ‘sucker’ that other people exploit. If you have less trust, you are a ‘cynic’, who creates costs and trouble for other people. Most prefer to deal with reasonable people, who are realistic by being close to the justifiable level. By the law of large numbers we get: Thesis The Rationality Theorem of Trust: trust is rational for society at large. We may measure it poorly and individuals deviate to both sides, but the G-trust is rational and an important characteristic of a society. The G-trusts of the 188 polls are depicted on Figure 21.1, which shows that they have a...

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