Essays on trust, corruption and welfare

This thesis builds on the literature of new institutional economics focusing on the formation and interactions of formal and informal institutions as well as their effects on welfare.The first empirical chapter focuses on Europe and explored the interplay between trust in national governments and corruption. Over the past decade European citizens’ confidence in political institutions has declined sharply. This essay explores what makes individuals report a particular level of trust towards their national government and why in Europe such trust is declining. At first, the chapter identifies the theoretical grounds of what affects trust decisions; exploring subsequently the question empirically by analysing data from the Eurobarometer (2005-2018). Using a multilevel logistic regression, I combine micro and macro characteristics to also explore the role of perceived corruption in this process. Results suggest that corruption is a significant determinant of trust in national governments, particularly where austerity was present.Subsequently, the second empirical analysis focuses on the inter-relations between informal and formal institutions through the inter-generational transmission of trust. In this chapter, I explore the role of individuals’ historical lineages in determining their contemporary political attitudes. Distinguishing between formal and informal institutions and motivated by a growing literature in economics and social sciences on how history matters in explaining variations in economic outcomes, I exam-ine how pre-colonial cultural and ethnic characteristics in Africa persist over time and shape contemporary political beliefs and attitudes towards political and traditional leaders. Two different matching methods are employed in order to match as best as possible contemporary respondents of the Afrobarometer with their ancestral lineages. Results confirm the hypothesis that there exist deeply rooted ethnic legacies that still shape political attitudes and beliefs today.The final essay shifts the regional focus again in the European Union and the interplay between political trust and subjective wellbeing is explored. Using data from the European Social Survey and a multilevel hierarchical modelling the effects of trust in national parliaments on subjective wellbeing are explored. Results suggest that insecurity with formal institutions, as expressed by distrust in national parliaments, is a significant determinant of subjective wellbeing in European Countries