The state counts: State efficacy and the development of trust

Most analyses of the relationship between state institutions and interpersonal trust claim either that the state crowds out trust or that it helps to create trust, acting as a third-party enforcer of agreements. Actually, the relationship between the state and trust is much more complex. This article presents a theoretical model that predicts how trust will evolve in highly efficacious and low-efficacious states. Based on priors about other people’s trustworthiness determined by educational level, the model claims that in low-efficacious states, trust will tend to collapse and education will not have an effect on trust levels. However, as state efficacy grows, education level will explain variations in trust levels. The theoretical predictions are to a great extent confirmed by a multilevel analysis of 47 countries