Basil Halperin, Ben Ho, Ian Muir, John List, 02 October 2019

Even economies built on market capitalism are built on relationships. And when trust within relationships fray, apologies can help to restore them. This column describes the first large-scale apology experiment done in the field. Using the Uber platform to better understand the costs of apologising, the study asked why and in what cases apologies helped restore relationships. It finds that apologies can indeed work but are sometimes costly.

Stephanie Bergbauer, Jean-Francois Jamet, Hanni Schölermann, Livio Stracca, Carina Stubenrauch, 20 September 2019

Recent successes of populist movements in Europe might seem to reflect eroded trust in the EU’s institutions. This column asks what global lessons can be drawn from recent research on Euroscepticism at the ECB and elsewhere. It argues that taking citizens’ concerns seriously and addressing salient issues, building on a sense of togetherness, and caring about public trust should inspire a course of action at the global level. Insufficient progress along these dimensions has played a key role not only in Brexit, but also in the backlash against the multilateral world order underpinning globalisation.

Pauline Grosjean, 09 September 2019

How did WWII shape our views about the state, and about each other? This column, part of a Vox debate on the economics of WWII, uses individual-level data from more than 35,000 individuals in 35 countries to shed light on how wartime victimisation has shaped political and social preferences in the long run. Personal or family exposure to war violence has left a negative and enduring imprint on levels of political trust throughout Europe and Central Asia, regardless of the outcome or nature of the conflict. It also spurred collective action, but of a dark nature – one associated with further erosion of social and political trust.

Lucrezia Reichlin, 25 July 2019

Lucrezia Reichlin argues that in an increasingly globalised world, there is more need than ever for Europeans to work together in order to make our currencies robust, to cope with the refugee crisis, and to defend ourselves from the threat of protectionism.

Arancha Gonzalez, Marion Jansen, 04 July 2019

Economic governance is confronting the unfolding of three tectonic shifts: a digital revolution, an environmental revolution, and a social revolution. We are seeing the return of geopolitics. This column introduces a new book from CEPR, the International Trade Centre and the European University Institute that collects insights from 28 women policymakers and thought leaders on how to shape a system of global governance capable of managing those shifts and of rebuilding trust that voters appear to have lost in many countries.

Pablo Brañas, Antonio Cabrales, Guillermo Mateu, Anxo Sánchez, Angela Sutan, 22 May 2019

Pre-negotiation interactions, such as shared meals, are viewed as a valuable means to build trust and rapport so as to improve the outcomes of the negotiation. Even tax authorities acknowledge this – business meals tend to be tax-deductible, at least in part. This column puts this folk wisdom to the test using a controlled negotiation simulation experiment with MBA students. It finds that there is no difference in negotiation outcomes whether or not pre-negotiation socialising took place.

Alison Booth, Xin Meng, 25 March 2019

The literature examining the effect of conflict on trust and trustworthiness has reached contradictory conclusions. This column studies the long-term behavioural impact of the Cultural Revolution in China, which was a major in-group conflict. It finds that the children and grandchildren of those who were mentally or physically abused during the Revolution are less trusting, less trustworthy, and less likely to be competitively inclined relative to peers whose parents/grandparents experienced the Cultural Revolution but were not directly mistreated. 

Simon Wren-Lewis, 14 December 2018

Nicolò Fraccaroli, Alessandro Giovannini, Jean-Francois Jamet, 04 October 2018

Central bank independence is a cornerstone of monetary policy, but since the Global Crisis many have questioned the legitimacy of giving policymaking power to unelected officials. The column analyses the way that the ECB's accountability framework functions, and finds the ECB and the European Parliament have increased the intensity and focus of their exchanges since the crisis. Despite populism, the tone of exchanges has remained positive.

Nathan Nunn, Nancy Qian, Jaya Wen, 29 September 2018

Cultural values and beliefs have an impact on social and economic development, but the interplay between culture and political institutions is still not well understood. This column examines the effect of trust on political stability in democratic and non-democratic regimes, specifically in the face of severe economic downturns. It finds that democratic regimes with high levels of trust are much less likely to experience leader turnover than low-trust countries, while there is no effect among non-democracies, and that countries with higher levels of trust experience faster economic growth in the years immediately following a recession. 

Richard Thakor, Robert Merton, 21 August 2018

Trust in financial products and institutions is widely recognised as being essential for financial markets to function efficiently. This column argues that trust in financial institutions may have a first-order impact on whether non-bank (fintech) firms can survive when competing against traditional banks. When trust is lost and reputation becomes important, the cost of funding rises more for fintech firms than for banks, as financiers see that banks have a stronger reputational incentive to make good loans. So while banks may be able to survive a loss of trust, fintech lenders will be forced to shut down.

Luigi Guiso, Helios Herrera, Massimo Morelli, Tommaso Sonno, 18 May 2018

There has been some disagreement over the roots of the recent rise of populism in Europe. This column examines variations in exposure to economic shocks and in ability to react to them in different regions of Europe to show that the cultural backlash against globalisation has been driven by economic woes. In regions where globalisation was present but that have benefited economically, there has been no such backlash and the populist message has retreated. The message is clear: if one wants to defeat populism, one must defeat first economic insecurity.

Sara Lowes, Eduardo Montero, 13 May 2018

Delivery of health aid can be jeopardised by distrust at the local level. This column uses evidence from French military campaigns in Cameroon and former French Equatorial Africa to show that a significant reason for this distrust may be aid recipients’ historical experiences of colonial medical campaigns. Building and maintaining trust in medicine should remain a priority for modern health interventions.

Yann Algan, Sergei Guriev, Elias Papaioannou, Evgenia Passari, 12 December 2017

A wave of populism has been gaining ground in the West since 2012. This column uses regional data for 26 European countries to explore how the impact of the Great Recession on labour markets has affected populist voting, political attitudes, and trust. The results indicate a strong link between unemployment and voting for non-mainstream (especially populist) parties. Unemployment is also correlated with increasing distrust of national and European parliaments.

Gylfi Zoega, 03 November 2017

The vote for Brexit and the election of Trump are just two examples of the recent rise in populism. This column discusses how support for populist parties in Europe is closely correlated with a lack of trust in national parliaments and in the European Parliament. The EU must convince voters that it is acting in their interests and taking their concerns into account. At the same time, a distinction has to be made between decisions that should be taken at the EU level and those that are better left in the hands of the member states.

Elena Cettolin, Sigrid Suetens, 13 September 2017

Studies have shown that ethnic discrimination occurs in many countries across Europe and the rest of the world, but distinguishing between discrimination based on ‘stereotypes’ and on ‘tastes’ is difficult. This column presents results from an experiment in the Netherlands that isolated taste-based discrimination. The results suggest that native Dutch participants reciprocate trust placed in them by immigrants of non-Western less than they reciprocate the trust of fellow Dutch natives. Since trustworthiness involves no behavioural risk, this implies that discrimination is the consequence of not only stereotyping, but also of tastes.

Christian Dustmann, Barry Eichengreen, Sebastian Otten, André Sapir, Guido Tabellini, Gylfi Zoega, 23 August 2017

Recent years have seen a decline in trust in established political institutions and parties and a surge in support for populist movements and policies, not least in Europe where scepticism and, in some places, outright hostility towards the European Union is evident. This column introduces the first report in CEPR’s Monitoring International Integration series, which analyses the roots of the decline in trust in both national and European political institutions and asks whether, as a result of these developments, the EU is at risk of disintegration.

Antonio Cabrales, Antonio M. Espín, Praveen Kujal, Stephen Rassenti, 09 May 2017

Trust in our partners is important for economic transactions, but time pressure might affect the level of trust we place in others. This column reports the results of an experimental game in which individuals choose how much trust to place in partners who either must respond instinctively, or have time to reflect. Less-reflective personality types incorrectly trusted their partners least when those partners had time to think. This has implications for policies which, for example, impose cooling-off periods on negotiations. 

Jeffrey Butler, Paola Giuliano, Luigi Guiso, 04 November 2016

The economic consequences of individuals being persistently mistaken in their trust beliefs can be as large as those from not going to college. This column sheds light on how trust assessments are made. It documents a large role for moral considerations, which may ultimately contribute to the persistence of mistakes in trusting behaviour.

John Helliwell, 06 September 2016

Discussions about inequality tend to focus on the distribution of income and wealth. This column argues for a shift in focus towards another source of inequality – subjective wellbeing. Wellbeing inequality has grown significantly for the world as a whole and in eight of the ten global regions. One way to address this inequality is to increase social trust.

Pages

Events

CEPR Policy Research