Income and Social Trust in Latin America

How do economic conditions affect trust? In this paper, I analyze the effect of natural resource shocks on social trust in Latin American regions. To deal with the endogeneity between income and trust, I use an identification strategy that relies on the exogeneity of the international prices of comm...

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Main Author: Juan Pablo González
Format: Article
Language:English
Published: SAGE Publishing 2023-04-01
Series:Journal of Politics in Latin America
Online Access:https://doi.org/10.1177/1866802X221122295
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author Juan Pablo González
author_facet Juan Pablo González
author_sort Juan Pablo González
collection DOAJ
description How do economic conditions affect trust? In this paper, I analyze the effect of natural resource shocks on social trust in Latin American regions. To deal with the endogeneity between income and trust, I use an identification strategy that relies on the exogeneity of the international prices of commodities. I show that income shocks have a positive effect on social trust, a result that is robust to a number of checks. I present evidence that points to two mechanisms: increases in life satisfaction and a reduction in crime victimization. I do not find that inequality is moderating this effect nor that extractive commodities are detrimental to social trust. These results are consistent with the decline in social trust on the continent during the last decade of sluggish growth and economic turmoil.
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spelling doaj.art-7a5154af95d04e0bb828ec8c730406d32023-03-22T20:33:30ZengSAGE PublishingJournal of Politics in Latin America1866-802X1868-48902023-04-011510.1177/1866802X221122295Income and Social Trust in Latin AmericaJuan Pablo GonzálezHow do economic conditions affect trust? In this paper, I analyze the effect of natural resource shocks on social trust in Latin American regions. To deal with the endogeneity between income and trust, I use an identification strategy that relies on the exogeneity of the international prices of commodities. I show that income shocks have a positive effect on social trust, a result that is robust to a number of checks. I present evidence that points to two mechanisms: increases in life satisfaction and a reduction in crime victimization. I do not find that inequality is moderating this effect nor that extractive commodities are detrimental to social trust. These results are consistent with the decline in social trust on the continent during the last decade of sluggish growth and economic turmoil.https://doi.org/10.1177/1866802X221122295
spellingShingle Juan Pablo González
Income and Social Trust in Latin America
Journal of Politics in Latin America
title Income and Social Trust in Latin America
title_full Income and Social Trust in Latin America
title_fullStr Income and Social Trust in Latin America
title_full_unstemmed Income and Social Trust in Latin America
title_short Income and Social Trust in Latin America
title_sort income and social trust in latin america
url https://doi.org/10.1177/1866802X221122295
work_keys_str_mv AT juanpablogonzalez incomeandsocialtrustinlatinamerica