Catherine Rampell shows that Americans are not a very trusting people by OECD standards:
Trust correlates with a lot of other important economic variables, including the fact that high-trust countries tend to be richer countries and that more egalitarian countries tend to be more trusting countries. My colleague David Madland published an article on growth and the middle class recently in which he develops the argument that the main line of causation is that equality increases trust and trust increases growth.
It’s difficult to disentangle these issues statistically, but I think the theoretical argument that trust causes growth rather than the reverse is strong since more trust should mean lower transaction costs. It also seems to me that high levels of trust (as in Northern Europe) boost political will to spend money on poor people (lacking in the US even in situations where people’s spending priorities are generally progressive) since people have more confidence that anti-poverty spending is meeting genuine needs rather than to “welfare queens” or what have you.
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