Evolution and Determinants of Generalized Trust – The Global Evidence over 41 Years

By constructing a unique international database on generalized trust covering 142 countries worldwide for 41 years from 1980 to 2020, this paper finds a pronounced intertemporal variation of generalized trust over time in a majority of countries across the globe. When analyzing the time series patterns over the last four decades, a divergence in generalized trust between OECD and non-OECD economies is found. While the OECD economies saw an increase in generalized trust, the non-OECD economies faced a decline. European Coordinated Market Economies drive the increase in trust in OECD economies. Their increase in trust is driven by rising income, higher college graduation rates, and an ageing society. Asian and African economies drive the decline in non-OECD economies. Their decline in trust is driven by a rejuvenating society and country-specific shocks, such as the autocratization of the political system or severe famine. The decline in trust in those countries is responsible for the overall global decline.