Document Type
Article
Journal/Book Title/Conference
Economics Research Institute Study Paper
Volume
95
Issue
16
Publisher
Utah State University Department of Economics
Publication Date
1995
Rights
Copyright for this work is held by the author. Transmission or reproduction of materials protected by copyright beyond that allowed by fair use requires the written permission of the copyright owners. Works not in the public domain cannot be commercially exploited without permission of the copyright owner. Responsibility for any use rests exclusively with the user. For more information contact the Institutional Repository Librarian at digitalcommons@usu.edu.
First Page
1
Last Page
31
Abstract
Growth theory emphasizes capital accumulation and technological change or, as Romer [1993] describes them, idea gaps and object gaps. This paper makes the case for a third and final crucial element: trust. Trust has both direct effects on the process of economic development, especially in facilitating increased exchange, and indirect effects through its influence on incentives to investment in human and physical capital (objects) and to the acquisition and processing of knowledge (ideas). Interpersonal trust is fundamental to economic development because irreversibilities, downside risk, and history-dependence are central features of most economic choice.
Recommended Citation
Barrett, Christopher B., "Idea Gaps, Object Gaps, and Trust Gaps in Economic Development" (1995). Economic Research Institute Study Papers. Paper 65.
https://digitalcommons.usu.edu/eri/65