The State and the Creation of an Environment for the Growing of Trust

Abstract

There is a growing interest in the literature on trust and social capital in the analysis of the role of the State in the creation and destruction of trust. According to some authors, the intervention of the State crowds out trust instead of fostering it. In this article, the author shows that the intervention of the State as a third-party enforcer of agreements does not crowd out expectations of trust, but it does not create trust either. However, it is further shown that the absence or inefficacy of the State does destroy trust. This last idea is illustrated with a classical case in the social capital literature: Southern Italy in the modern period.