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Trust and the Welfare State: the Twin Peaks Curve

Updated on 15 November 2016 Published


Algan Yann, Cahuc Pierre, Sangnier Marc. In: The Economic Journal, Volume 126, Issue 593, June 2016, Pages 861–883.


We show the existence of a twin peaks relation between trust and the size of the welfare state that stems from two opposing forces. Uncivic people support large welfare states because they expect to benefit from them without bearing their costs. But civic individuals support generous benefits and high taxes only when they are surrounded by trustworthy individuals. We provide empirical evidence for these behaviours and this twin peaks relation in the OECD countries.