HOW DO THE LOW LEVELS OF TRUST WITHIN LATIN AMERICA AFFECT SOCIAL COHESION AND GROWTH?
PHILIP KEEFER AND CARLOS SCARTASCINI,
INTERVIEWED BY GUSTAVO TORRENS
FEBRUARY 25, 2022

View the webinar here.
(Also accessible here on YouTube.)

Trust is essential for social cohesion and economic development, yet it remains a mystery in many ways. In Latin America and the Caribbean, the levels of trust in others, trust in firms, and trust in government are lower than anywhere else in the world. Offering a wealth of new data, Philip Keefer and Carlos Scartascini document the region's low levels of trust and discuss with Gustavo Torrens the implications of this for social cohesion.

Investment, entrepreneurship, and employment flourish when firms and government, workers and employers, banks and borrowers, consumers and producers trust each other. Inside private and public sector organizations, trust is essential for collaboration and innovation. Mistrust, on the other side, distorts democratic decision-making. It keeps citizens from demanding better public services and infrastructure, from joining with others to control corruption, and from making collective sacrifices that leave everyone better off. In these ways, low levels of trust profoundly affect collaboration and innovation inside firms, in the public sector, for investment, and for democratic decision-making.

The full study and summary can be read here: Philip Keefer and Carlos Scartascini, editors, Trust: The Key to Social Cohesion and Growth in Latin America and the Caribbean, IADB, 2022.

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  Philip Keefer

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  Carlos Scartascini

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  Gustavo Torrens

About the Speakers
Philip Keefer is a Principal Economic Advisor at the Inter-American Development Bank, and Vice-President of the Ronald Coase Institute. His research focuses on the determinants of political incentives to pursue economic development. He has investigated the impact of insecure property rights on growth; the effects of political credibility on policy; the sources of political credibility in democracies and autocracies; and the influence of political parties on conflict, political budget cycles, and public sector reform.

His work has appeared in journals ranging from the Quarterly Journal of Economics to the American Political Science Review. Earlier he served as a Lead Research Economist in the Development Research Group of the World Bank, and he has worked in countries ranging from Bangladesh, Benin, Brazil, and the Dominican Republic to Indonesia, México, Perú and Pakistan.

Carlos Scartascini is Head of the Development Research Group and Leader of the Behavioral Economics Group at the Inter-American Development Bank. His areas of expertise include behavioral economics, political economy, and public finance. His current focus is on expanding the use of behavioral economics in Latin America and the Caribbean.

He has published eight books and more than 45 articles in edited volumes and specialized journals. He is Associate Editor of the academic journal Economía, and Head and founding member of LACEA's Behavioral Insights Network (BRAIN).

Gustavo Torrens is Associate Professor, Department of Economics, Indiana University, and Director of the Ostrom Workshop Political Economy Program. He focuses on political economy, examining how institutions influence economic outcomes and also investigating the determinants of institutions and institutional change. His research areas include trade and migration policies, crime and conflict, and fiscal federalism.

His research has been published widely, has received prizes from the Argentine National Academy of Sciences and the Portuguese Ministry of Economics, and has gathered substantial media attention. He does theory as well as applied work, including laboratory experiments.