Institutional reforms and social trust: Quasi-experimental evidence from the Caucasian states

Abstract

I study the effect of institutional quality on social trust. As a source of exogenous variation, I consider the natural experiment of institutional reforms in the post-Soviet nation of Georgia following the 2003 Rose Revolution. I examine the level of social trust among Armenians and Azeris, the two ethnic groups that were largely uninvolved in the revolutionary events, and whose homelands have been partitioned between Georgia, Armenia, and Azerbaijan by the arbitrarily drawn boundaries inherited from the Soviet era. I show that people who were exposed to post-revolutionary Georgian institutions have higher levels of social trust. They also have higher levels of confidence in state institutions, but not higher intragroup cohesion. My findings suggest that improvement in institutional quality is important in fostering social trust.