Trust in India and Sweden

Abstract

The authors test the proposition, put forward by Francis Fukuyama, that the higher the level of trust in a country the less corrupt, the more developed, and wealthier its economy will be. They study trust and voluntary cooperation using a one-shot and three-person public goods game experiment in India and Sweden. The results, in line with the proposition, show that the average contribution is significantly larger in Sweden, implying a higher level of trust and cooperation in Sweden than in India. This article provides further evidence on the relationship between trust and economic development. This study differs from previous ones in that it uses a multilateral game experiment to study trust and cooperation rather than a bilateral game experiment. Furthermore, it provides evidence from two countries not studied before in this context.