The role of institutions and social inclusion in trust building

This study has explored the potential role of institutional quality and social inclusion in trust building. By utilizing the panel data spanning over thirty five years and for one hundred and twenty four countries of the world, we have applied Fixed Effects as well as Quintile Regression Models to explore the empirical relationship of our interest. The findings reveal that social inclusion is an important and key factor in trust building. The effects of social inclusion on trust are robust as the coefficient of social inclusion is positive and significant across all of our estimated models. Institutional quality also has positive and significant effects on trust building except at medial level of distribution of trust where it has positive but insignificant effect on trust. Income inequality has negative and significant effects whereas the effects of ethnolinguistic diversity on trust are contextual specific as these effects vary across different quintiles of trust distribution. Diversity has negative and significant effects on trust at 10th percentile and positive and significant effects at 90th percentile of trust distribution. Our findings are important for policymakers who can formulate strategies to foster inclusive environment which can be conducive to enhance trust in the society.