Bo Rothstein

The State and Social Capital: An Institutional Theory of Generalized Trust

The purpose of this article is to present an alternative theory on the generation of social capital. In the discussion about the sources of social capital it has been stressed that generalized trust is built up by the citizens themselves through a culture that permeates the networks and organizations of civil society. Since this approach has run into conceptual problems and has produced only mixed empirical evidence, we like to highlight instead how social capital is embedded in and linked to formal political and legal institutions. Not all political institutions matter equally, however. In fact, we argue that trust thrives most in societies with effective, impartial and fair street-level bureaucracies. The article presents the causal mechanism between these institutional characteristics and generalized trust, and illustrates its validity in a crossnational context.

Social Capital in the Social Democratic Welfare State

The strength of the Swedish Social Democracy implies that Sweden is a critical case for theory about social capital. First, what is the relation between the encompassing welfare programs and social capital? Second, what is the effect on civil society of the neo-corporatist relations between the government and major interest organizations? Using both archival and survey data, the result is that the sharp decline in social capital since the 1950s in the United States has no equivalence in Sweden. This has to do with the specific way in which social programs have been institutionalized. Social capital may be caused by how government institutions operate and not by voluntary associations.

Social Capital, Impartiality and the Welfare State: An Institutional Approach

This chapter sheds more light on the sources of one important aspect of social capital, namely generalized trust. Most discussions about the sources of social capital thus far have been focused on the realm of civil society. The more people are engaged in voluntary associations and informal networks, the more trusting toward other people they will become (Putnam 1993, 2000). This approach is problematic because there is no successful theory of social capital that links aspects of civic life and trust at the micro- and macrolevels. Previous chapters have shown that, at the microlevel, voluntary associations do not necessarily work as producers of civic values and attitudes, such as generalized trust (e.g., Mayer, Wollebaek and Selle this volume; see also Stolle 2001; Uslaner 2002). In addition, it is difficult to distinguish between networks that produce distrust toward others, for example criminal or racist organizations, and networks that potentially produce trust, such as Parent-Teacher Associations or the Boy Scouts (however, Hooghe tries to make this distinction in this volume).

Creating Political Legitimacy: Electoral Democracy versus Quality of Government

It is often held that the establishment of electoral democracy is key to the creation of political legitimacy. This article challenges this idea and presents an alternative. Many empirical studies reveal that electoral democracy has no necessary implications for the establishment of legitimacy. Even in the successful and stable Nordic democracies, there is scant evidence that legitimacy is created on the input side of the political system. For example political legitimacy in the former Yugoslavia broke down not because ethnic groups realized they would become permanent minorities but because the new Croatian state violated citizens’ rights in the exercise of power. Legitimacy turns out to be created, maintained, and destroyed not at the input but at the output side of the political system. Hence, political legitimacy depends at least as much on the quality of government than on the capacity of electoral systems to create effective representation.

Anti-corruption: the indirect ‘big bang’ approach

ABSTRACT In policies for economic development, anti-corruption measures have received increased attention. The policy advice from the international “good governance regime”, which is based on the principal-agent theory, is geared towards incremental change that will set in motion a “virtues circle”. It is argued that this theory and the following incremental policy approach is dysfunctional for curbing corruption. It is unlikely that small institutional devices can set in motion a process towards establishing “good governance” in countries were corruption is systemic. Based on an understanding of corruption as an instance of the theory of collective action, it is argued that what is needed to establish a new equilibrium of social and economic exchange is a “big-bang” type of change. Incremental policies that are based on the principal-agent theory are likely to end in a “social trap” situation worsening the problem. The argument is illustrated by an historical case-study of how corruption was eradicated in 19th century Sweden.

Explaining thewelfare state: power resources vs. the Quality of Government

Abstract in Undetermined The hitherto most successful theory explaining why similar industrialized market economies have developed such varying systems for social protection is the Power Resource Theory (PRT), according to which the generosity of the welfare state is a function of working class mobilization. In this paper, we argue that there is an under-theorized link in the micro-foundations for PRT, namely why wage earners trying to cope with social risks and demand for redistribution would turn to the state for a solution. Our approach, the Quality of Government (QoG) theory, stresses the importance of trustworthy, impartial, and uncorrupted government institutions as a precondition for citizens’ willingness to support policies for social insurance. Drawing on data on 18 OECD countries during 1984–2000, we find (a) that QoG positively affects the size and generosity of the welfare state, and (b) that the effect of working class mobilization on welfare state generosity increases with the level of QoG. (Less)

Dying of corruption

In many poor countries, over 80% of the population have experienced corrupt practices in the health sector. In rich countries, corruption takes other forms such as overbilling. The causal link between low levels of the quality of government (QoG) and population health can be either direct or indirect. Using cross-sectional data from more than 120 countries, our findings are that more of a QoG variable is positively associated with higher levels of life expectancy, lower levels of mortality rates for children and mothers, higher levels of healthy life expectancies and higher levels of subjective health feelings. In contrast to the strong relationships between the QoG variables and the health indicators, the relationship between the health-spending measures and population health are rather weak most of the time and occasionally non-existent. Moreover, for private health spending as well as for private share of total health spending, the relation to good health is close to zero or slightly negative. The policy recommendation coming out of our study to improve health levels around the world, in rich countries as well as in poor countries, is to improve the QoG and to finance health care with public, not private, money.

Restructuring the welfare state : political institutions and policy change

Restructuring Politics: Institutional Analysis and the Challenges of Modern Welfare States B.Rothstein & S.Steinmo Institutions - Experiences - Preferences: How Welfare State Design Affects Political Trust and Ideology S.Kumlin Is America Becoming More Exceptional?: How Public Policy Corporatized Social Citizenship F.Dobbin Privatization, Devolution and the Welfare State: Rethinking the Prevailing Wisdom S.R.Smith Political Institutions and the Politics of Race in the Development of the Modern Welfare State R.C.Liebermann Including Foreigners in National Welfare States: Institutional Venues and Rules of the Game V.Guirandon Negotiating Welfare Reform: Actors and Institutions in the Japanese Welfare State M.Estevez-Abe Political Trust and Support for the Welfare State: Unpacking a Supposed Relationship S.Svallfors The Universal Welfare State as a Social Dilemma B.Rothstein

Questioning the New Liberal Dilemma: Immigrants, Social Networks, and Institutional Fairness

Previous research concludes that immigrants and minority members, as well as all residents of more diverse contexts, display less generalized trust. Such findings suggest a harsh trade-off between diversity on the one hand and social capital on the other. In contrast, we gauge the relationship between minority status and trust while considering three interaction variables. First, informal neighbour interaction cushions the negative impact of minority status. Second, a similar role is played by fair treatment by public authorities responsible for social and welfare state policies. Third, consistent with expectations we did not find a similar cushioning interaction of participation in organized settings. All in all, the empirical results encourage a more contingent stance about diversity and social capital than that found in recent research. The minority culture of mistrust is not cut in stone but has a potential to wither away as a consequence of positive experiences of social interaction and institutional fairness. Because these have a particularly positive impact on trust among minorities, the trust gap between immigrants and may—under the right circumstances—be closed at high levels of these variables.

Corporatism and Reformism: The Social Democratic Institutionalization of Class Conflict

Corporatism has generally been seen as a way of incorporating an unwilling working class into the capitalist system. Searching for possible explanations of corporatism, one has to take into consideration the great variety of the degree of corporatism within Western states This vanety shows a firm relationship between states that have strong corporatist structures and states with a successful reformist labour movement, that is, Austria, Norway and Sweden and to some extent Denmark and the FRG This indicates that there is something wrong with the functionalist thesis that corporatism is a way of taming the working class. The aim of this article is to raise some hypotheses about the reasons why polities dominated by Social Democracy seem especially to foster corporatist structures. It is argued that in order to understand the relationship between the existence of corporatist structures and a successful Social Democracy, we have to scrutinize the logic of the system of bargaining between capitalists and workers that the capitalist relations of production brings forth.