Does terrorism reduce trust?: empirical evidence from Pakistan

Author Affiliation

Faiz Ur Rehman is Associate Professor at Institute of Business Administration (IBA), Karachi

Faculty / School

School of Economics and Social Sciences (SESS)

Department

Department of Economics

Was this content written or created while at IBA?

Yes

Document Type

Article

Source Publication

Defence and Peace Economics

ISSN

1476-8267

Disciplines

Econometrics | Economics | Finance | Social and Behavioral Sciences

Abstract

The literature on social capital and its economic implications shows that trust plays a significant role in the transaction of goods and services. However, few studies empirically investigate the evolution of trust over time. In this paper, we show how individuals’ trust in Pakistan is affected by the persistent shock of terrorism. By matching the country representative survey data with district-level terrorist attacks, we observe that exposure to terrorism is associated with lower levels of interpersonal trust. This finding is robust to various robustness checks including different indicators of terrorism risk and trust. Furthermore, our results are also consistent with the IV identification strategy.

Indexing Information

HJRS - W Category, Scopus, Web of Science - Social Sciences Citation Index (SSCI)

Journal Quality Ranking

Impact Factor: 1.247

Publication Status

Published

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