Abstract
Tolerant societies seem to function better than nontolerant societies both economically and socially. This makes it worthwhile to identify ways to stimulate tolerance. While previous research indicates that market-oriented formal institutions and policies offer such stimulus, it does not investigate what role cultural factors, like social trust, plays. We find that trust is a catalyst: The more there is, the more positive the effect of economic freedom on tolerance. Formal institutions hence interact with the culture of a society and work better as generators of tolerance in alignment with trust.
Acknowledgment
The article was partly written when Berggren was on a fellowship from the International Centre for Economic Research (ICER), which is recognized with gratitude.
Notes
1 The correlation coefficient between trust and tolerance homosexuals is rather low, 0.46, indicating that these two variables measure conceptually distinct things.