Speaker: Dr Ayse Demir, Postdoc research fellow, SOAS University of London

Abstract

We take the argument that confidence in the system is conducive for trust in partners and refocus on the trust-economic performance link from this perspective. In particular, we concentrate on confidence in financial institutions and confidence in the institutional framework (confidence in government, confidence in military, confidence in police and confidence in judicial system) interpreted as institutional trust. We then explore the role of financial inclusion as a transmission mechanism through which confidence affects economic growth, and beyond that sustainable economic development. We use simultaneous equation model (3SLS) for our empirical estimations for a sample of 131 developing and developed countries covering the period 2006-2017. The results provide support for a positive significant effect of confidence  on financial inclusion and of financial inclusion on growth and sustainable economic development.

Co-authors: Victor Murinde, Reinhard Bachmann, Laurence Harris, Christine Oughton and Meng Xie