Why are the Scandinavian countries in the European Union significantly richer than Southern/Eastern European countries? We try to answer this question from an empirical social capital perspective. In particular, we are interested in the interplay of social trust as a positive and corruption as a...

Why does bureaucratic corruption occur in the EU system? Several examples suggest that bureaucratic corruption exists and that the Commission’s anti-fraud agency, OLAF, is not a fully independent authority. We thus develop a novel interpretation of the principal-supervisor-agent model to cope...

Martin Paldam is one of the most prominent figures of Danish economics and European public choice. In this introduction to the special issue, we identify five of the areas, where he has made significant contributions: (1) vote and popularity functions and political business cycles; (2)...

Most modern welfare states offer an extensive array of services and benefits that are wholly or partly financed by tax revenue. One missing link in explaining the long-run sustainability of such comprehensive welfare states could be the already-existing stock of trust. Indeed, our cross-country...

In this paper we analyze whether social capital can emerge endogenously from a process of preference evolution. We define social capital as preferences that promote voluntary cooperation in a one-shot Prisoner’s Dilemma game. We investigate how the endogenous preferences depend on the amount...