How Much Do We Trust Others in LAC?: The Role of Inequality and Perceptions

High levels of trust, both interpersonal and in institutions, are fundamental for fostering inclusive growth. Trust affects growth directly. However, trust is affected by a number of factors, one of which is the distribution of income and wealth in a society, particularly when that distribution is not perceived as legitimate. Societies with higher levels of inequality present lower trust. Interestingly, actual wealth or income is not the only factor that matters. Perceived inequality plays a significant role in changes in trust. Understanding the personal characteristics as well as collective elements that form those perceptions is extremely relevant to understanding how actual and perceived inequality may follow divergent paths. This document addresses the role of trust in the growth process, the effects of inequality and perceptions of inequality on trust, and it discusses some ways to increase trust.