A classic controversy within the institutionalist literature has yet to be resolved. Does the state either render or erode generalized trust? The crowding out perspective contends that trust decays as a result of the state. The political-institutional perspective maintains that the state molds an environment where trust can grow. Using hierarchical generalized linear models with data from the World Values Survey and other sources, this article directly tests these competing arguments and demonstrates strong support for the political-institutional perspective. Although apparatuses of the state — specifically the public allocation of resources and legal property rights institutions — directly and positively influence generalized trust, these effects are not mediated by voluntary associations or income inequality. Instead, this article reveals that property rights institutions moderate and amplify the positive effect of voluntary associations on generalized trust. I discuss the theoretical implications of the results while exploring limitations and avenues for future research.
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