More Foreigners Less Trust

Georgia Smith, January 2006



A research paper from the Australian National University has found the obvious: the more multicultural a society is, the less people trust one another.

The paper, Does Equality Lead to Fraternity, by Andrew Leigh, examines the factors that affect how people trust each at local and national levels.

Leigh finds that people are less likely to trust each other where there are more foreigners.

This generalized lack of trust affects economic performance, as people are less likely to to trust each other in doing business. In the words of the Report, ‘Economic theory has shown that the payoff in repeated games can be higher…’ where people are dealing with their own kind.

In Australia, poor whites are even more likely to trust rich whites than foreigners. ‘Across Australian neighbourhoods (Leigh 2006), ethnic heterogeneity appears to be more important than inequality’ in the level at which people trust each other.

A copy of the Report can be found athttp://cepr.anu.edu.au/pdf/DP513.pdf


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