Trust and trustworthiness after a land restitution program: lab-in-the-field evidence from Colombia

We assess the impact on trust and trustworthiness of a governmental program to compensate victims of forced displacement. All our subjects were eligible to apply for restitution of their land in accordance with the 2011 “Bill of Victims” issued by the Colombian government. The key independent variable of our analysis is whether a subject had obtained land within this or similar programs. Our dependent vari- ables are a subject’s trust and trustworthiness to unknown others, as measured by an experimental Trust Game. We focus on interpersonal trust and trustworthiness because of their well-documented positive effect on economic development. Our design also included a treatment in which subjects voted on their most preferred out- comes in the game, as it has been shown that consultative democracy can increase mutual trust in other settings. We find that land restitution is significantly correlated with higher trustworthiness, while there is no correlation with trust. This is consist- ent with the idea that trust and trustworthiness tap into different aspects of indi- vidual motivations. Voting is not correlated with trust but is associated with higher trustworthiness in one of the measures, although there is no differential impact for those who were granted land. We compare the effect of having been granted land with rural and urban samples who were not victims of displacement. Overall, our results suggest that land restitution empowers victims reestablishing social capital. The evidence on the impact of political participation and its interaction with land restitution is inconclusive.