Lecture by Professor Jon Reiersen (University of South-Eastern Norway) at the Faculty of Economic Sciences

We cordially invite you to attend a seminar organized by the Department of Innovation and Development at the Faculty of Economic Sciences.

Professor Jon Reiersen, an economist from the University of South-Eastern Norway, will present his study entitled „Why Institutions Diverge: Social Trust and the Political Economy of Redistribution”.

More information about the researcher is available on the University of South-Eastern Norway website: https://www.usn.no/english/about/contact-us/employees/jon-reiersen.

The seminar will be held on May 29, 2025, at 11:00 in Room A409 at the Faculty of Economic Sciences.

Below, we present the abstract of the presentation.

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This research starts from a simple, yet fundamental question: why have advanced capitalist economies developed such divergent systems of wage bargaining, social insurance, and redistribution? Drawing on experiences from Scandinavia, we highlight the critical role of social trust in shaping both public support for redistributive welfare policies and workers’ acceptance of centralized wage coordination aimed at wage compression. We argue that the relationship between income inequality and social trust is mutually reinforcing. Coordinated wage-setting and a generous welfare state reduce income disparities, which in turn sustain and deepen social trust. This trust feeds back into continued political and institutional support for wage compression and welfare expansion. Over time, these dynamics generate self-reinforcing paths of development, amplifying initial differences in history, institutions or sudden shocks and resulting in enduring cross-national variation in social trust and income inequality.