Deliberation, Trust, and Preventive Public Investment

Iceland spends 1.9% of its GDP on early childhood education and care; Ireland spends 0.16%, one tenth of the Icelandic level, for two countries at similar income. Norway has 116 preventable deaths per 100 000; Hungary has 363, a threefold difference within the same European Union framework. Why do some societies invest substantially more than others in preventing social risks before they materialise? This paper develops a theoretical framework and provides cross-national empirical evidence linking the quality of deliberative institutions and interpersonal trust to preventive public investment. A threecohort overlapping-generations model with a public social capital stock and preferences interdependent in the manner of Becker (1974) delivers, under three monotonicity assumptions and no functional-form specification, a strict positive effect of trust and deliberation on the preventive allocation of discretionary public spending, through four distinct channels (altruistic and productive for trust; altruistic and long-horizon for deliberation). The central empirical result is a robust positive association between deliberative institutional quality and ECEC spending across 32 countries (β = +5.77, p < 0.001, R 2 = 0.54), surviving competition with the World Governance Indicators, exclusion of Nordic countries, controls for total welfare-state generosity, a permutation test, placebo outcomes, a 2015-2019 pre-COVID replication, and seven alternative aggregations of the deliberative index. Preventable mortality and the infrastructure gap are studied as cross-sectoral consistency checks; their results are directionally consistent with the theory. We discuss what cross-section can and cannot establish, present panel and difference-indifferences extensions including a within-country case study of Hungary, and outline a research programme on the endogenisation of trust and deliberation.