In 2011, I published a paper with Christian Bjørnskov, with one of the best titles I have ever come up with:
Bergh, Andreas and Christian Bjørnskov. 2011. "Historical Trust Levels Predict the Current Size of the Welfare State." Kyklos 64(1):1-19.
The ideas is basically that countries with high average social trust (also known as generlized trust or interpersonal trust, and measured by asking people if they agree that mostr people can be trusted) are more prone to creating and successfully maintaining universal welfare states, and that this mechanism is the main reason why trust and welfare state size is positively correlated at the country level (rather than the idea that the welfare state somehow causes trust).
Granted, some might not be entirely convinced by our country level IV-strategy, but there is now individual level evidence published that strengthens our result:
Daniele, Gianmarco, and Benny Geys. 2015 "Interpersonal trust and welfare state support." European Journal of Political Economy 39: 1-12.
Cited from the abstract:
This article argues that citizens' trust in their fellow citizens can play a central role for welfare state support, because it buttresses the belief that others will not use the welfare system inappropriately. Using the fourth wave of the European Social Survey, we confirm a strong positive association between interpersonal trust and welfare state support (controlling for institutional trust). We also show that: i) this link is driven at least in part by the mechanism discussed above; ii) causality runs from interpersonal trust to welfare state support (using a sub-sample of second generation immigrants); and iii) the effect of interpersonal trust appears conditional on the perceived quality of a country's institutions.