Economic Performance and Political Trust: The impact of the financial crisis on European citizens

Abstract:

Trust links ordinary citizens to the institutions that are intended to represent them, and thereby enhances both the legitimacy and the effectiveness of democratic government. In this article we investigate whether economic performance affects political trust and if the 2007–2008 financial crisis has decreased confidence levels due to the severity of its consequences. We employ multilevel modeling to analyze data from 25 European countries taken from the European Social Survey, combined with economic indicators from the World Bank and the international Monetary Fund. Our results show that economic performance is an important decider of people's levels of trust. We are also able to conclude that the financial crisis has reduced citizen's trust in political institutions in those countries where the crisis has had a severe impact on the economy.