Trust in Public Institutions over the Business Cycle
We document that trust in public institutions--and particularly trust in banks, business and government--has declined over recent years. U.S. time series evidence suggests that this partly reflects the pro-cyclical nature of trust in institutions. Cross-country comparisons reveal a clear legacy of the Great Recession, and those countries whose unemployment grew the most suffered the biggest loss in confidence in institutions, particularly in trust in government and the financial sector. Finally, analysis of several repeated cross-sections of confidence within U.S. states yields similar qualitative patterns, but much smaller magnitudes in response to state-specific shocks.
The authors would like to thank Philip Cook for helpful comments, Don Kohn for useful conversations, and John Coglianese for truly outstanding research assistance. The authors wish to disclose that they obtained access to data from the Gallup World Poll and from recent Gallup polls due to a consulting relationship with Gallup. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Betsey Stevenson & Justin Wolfers, 2011. "Trust in Public Institutions over the Business Cycle," American Economic Review, American Economic Association, vol. 101(3), pages 281-87, May. citation courtesy of