A Note on Factors Influencing Trust in Government

Abstract

Responses to surveys eliciting evaluations of trust in government, both generally and in specific areas, have varied over time and across countries.Using consistent survey data for 34 OECD countries from 2007-2023, we estimate a model of factors determining levels of trust.We employ a series of econometric techniques of increasing sophistication.The level and growth rate of real income per capita, social spending per capita, the degree of decentralization, and economic freedom all exert positive effects on trust.Inflation, unemployment, and debt per capita negatively affect trust.Additionally, higher levels of human capital and the elderly share of the population negatively affect trust.In the context of trust in government, the estimates suggest a heavier weight on inflation than on unemployment when compared to Okun's misery index, which weights them equally.Additionally, the estimates are used to evaluate combinations of policies, e.g.debt-financed increases in social spending that affect inflation and/or unemployment, to determine the net effect on trust in government.