The shadow of polarization is long: trust in the government and independent institutions after 142 government changes

Luis Guirola and Gonzalo Rivero
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Luis Guirola: AQR-IREA, Universitat de Barcelona, Spain.

No 202511, IREA Working Papers from University of Barcelona, Research Institute of Applied Economics

Abstract: We study how political polarization impacts trust in the government and independent institutions. We gather microdata from 27 countries over three decades and identify 142 government changes. For each of these events, we run a difference in differences design comparing left and right-wing supporters to identify the effect on trust caused by a particular party controlling the executive. The estimated effect ranges from 0 to 2.1 standard deviations, and is systematically larger when party polarization is stronger– this variable alone explains 72% of the variation. The effect propagates onto trust in the European Central Bank and other institutions outside government control. Examining the mechanism, we find evidence consistent with a) lack of knowledge about independence and b) that elections under high polarization are high-stakes events affecting multiple dimensions, including subjective wellbeing, and trust toward the political system as a whole.

Keywords: Political Polarization; Trust; Institutions; Politics. JEL classification: D72; D14; D02. (search for similar items in EconPapers)
Pages: 62 pages
Date: 2025-10
New Economics Papers: this item is included in nep-pol and nep-soc
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Persistent link: https://EconPapers.repec.org/RePEc:ira:wpaper:202511

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