Trust and Democracy: Political Stability in Times of Economic Crisis

Nathan Nunn, Nancy Qian and Jaya Wen

No 24187, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the relationship between interpersonal trust and political stability in democratic countries. Using an annual country-level panel dataset covering six decades, we find that recessions are more likely to cause political turnover in countries with lower levels of generalised interpersonal trust. The effect is present in democracies and not autocracies, for turnovers occurring through regular procedures and not coups, and during regularly scheduled election years. We find an analogous connection between trust and leader turnover during recessions when looking across sub-national regions in Europe, across counties in the United States, and across individuals in U.S. counties. Our results highlight the crucial role of generalised trust in ensuring political stability during times of economic turmoil.

JEL-codes: D72 P16 P51 (search for similar items in EconPapers)
Date: 2018-01
New Economics Papers: this item is included in nep-cdm, nep-gro, nep-pol and nep-soc
Note: POL EFG
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Citations: View citations in EconPapers (11)

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