Trust in public institutions, inequality, and digital interaction: Empirical evidence from European Union countries

Flaviana Palmisano and Agnese Sacchi

Journal of Macroeconomics, 2024, vol. 79, issue C

Abstract: Declining institutional trust is one of the central problems in modern societies. Identifying its determinants, among which inequality, is fundamental for designing suitable interventions to restore confidence in institutions and preserve the social contract. We study the relationship between the two phenomena for EU-28 countries over the period 2003–2019. We use OLS and IV estimations to show that increasing income inequality is significantly associated with reduced trust in national governments. We also find that citizens’ digital interaction with the public administrations represents a mitigating channel as it contributes to shrinking the adverse effect of inequality on institutional trust, especially for more vulnerable categories in society, such as individuals with low educational attainment and those who are unemployed. These new insights might be particularly helpful for the government's agenda to meet transparency goals and provide more digital public services. From a policy viewpoint, redistribution policies combined with a well-established e-relationship between citizens and governments may be the road to restore trust in institutions.

Keywords: Trust; National governments; Income inequality; Digital interaction (search for similar items in EconPapers)
JEL-codes: D31 D78 O33 O38 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:79:y:2024:i:c:s0164070423000824

DOI: 10.1016/j.jmacro.2023.103582

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