Transparency and trust: the case of the European Central Bank

Roman Horvath and Dominika Katuscakova

Applied Economics, 2016, vol. 48, issue 57, 5625-5638

Abstract: We examine how the transparency of the European Central Bank’s monetary policy affects the amount of trust that the citizens of the European Union have in this institution. We use nearly half a million individual responses from the European Commission’s Eurobarometer survey from 2000 to 2011 and estimate probit regressions with sample selection. We find that transparency exerts a non-linear effect on trust. Transparency increases trust, but only up to a certain point; too much transparency harms trust. This result is robust to controlling for a number of macroeconomic conditions, financial stability transparency measures, and economic and socio-demographic characteristics of respondents, including examining respondents in European Union countries that do not use the euro and addressing clustering issues.

Date: 2016
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Working Paper: Transparency and Trust: The Case of the European Central Bank (2015)
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DOI: 10.1080/00036846.2016.1181833

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