Economic performance and Political Trust: The impact of the Financial Crisis on European citizens

Abstract

Trust links ordinary citizens to the institutions that are intended to represent them, and thereby enhancing both the legitimacy and the effectiveness of democratic government (Bianco 1994; Gamson 1968; Braithwaite and Levi 1998; Hetherington 1998). It is therefore an essential part of a democratic system. People have confidence in their leaders when the government is working well, and absence of political confidence could threaten the system’s legitimacy. Mistrust by the citizens is often expressed as an unwillingness to follow political outcomes, which prevents progress from happening in the political process (Norris 1999). In this thesis I investigate whether economic performance affects political trust, and if the 2008 financial crisis has decreased confidence levels due to the severity of its consequences. By using multilevel modeling to analyze data from 25 European countries, I find that economic performance is an important component in levels of trust. I am also able to conclude that the financial crisis has reduced citizen’s trust in political institutions in the countries where the crisis has had a severe impact on the economy. As much research emphasizes the importance of individual perception of economic performance, this has also been tested for. The results indicate that individual perception of the economic situation, influence trust just as much, if not more, than the actual economic situation.