Economic crisis and social trust: Reviewing the effects of economic polarisation on social and institutional confidence

Abstract

The economic crisis of 2008 led to a significant erosion of trust in the countries that were hit hardest. However, whether this fall can best be explained by external economic factors or by the lack of response on the part of the institutions to civic needs and demands is unclear. This study uses the extreme case of Spain to bring new insights to this debate. Its aim is to analyse, in comparison with perceived institutional performance and other factors, the effect of increasing economic inequality and its polarisation on levels of social and institutional trust. The study examines the respective impact of these factors upon different social groups according to their degree of exposure to the effects of the crisis. It uses a simultaneous equations model to jointly examine interpersonal and institutional effects. Our results show that the social groups most severely affected by the recession lose a great deal of trust in others. We also find that polarisation of economic conditions has different effects depending on the institution. Institutional trust seems to vary according to the interest of different groups, but the economic position is an underlying factor, especially for specific segments of the population. Without calling into question the importance of institutional performance, our research sheds new light on the importance of economic polarisation and its joint impact on social and institutional trust. We suggest that, in severe economic recession scenarios, rising inequalities have a direct impact on the institutional trust of certain social groups and deteriorate a lot interpersonal confidence among the most disadvantaged.

Once they are seated: the impact of radical right parties’ political representation on attitudes of trust and solidarity

“…We know that changes to the environment in the form of economic shocks or immigration is associated with perceived threat from immigration (e.g. Meulemann et al, 2018), public support for redistribution (Soroka and Wlezien, 2014;Stevenson, 2001), institutional trust (Torrente et al, 2019), and social trust (Dinesen et al, 2020;van der Meer and Tolsma, 2014). Empirical support for the link between immigration and public support for redistribution is more disputed, however I cannot rule out that it confounds the studied relationship (e.g.…”

Building Social Capital Online During the COVID-19 Transition in Indonesia

“…In other crises, more real distrust is shown to government authorities, and this issue creates significant difficulties in assessing the model of community involvement. Social groups most affected by the crisis will lose trust in many people (Torrente, Caïs, & Bolancé, 2019;Baharuddin et al, 2021). During periods of crisis, maintaining social trust positively affects performance and sustainability in social life (Mazumder, 2020).…”

Key Features and Factors behind Social Trust Formation in Ukraine

“…16 Initial research focuses on economic polarization as a source of fractionalization in society and the loss of a great deal of trust. 17 More recent research has expanded the concept of inequality beyond the economic sphere to language and ethnic diversity by framing them as influential factors behind imbalances in interactions. 18 The context of an individual's security is also studied when defining trust levels.…”