Working Paper: CEPR ID: DP12555
Authors: Nathan Nunn; Nancy Qian; Jaya Wen
Abstract: We present findings that document one way in which a society's culture can affect political outcomes. Examining an annual panel of democratic countries over six decades, we show that severe economic downturns are more likely to cause political turnover in countries that have lower levels of generalized trust. The relationship is only found among democracies and for regular leader turnover, which suggests that the underlying mechanism works through leader accountability and the electoral process. Moreover, we find that the effects of trust on turnover are greatest during years with regularly-scheduled elections, and within democracies with a parliamentary system, a fully free media, and greater stability. The estimates suggest that generalized trust affects political institutions by influencing the extent to which citizens attribute economic downturns to the mistakes of politicians.
Keywords: trust; recession; political turnover
JEL Codes: D72; P16; P17; P51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| lower levels of generalized trust (Z13) | higher political turnover (D73) |
| economic downturns (F44) | higher political turnover (D73) |
| economic downturns + lower levels of generalized trust (F65) | higher political turnover (D73) |
| generalized trust (Z13) | political accountability during economic downturns (H12) |
| generalized trust (Z13) | perceptions of government performance during crises (H12) |