Ricerc@Sapienza

Institutional trust is at the basis of the legitimacy and sustainability of political systems. Especially in periods of crisis - such as the one that started in 2007 or the most recent related to the COVID-19 pandemic - institutional distrust may represent a barrier to the implementation of recovery procedures causing great harm to society and damaging governments' capacity to act. In fact, institutional trust is also a pillar of social cohesion as it affects governments' ability to ruling and enables them to act without having to resort to coercion, thereby reducing transaction costs and increasing efficiency. As trust in institutions declines, support for democracy does as well. Surprisingly, in the past two decades, the spread of democratic systems has been accompanied, on the one hand, by a decline in trust in many institutions and, on the other hand, by a rise of income inequality. Hence, this project intends to shade light on these peculiar trends by studying the impact of income inequality on institutional trust. A flourishing branch of the literature explores the effects of inequality on individual beliefs and behaviours, including the consequences of rising inequality on trust. However, existing works impose a focus specifically on interpersonal trust, thus ignoring that inequality might also exert a non-negligible impact on institutional trust. They also remain silent on the mechanisms that might be at play in shaping this relationship. This project will contribute to the existing literature by providing the first evidence on the nexus between inequality and institutional trust and on the existence of potential transmission channels.