Political trust and economic development in European regions

Muringani, Jonathan, Dahl Fitjar, Rune and Rodríguez-Pose, Andrés ORCID: 0000-0002-8041-0856 (2024) Political trust and economic development in European regions. Annals of Regional Science. ISSN 0570-1864

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Abstract

This paper examines the complex relationship between political and social trust, government quality, and economic development across 208 regions in the European Union (EU). We use a pooled data generalized structural equation model (GSEM) to show that political trust serves as a fundamental driver of regional economic development in the EU. Political trust is, in turn, influenced by both social trust and government quality. Social trust and government quality have quadratic effects on political trust, showing diminishing returns, while the effect of political trust on economic development is linear. Political trust mediates the relationship between social trust and economic development entirely, while government quality retains a direct relationship with economic development. These findings underscore the fundamental role that political trust plays as a mechanism through which both formal and informal institutions shape regional development.

Item Type:	Article
Additional Information:	© 2024 The Author(s)
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HC Economic History and Conditions J Political Science > JZ International relations
JEL classification:	R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes H - Public Economics > H1 - Structure and Scope of Government > H11 - Structure, Scope, and Performance of Government D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy; Administrative Processes in Public Organizations; Corruption
Date Deposited:	07 Oct 2024 09:39
Last Modified:	19 Nov 2024 11:42
URI:	http://eprints.lse.ac.uk/id/eprint/125630

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