Trust and Democracy: Leader Turnover during Economic Crises

By: Nathan Nunn, Nancy Qian and Jaya Y. Wen

Format:Print
| Language:English
| Pages:73

Abstract

We study the relationship between interpersonal trust and political stability in democratic countries. Using a six-decade-long annual country-level panel dataset, we find that recessions are more likely to cause political turnover in countries with lower levels of generalized interpersonal trust. The effect is present in democracies and not autocracies, for turnovers occurring through regular procedures and not coups, and during regularly scheduled election years. We also observe similar patterns in vote shares for incumbent parties in national elections, both across sub-national regions within Europe and counties within the United States. Finally, we find that nations with higher levels of trust, and thus less leader turnover tend, to experience more rapid recovery following economic recessions. Our results highlight the crucial role that generalized trust plays in ensuring political stability during times of economic turmoil.

Keywords

Interpersonal Trust; Recessions; Leader Turnover; Political Instability; Culture; Economic Slowdown and Stagnation; Trust; Political Elections

Citation

Nunn, Nathan, Nancy Qian, and Jaya Y. Wen. "Trust and Democracy: Leader Turnover during Economic Crises." NBER Working Paper Series, No. 24187, January 2018. (Revised February 2023. Available also from VOX and in Kellogg Insight.)