Popova, Olga and Nikolova, Milena and See, Sarah Grace and Otrachshenko, Vladimir (2026) Inflation, unemployment, and institutional trust: the global evidence. OXFORD ECONOMIC PAPERS-NEW SERIES, 78 (1). pp. 157-178. ISSN 0030-7653, 1464-3812
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How do macroeconomic conditions shape people's trust in political institutions? This paper addresses this question by analysing the association between inflation, unemployment, and political trust using repeated cross-sectional data from over 2 million individuals across 148 countries between 2006 and 2023. We find that high unemployment is strongly and consistently linked to lower confidence in national governments and reduced approval of national leaders. In contrast, the influence of inflation is substantially smaller-typically four to eight times weaker-and less robust across specifications. Perceptions of national economic performance, personal financial insecurity, and corruption appear to be key channels underlying these relationships. While inflation is linked to lower political trust mostly in upper-middle- and high-income countries, the negative association between unemployment and trust is widespread across all income levels. These findings suggest that unemployment remains a global and salient challenge that governments should prioritize.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | EUROPEAN CENTRAL BANK; CITIZENS TRUST; PHILLIPS-CURVE; CRISIS; PREFERENCES; ECONOMISTS; MIGRATION; ORIGINS; TRADE; inflation; unemployment; trust; Gallup World Poll; I31; H11; E31; J60 |
| Subjects: | 300 Social sciences > 330 Economics |
| Divisions: | Institute for East and Southeast European Studies (IESES) |
| Depositing User: | Dr. Gernot Deinzer |
| Date Deposited: | 15 Jul 2026 06:16 |
| Last Modified: | 15 Jul 2026 06:16 |
| URI: | https://pred.uni-regensburg.de/id/eprint/67084 |
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