A Cross-country Study of Factors Affecting the Formation of Trust in Formal Institutions

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Abstract

The formation of nation-states in modern days has increased the importance of governments which play vital role in many social phenomena. Institutional trust in general and trust in formal institutions in particular is the cornerstone of development and a requirement of modern world. Trust in formal institutions increases the impact of governments and their productivity. The present paper examined the factors affecting the formation of trust in formal institutions. The research method was a secondary analysis and in doing so, the data of World Values Survey (WVS), the Survey of Good Governance (WGI), and the data of Freedom House for 2000-2005 were used. Countries were classified in terms of their trust in formal institutions into six categories. The findings revealed that there was a significant difference between these six groups in terms of corruption control, rule of law, and government efficacy.  However no significant differences were found between these six groups of countries in terms of election democracy, political rights, civil rights, and social participation. In multiple regression analysis, the composite index of good governance, social participation, and political rights were used. The variables explained 41 percent of variations in the dependent variable namely trust in formal institutions. In addition, it was found that good governance and political rights had more explanatory power to explain the trust in formal institutions.

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