Determinants of generalized trust: Economic, Institutional, and personal factors.

Abstract

Background: Generalised trust matters for social cohesion, economic exchange and institutional life, but there is still disagreement about the conditions under which it emerges. This article studies whether the same economic, institutional and personal factors are linked to three forms of trust, namely trust in most people, trust in people met for the first time and trust in neighbours.

Methods: The analysis uses individual data from the seventh wave of the World Values Survey, collected from 2018 to 2022, together with national economic and institutional indicators. The final models cover 49 countries. Trust in most people is estimated with a binary probit model, while trust in people met for the first time and trust in neighbours are estimated with ordered probit models. The main estimates use standard errors clustered by country and are compared with mixed-effects models, correlated random effects models and linear specifications.

Results: Income inequality is the country-level factor most consistently linked to lower trust, and this association appears in the three trust domains. At the individual level, personal income, age, gender and education are also associated with trust. Education follows a curved pattern, with lower trust at intermediate levels and higher trust again among those with the highest education levels. National income is positively associated with trust in most people and in people met for the first time, but not clearly with trust in neighbours. Institutionalised democracy shows some evidence of a possible substitution between formal institutions and neighbourhood trust, although this result is not stable in all models. Religious importance is associated with lower trust in most people but higher trust in neighbours. Religious tolerance is positively related to trust, mainly through differences between countries rather than differences between individuals within the same country.

Conclusions: Trust should not be treated as a single attitude with the same determinants in every context. Some factors, especially inequality and personal income, are linked to trust across several domains, while others depend on the social distance between the people involved. Policies aimed at strengthening trust therefore need to be clear about which type of trust they seek to build.