The virtuous loop of quality of government (QoG) and institutional trust in OECD  countries, 2006-2021 and culture

Ahmed Hussain; Jo Ritzen

The virtuous loop of quality of government (QoG) and institutional trust in OECD countries, 2006-2021 and culture

Ahmed Hussain, Jo Ritzen

Research output: Working paper / Preprint › Working paper

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Abstract

We explore empirically the relationship between trust in government and the quality of government (QoG) with a dynamic panel model for the period 2006-2021 in the 38 OECD countries, with reverse and lag specifications while incorporating a range of social, political, and economic factors as explanatory variables. The results show a clear positive mutually reinforcing dynamic between QoG and trust in government when the social, political and economic factors are included. Trust in government with a three-year lag is positively related to QoG. Foreign-born population with a three-year lag is negatively associated with QoG. The other way around: trust in government is affected by the QoG in the same year. Economic decline reduces trust in government.
QoG and trust appear to be embedded in culture (measured with the Hofstede indices). Power distance is negatively related to both QoG and institutional trust. The association between individualism and QoG is positive, while long-term orientation and indulgence positively impact trust.

Original language	English
Publisher	UNU-MERIT
Publication status	Published - 18 Sept 2023

Publication series

Series	UNU-MERIT Working Papers
Number	029
ISSN	1871-9872

JEL classifications

d31 - Personal Income, Wealth, and Their Distributions
d73 - "Bureaucracy; Administrative Processes in Public Organizations; Corruption"
d78 - Positive Analysis of Policy-Making and Implementation
e61 - "Policy Objectives; Policy Designs and Consistency; Policy Coordination"
h50 - National Government Expenditures and Related Policies: General
h83 - "Public Administration; Public Sector Accounting and Audits"
i38 - "Welfare and Poverty: Government Programs; Provision and Effects of Welfare Programs"
o10 - Economic Development: General
z13 - Economic Sociology
z18 - Cultural Economics: Public Policy
z19 - Cultural Economics: Other

Keywords

Quality of Government
Institutions
Trust
Culture
Diversity
Inequality
Economic stability

Access to Document

wp2023-029Final published version, 950 KBLicence: CC BY-NC

https://www.merit.unu.edu/publications/wppdf/2023/wp2023-029.pdfLicence: CC BY-NC

Cite this

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N2 - We explore empirically the relationship between trust in government and the quality of government (QoG) with a dynamic panel model for the period 2006-2021 in the 38 OECD countries, with reverse and lag specifications while incorporating a range of social, political, and economic factors as explanatory variables. The results show a clear positive mutually reinforcing dynamic between QoG and trust in government when the social, political and economic factors are included. Trust in government with a three-year lag is positively related to QoG. Foreign-born population with a three-year lag is negatively associated with QoG. The other way around: trust in government is affected by the QoG in the same year. Economic decline reduces trust in government. QoG and trust appear to be embedded in culture (measured with the Hofstede indices). Power distance is negatively related to both QoG and institutional trust. The association between individualism and QoG is positive, while long-term orientation and indulgence positively impact trust.

AB - We explore empirically the relationship between trust in government and the quality of government (QoG) with a dynamic panel model for the period 2006-2021 in the 38 OECD countries, with reverse and lag specifications while incorporating a range of social, political, and economic factors as explanatory variables. The results show a clear positive mutually reinforcing dynamic between QoG and trust in government when the social, political and economic factors are included. Trust in government with a three-year lag is positively related to QoG. Foreign-born population with a three-year lag is negatively associated with QoG. The other way around: trust in government is affected by the QoG in the same year. Economic decline reduces trust in government. QoG and trust appear to be embedded in culture (measured with the Hofstede indices). Power distance is negatively related to both QoG and institutional trust. The association between individualism and QoG is positive, while long-term orientation and indulgence positively impact trust.

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KW - Trust

KW - Culture

KW - Diversity

KW - Inequality

KW - Economic stability

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