Polarization in Trust

In this paper we present a theoretical model in which citizens have differing beliefs about the externality costs of their individual actions. We show that this leads to heterogeneity in policy opinions and can drive a wedge between what individuals expect the government to deliver and the policies that are eventually enacted. Second, this heterogeneity will also drive a wedge between what individuals themselves deem good behaviour and what the rest of society actually does. In our theoretical model the former is a source of institutional distrust, whilst the latter feeds social distrust. Our empirical analysis suggests that these `polarisation in trust’ dynamics come to the surface when policy issues are highly salient. In an online survey experiment conducted in four European countries we find that the first wave of the Covid-19 pandemic (and ensuing strict government measures) led to a decline in institutional trust predominantly among citizens who were not worried about the virus, whereas social trust declined (more) for concerned individuals.