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Determinants of Trust in Institutions in Times of Crisis: Survey‐Based Evidence from the European Union
Author(s) -
Drakos Konstantinos,
Kallandranis Christos,
Karidis Socrates
Publication year - 2019
Publication title -
jcms: journal of common market studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.54
H-Index - 90
eISSN - 1468-5965
pISSN - 0021-9886
DOI - 10.1111/jcms.12884
Subject(s) - eurobarometer , downgrade , credit rating , sovereign credit , order (exchange) , european union , business , sovereignty , economics , demographic economics , financial system , economic policy , political science , credit risk , finance , credit default swap , computer security , politics , computer science , law
We employ Eurobarometer micro‐level data on trust in institutions, in order to explore its determinants, considering socio‐demographic characteristics, and macroeconomic indicators. The main contribution of our analysis is the investigation of the potential impact of sovereign credit rating episodes and the adoption of bail‐out programmes. We find that trust in institutions is substantially eroded in countries that experience downgrade episodes and participate in fiscal adjustment programmes while it is significantly strengthened following credit rating upgrades.