GDP growth appears to be on a global slowdown. This column uses survey data from individuals across 161 countries since 1990 and data for the US going back to 1958 to provide evidence of a robust connection between citizens’ experiences with economic growth and their perceived trust in government. As the state relies on citizen trust for much of what it does, more research is needed to understand how trust in government can be maintained if slow growth is the new normal.
What would sustained slow growth mean for governments and policymaking? GDP growth appears to be on a global slowdown, which started after the financial crisis of 2008 and was further exacerbated by the global pandemic. The IMF’s World Economic Outlook suggests global growth will average 3% for most of this decade, relative to around 4% between 2000 and 2019. The situation could be even worse for developing economies, where growth is expected to decline by a third in this decade to 4% a year, from 6% a year over 2000-10. Economists now refer to ‘secular stagnation’ when discussing the prospects for future growth (World Bank 2023).
Apart from stagnating living standards, slow growth will have multiple consequences. Citizens have come to expect and rely on the provision of services by their governments (from healthcare to unemployment insurance to pensions), which will be increasingly harder to finance. But – perhaps more fundamentally – the perception by citizens of what the state can provide and confidence in its ability to deliver appear to be closely associated with economic performance.
A decline in perceptions of trust in government has been well-documented. This is happening even in countries with high income and strong state capacities and democratic institutions (Herrera and Trombetta 2024). The US is a notable case in point. Across parties, trust has been at its lowest over the last decade, averaging around 20% of survey respondents finding the government trustworthy, compared to over 70% in the 1960s (Pew Research Center 2024). Much ink has been spilt in trying to explain this trend, especially in political science (Levi and Stoker 2000, Zmerli and Van der Meer 2017). But whether this is linked to growth has been little explored.
Some economists have connected trust across various institutions – from national governments to the IMF and World Bank – to perceptions of economic performance (Goodhart and Vu 2024). It stands to reason that, when economies thrive or falter, citizens attribute some of these successes or failures to their governments, especially if growth leads to material changes in citizen welfare.
Growth experiences and trust in government
In new research (Besley et al. 2025), we find a robust connection between citizens’ experiences with economic growth and their perceived trust in government. There are many possible datasets which could be used to study this. We decided to harmonise ten established, pre-existing datasets to compile as large a dataset possible based on surveys of 2.8 million individuals across 161 countries with responses since 1990. Having done so, we plotted the data across countries as shown in Figure 1. The striking finding is a positive association between average growth performance over the last ten years and trust in the national government. Moreover, if we look at the countries in the top right-hand corner of the figure, they are a surprising group of countries such as Ethiopia, Qatar, China, and Rwanda. These countries have sustained spells of growth over their recent history as well as extremely high levels of trust in government.
The picture among so-called ‘advanced democracies’ that have experienced low growth is also striking: countries such as Japan, Spain, and Greece have some of the lowest levels of political trust globally.
Figure 1 Trust in government and economic growth across countries
Note: trust in government and 10-year growth refer to pooled country averages between 2009-2019. Data comes from the Maddison Project Database and our harmonized dataset. Trendline is robust to conditioning on initial national income levels per capita. Population weights are used when taking country-averages of the survey data.
Perhaps a little less visible in Figure 1 without drilling down into the data is how richer democratic countries fair when it comes to trust in government. Following a long line of research in political economy (Acemoglu et al. 2005, Besley and Persson 2011, Rodrik et al. 2004), while we might have expected a nexus between ‘good’ institutions and trust in government, this is clearly not evident in the data. Moreover, prosperous countries tend to have lower levels of political trust. We label this phenomenon the ‘trust paradox’.
Cohort experiences of growth within countries
A better way to look at the data than Figure 1 is to exploit the fact that individuals in the same country have different growth experience depending on when they were born. Some cohorts are ‘lucky’, being brought up when growth is high, while others are less fortunate. We therefore asked whether this relates to perceptions of trust in government?
A nice illustration of our main finding comes from looking at the experiences of different birth cohorts in the US. Using data from the American National Election Studies (ANES), we gauge trust in the federal government with surveys collected as far back as 1958 for individuals who were born as early as the 1880s. We then plot the average trust in these different birth cohorts against their experiences with economic growth. The result of doing so appears in Figure 2, which reveals a strong positive relationship between political trust and growth experiences across cohorts born since the end of the 19th century.
Figure 2 Cohort differences in trust in government and growth in the US
Note: survey year is indicated above each panel. Data for the left-hand panel comes from the American National Election Studies (ANES). Data for the right-hand panel comes from a harmonized dataset on trust in government (due to missing data in the ANES on trust in government post-2008), comprised of the Afrobarometer, Arabarometer, Asiabarometer, European Social Survey, Gallup World Poll, Integrated Values Survey, Latinobarometer, Life in Transition Survey, South Asia Barometer and the World Justice Project. We calculate individuals’ lifetime growth experiences as in Malmendier and Nagel (2011), and then take decadal cohort averages of growth experiences and trust in the federal government for the survey years 1958 and 2018. Triangle markers in the right-hand panel illustrate new cohorts relative to 1958. Sample is limited to decadal cohorts with at least 50 unique respondents.
In the data from the 1958 survey displayed in the left panel, we see that younger cohorts had experienced much stronger growth, being alive during the post-war boom compared to the ‘depression babies’ that preceded them (Malmendier and Nagel 2011). Moreover, this conforms to the narrative that substantial public investments from Roosevelt’s New Deal bolstered the social contract, with knock-on effects for trust in the federal government (Aizer et al. 2024, Caprettini and Voth 2023). This makes sense if political trust is built on the back of policies that support economic growth.
The right-hand panel comes from similar surveys collected 60 years later. But now there is a reversal of fortune between the growth experiences of the younger and older birth cohorts. In contrast to the 1958 survey, the younger cohorts (those born in the 1990s) have experienced meagre growth following events such as the 2008 financial crisis, while older cohorts (those born in the 1930s) have experienced stronger growth. Yet, the striking fact is how this shows up in perceptions of political trust, which continues to positively correlate with growth experiences. This is true even though all cohorts in 2018 are now less trusting of the federal government.
In general, we find that the growth experience of individuals based on cohort-level variation within countries across several societies is robustly and positively associated with trust in government. Our econometric analysis exhaustively reveals a highly robust relationship based on a sample of over 2 million individuals. This relationship holds across all major regions of the world. There is no similar finding when we look at growth experiences and interpersonal trust; nor does growth associate with non-state institutions such as religious organisations. But individuals with stronger growth experiences do report greater feelings on their income levels and satisfaction with their standard of living.
Many other countries have also experienced a similar positive association between economic growth and trust in government, both during booms and busts. In Figure 3, we look at four countries that have experienced stagnation (Greece, Japan, Spain, and Venezuela) and four that have experienced strong growth (China, Hong Kong, Singapore, and Taiwan). Looking at survey data from 2018 and 2019, we find a strong relationship between growth experiences and trust in government.
Japan is a notable example where older cohorts experienced major growth following a post-war boom versus younger cohorts today that are living through the country’s prolonged ‘lost decades’, with the growth rate hovering around a meagre 1%. Unfortunately, many countries look like they are following suit.
Figure 3 Growth experiences and trust in government across cohorts within countries
Note: data comes from our harmonized dataset. We calculate individuals’ lifetime growth experiences as in Malmendier and Nagel (2011) and then take decadal cohort averages of growth experiences and trust in government. We use data for 2019 as a snapshot as the last year of available data from our harmonized dataset, except for China and Singapore where we could only use data up until 2018. We restrict the sample to decadal cohorts with at least 50 unique respondents. Trendline for China is robust to dropping the 1930s cohort. We drop the 2000s cohort due to more limited sample sizes for very young individuals in the data, but raw patterns remain unchanged with their inclusion.
Lessons for the global growth slowdown
The importance of growth for building trust in government through growth is already part of the political discourse. For example, former US Secretary of Transportation Pete Buttigieg (2020) states: “[B]etween 1948 and 1973, real GDP grew 170 percent in the United States and per capita income nearly doubled…the period of economic expansion came to be viewed as a golden age of capitalism. And with government largely delivering for people in a way they had not seen before, these years were also not coincidentally an age that saw Americans two to three times more likely to express trust in their government than they have in more recent years” (p. 150). Our results suggest that this is a global phenomenon across political regimes and levels of economic development.
But does it matter? Our answer is yes. The state relies on citizen trust for much of what it does. A case in point is the response to the recent global pandemic where governments struggled to obtain citizen compliance with lockdowns and vaccination programmes (Besley and Dray 2024). Paying taxes is often argued to be intimately related to trust in government (Besley 2020, Levi 1988), and there is further evidence of links between political trust and climate action (Dechezleprêtre et al. 2025).
Governments are frustrated by their apparent inability to generate growth. But perhaps the stakes are even higher than they think. Not only does low growth have direct economic consequences such as strains on public finances and less job creation, but this could also undermine public trust, leading to a vicious cycle where low growth fosters low trust in government, making it harder for governments to obtain compliance with growth-enhancing policies (Frey and Brezzi 2022). On top of material consequences, low growth could threaten a key pillar of support for the social contract. More research is needed to understand how trust in government can be maintained if slow growth is the new normal.
Source : VOXeu
