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This article examines patterns of popular trust in political and public institutions in Nepal. We ask to what extent such trust is linked, on one hand, to citizens' social and political identities, and on the other hand, to citizens' perceptions of institutional performance. Our findings demonstrate that trust in public institutions varies extensively. Trust is high for a number of professional institutions, such as schools and hospitals. It is also quite high for local government institutions. Trust in the parliament and the government is much lower. Furthermore, the analysis reveals a weak relationship between institutional trust and identity variables. Demographic and social characteristics of participants, such as caste, and religious and political affiliations, have little significance in explaining the level of citizens' trust in political and public institutions. Such trust primarily depends upon how citizens assess the performance of these institutions. Hence, patterns of institutional trust depend on how participants evaluate the current macro-political situation in Nepal, whether recent political changes are judged to have gone in the right direction. In a more general and comparative perspective our findings from Nepal fit with a performance-based theory of institutional trust, while, to a large extent, they disconfirm identity-based explanations.

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The existing literature on institutional trust leads us to expect that institutional trust is determined by institutional performance. In the context of three South Asian countries (Bangladesh, Nepal and Sri Lanka), we find the opposite – that despite poor performance of the civil service, there is high institutional trust. In this study we examine whether such mismatch can be explained by an authoritarian cultural orientation, which generates unquestioning obedience and loyalty and may contribute to inflated institutional trust in the civil service of these countries.

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