The cultural origins of institutional trust: The case of the European Central Bank

Abstract

Does culture have a causal effect on institutional trust? We answer this question by assessing the non-economic determinants of public trust in the European Central Bank. To analyse institutional trust, we employ a novel dataset of citizen perceptions and knowledge about the European Central Bank. Cultural traits are measured by indicators of social trust at the level of Euro area sub-national regions. We show that individuals living in regions with lower social trust systematically exhibit less trust in the European Central Bank. An instrumental variable approach based on historical variables of education and political institutions supports a causal interpretation of our findings. These results are robust across different model specifications and measures of trust.

Drivers of trust in the ECB during the pandemic

“…Third, our results on the importance of financial knowledge add new evidence to studies which examine the role of knowledge and transparency for trust in the ECB (van der Cruijsen and Eijffinger 2010; Ehrmann, Soudan, and Stracca 2013;Hayo and Neuenkirch 2014;Mellina and Schmidt 2018;Kaltenthaler, Anderson, and Miller 2010;Angino, Ferrara, and Secola 2022;Horvath and Katuscakova 2016;Brouwer and de Haan 2022).…”

“…Bergbauer et al (2020) find that trust in the ECB depends positively on consumers' satisfaction with the EU's performance, especially during the financial crisis, as well as on their attachment to values of EU integration, trust in national government, and support for the euro. In addition, Angino, Ferrara, and Secola (2022) show that trust in the EC and the EP -which captures individual attitudes towards other European institutions -are driven by similar factors as trust in the ECB, such as social trust. Consumers who perceive lack of accountability are most likely to distrust the ECB (Kaltenthaler, Anderson, and Miller 2010).…”

Central Bank Communication with the General Public: Promise or False Hope?

“…For instance, both Farvaque, Hayat, and Mihailov (2017) and Bursian and Fürth (2015) report that respondents' political orientation, their education level, and their employment status are all key factors explaining trust in the ECB. Angino, Ferrara, and Secola (2021) find that individuals living in regions where people do not trust other people systematically exhibit less trust in the ECB.…”

Instinctive versus Reflective Trust in the European Central Bank

“…Trust in institutions, including central banks, has been explained by socio-economic and demographic factors as well as by the assessment of institutional features such as performance or integrity (Ehrmann et al (2013), Murtin et al (2018)), by trust in related bodies 1 and by other slow-moving determinants such as culture (Angino et al (2021)). However, especially when it comes to analysing central bank trust, the role of cognitive processes has largely been neglected.…”