The cultural origins of institutional trust: The case of the European Central Bank
| Author | Federico M Ferrara,Stefania Secola,Siria Angino |
| DOI | 10.1177/14651165211048325 |
| Published date | 01 June 2022 |
| Date | 01 June 2022 |
| Subject Matter | Articles |
The cultural origins
of institutional trust:
The case of the
European Central Bank
Siria Angino
European Central Bank, Frankfurt am Main, Germany
Federico M Ferrara
European Institute, London School of Economics and Political
Science, London, UK
Stefania Secola
European Central Bank, Frankfurt am Main, Germany
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 indi-
cators of social trust at the level of Euro area sub-national regions. We show that indi-
viduals 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.
Keywords
European Central Bank, institutional trust, instrumental variables, regional culture, social
trust.
Corresponding author:
Federico M Ferrara, European Institute, London School of Economics and Political Science, Houghton Street,
London WC2A 2AE, UK.
Email: f.m.ferrara@lse.ac.uk
Article
European Union Politics
2022, Vol. 23(2) 212–235
© The Author(s) 2021
Article reuse guidelines:
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DOI: 10.1177/14651165211048325
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Introduction
Trust in policy-making institutions is an essential aspect of domestic and international
governance. Institutional trust is critical because the efficacy and legitimacy of policy-
making institutions depend on it (Dellmuth and Schlipphak, 2020; Zürn, 2018). Many
studies have analysed the determinants of trust in domestic and international institutions.
A growing body of research in this area has focused on the sources of trust in central
banks, and especially the European Central Bank (ECB) (e.g. Bergbauer et al., 2020;
Bursian and Fürth, 2015; Hayo and Neuenkirch, 2014; Roth et al., 2014; Roth et al.,
2016; Roth and Jonung, 2020; Wälti, 2012). Notably, most attention has been devoted
to assessing the socio-economic determinants of trust in central banks at the individual-
and country-level. Scholars have neither systematically considered the non-economic
determinants of trust in the ECB, nor have they attempted to shed light on the patterns
of sub-national regional heterogeneity in central bank trust in the Euro area. This
article aims to fill this gap by addressing the following research question: do cultural dif-
ferences at the regional level affect public trust in the ECB?
To answer this question, our examination combines insights from research on
European public opinion (e.g. Bechtel et al., 2014; Dellmuth and Tallberg, 2020;
Hooghe and Marks, 2005; Inglehart and Norris, 2016) and cultural economics (e.g.
Guiso et al., 2004; Guiso et al., 2006; Knack and Keefer, 1997; Tabellini, 2010). We
hypothesise the trust in the ECB is not only about the assessment of the output perform-
ance of the institution, but also about cooperative expectations that are ingrained in sub-
national regional cultures. In essence, we argue that people residing in areas with higher
localised cultural predispositions for cooperative behaviour are more likely to display
trust in joint European institutions. Importantly, as highlighted by Hobolt and De
Vries (2016, 421), previous studies assessing the effect of culture and identity on trust
in the European Union (EU) and its institutions have often relied on measures that are
endogenous to EU support. This article employs a research design that overcomes this
limitation.
To measure trust in the ECB, we rely on a new dataset of citizens’perception and
knowledge about the ECB. Data were collected in all the 19 countries of the Euro area
in 2016, 2017 and 2018. To measure cultural traits across Euro area sub-national
regions, we follow previous studies in the economics literature (e.g. Beugelsdijk and
Schaik, 2005; Tabellini, 2010) and quantify cultural differences with indicators of
regional social trust (i.e. the percentage of people who state that, generally speaking,
most people can be trusted) from the European Social Survey.
The key difficulties in estimating the causal effect of culture on institutional trust are
given by reverse causation and omitted-variables bias. To overcome this endogeneity
issue, we resort to an instrumental variable approach. We take inspiration from the strat-
egy advanced by Tabellini (2010) and rely on historical data to isolate the exogenous
component of regional social trust. In particular, we use data on institutionalised con-
straints on the decision making powers of chief executives in the 1600–1850 period
and literacy rates at the end of the 19th century to build a measure of social trust that
does not suffer from reverse causation or omitted variable bias.
Angino et al. 213
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