Governments are losing trust: Can sound policies reverse it?

Good macro management could suffice. Keep inflation in control

- CLIVE CROOK is a Bloomberg Opinion columnist and member of the editorial board covering economics.

Social spending increases trust but only if it's not inflationary.

(REUTERS)

Across much of the industrial world, trust in government is low and declining. Why is this happening and why exactly does it matter? An unusually thorough new study looks at these questions and finds answers that are somewhat unexpected and, in one way, more disturbing than you might have guessed.

The fact of diminished trust is hardly a revelation, least of all in countries such as the US, where anti-establishment populists have turned politics upside down and elite expertise has not just distrusted but disdained. Last year, a survey found that fewer than one is six Americans expect Washington to do the right thing “nearly always” (1%) or “most of the time” (15%). At the turn of the century, such measures for the US were more than twice as high. Across the Organization for Economic Cooperation and Development, many other countries (including the UK, Netherlands, Spain, New Zealand and Chile) have also seen trust decline. But in others (such as Finland, Ireland, Portugal and Mexico) trust has increased. Levels of trust, as opposed to rates of change, also vary a lot. These widely differing patterns make it possible to examine causes.