The great recession: Political trust, satisfaction with democracy and attitudes to welfare-state redistribution in Europe

This paper investigates the impact of economic vulnerability and economic recession on political trust, satisfaction with democracy and attitudes towards welfare-state redistribution across different EU countries. I argue that these set of attitudes are crucial in defining public support for the European model of social capitalism, historically characterized by the combination of national democratic institutions and extensive welfare provision. I further content that the impact of recession on citizens’ support for national political institutions could have been particularly severe in Euro-zone countries since national governments inside the European Monetary Union lack standard policy instruments to combat recession. Following the economic voting literature, I distinguish between recession effects that are triggered by the individual experience of economic hardship (egocentric effects) and those triggered by citizens’ dissatisfaction with the economic situation of the country as a whole (sociotropic effects). Applying two-step regression techniques to a pool of the 2004 and the 2010 rounds of the European Social Survey, I investigate individual-level egocentric and sociotropic effects on political trust, democratic satisfaction and attitudes to redistribution, as well as direct macro-level recession effects on the typical citizen for both countries inside and outside the Euro zone. I find significant recession effects for political trust and satisfaction with democracy in Euro-zone countries. The erosion of political trust and satisfaction with democracy is sizeable in Ireland, Slovenia and Spain and reaches truly alarming proportions in the case of Greece. The evidence on recession effects on attitudes to redistribution is, however, inconclusive. Implications are discussed.