Policy-making, trust and the demand for public services: Evidence from a nationwide family planning program

Trust in institutions is a key driver of the demand for government services, and in turn, the way these services are delivered affects trust. We study a large-scale family planning campaign in which more than 300,000 Peruvian women were sterilized. Many of these are alleged to have been performed without appropriate or informed consent. Using a difference-in-difference strategy, we show that subsequent disclosures about the alleged sterilizations reduced usage of contraceptive methods, pre-natal and birth delivery services, and -more generally- the demand for medical services and that child health worsened as a result. The results persist for at least 17 years after the information disclosure and are mainly driven by those who strongly supported the government at baseline, i.e. disappointed voters, and not by those who share demographic characteristics with the alleged victims. Learning about government mistreatment of citizens undermined trust in institutions. Our results highlight the relevance of how policies are implemented and communicated to citizens for ensuring their long-term success.