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The Impact of Corruption on Social Trust

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DOI: 10.1177/1532673X09341531

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 American Politics Research OnlineFirst, published on December 29, 2009 as
doi:10.1177/1532673X09341531

American Politics Research

XX(X) 1­–15
The Impact of Corruption © The Author(s) 2009
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DOI: 10.1177/1532673X09341531
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Sean Richey1

Abstract
I test the impact of governmental corruption on generalized social trust. Based
on prior research in comparative politics and criminology, I hypothesize that
increasing governmental corruption leads to decreasing beliefs that others
are trustworthy. To test my hypothesis, I combine aggregate state-level
data on convictions for governmental corruption with American National
Election Studies panel survey data with waves in 2000, 2002, and 2004. My
findings show a clear impact of greater corruption on levels of generalized
trust. I find that living in states with increased corruption lowers generalized
trust, while controlling for other known determinants.This research expands
our knowledge of how institutional actions influence generalized trust.

Keywords
government corruption, social trust, public opinion, state politics, social
capital, reciprocity, panel data

Introduction
What influence does governmental corruption have on generalized trust? The
beneficial effect of having generalized trust has been shown in many settings
(Putnam, 2007). The causes of generalized trust have mainly been found to
be involvement in voluntary associations and certain demographic categories
such as eduction (Rothstein, 2005). Thus far, research into the determinants

1
Georgia State University, Atlanta, GA, USA

Corresponding Author:
Sean Richey, Department of Political Science, Georgia State University, 38 Peachtree Center
Ave. Suite 1005, Atlanta, GA 30303-2514, USA
Email: srichey@gsu.edu
2 American Politics Research XX(X)

of generalized trust has not examined the impact of corruption to a great

extent. But recent research in comparative politics has found that govern-
mental corruption leads to a decrease in generalized trust. Based on this
­evidence, I hypothesize that increasing governmental corruption leads to
decreasing beliefs that others are trustworthy in the United States.
To test my hypothesis, I combine aggregate state-level data on convictions
for governmental corruption with American National Election Studies (NES)
panel survey data with waves in 2000, 2002, and 2004. These panel data,
combined with the aggregate data, which account for the period before the
survey was taken, allow a clearer take on causality than most research to
date. I find that living in states with increased corruption lowers social trust,
while controlling for other known determinants. My results suggest someone
living in a state that increased from one standard deviation below the mean to
one standard deviation above the mean in corruption decreases the expressed
likelihood of trusting most people by six percentage points, while holding all
else constant.
Many scholars have claimed that democracy can produce generalized
trust (e.g., Brehm & Rahn, 1997; Levi & Stoker, 2000; Putnam, 1993). They
argue that the level of institutional fairness will create an environment where
it is safe to trust those we do not know (Letki & Evans, 2005). For example,
Levi (1998) says “the trustworthiness of the state influences its capacity to
generate interpersonal trust” (p. 87). Most of this literature suggests that
­better institutions produce an environment where social trust can develop
(e.g., Letki, 2006). Yet some researchers have found no connection between
state structures and generalized trust (Uslaner, 2003). What is lacking from
this literature is a theory that would explain the relationship between institu-
tions and trust in individuals. My research shows how institutional actions
can connect with generalized trust, through the presence of corruption.
This is an important topic because generalized trust has vast beneficial
effects on social interactions (Fehr & Gachter, 2000). Trust is by far the most
common measurement of social capital (see, e.g., see Hardin, 2002, or
Harper, 2001). The benefits of social trust have been shown in many settings,
as societies with more trust are more efficient and better working, with more
normatively desirable properties such as equality and health (Hetherington,
1998; Kawachi, Kennedy, Lochner, & Prothrow-Stith, 1997; Knack &
Keefer, 1997; Uslaner, 2002). Some researchers have also found that institu-
tional arrangements correlate with social trust, such as income equality and
laws that permit widespread use of labor unions (Coleman, 1990; Edwards,
2004, Edwards & Foley, 2001; Knack & Keefer, 1997, Knack & Zak, 2002;
Levi, 1998; Rahn & Rudolph, 2005; Rothstein, 2000; Rothstein & Stolle,
Richey 3

2003; Stolle, 2001). But it may be that trusting societies create these fair
institutions rather than trust being created by them (Uslaner, 2002). We need
to investigate more fully how institutional performance influences trust. To
do so, this research investigates the possibility that institutional corruption
decreases generalized trust.

Corruption and Generalized Trust

Social capital is defined typically as generalized trust and norms of reciproc-
ity that facilitate coordination and cooperation for mutual benefit (Putnam,
2000). Putnam recently defined social capital as “social networks and the
associated norms of reciprocity and trustworthiness” (Putnam, 2007, p. 137).
Putnam (2000) has posited the beneficial role of voluntary activity in the
development of generalized trust. Besides voluntary activity, however, we
need to elucidate the other causes of generalized trust.
Corruption may be a negative influence on social trust, because there is a
large literature that details the negative influence of corruption on institu-
tional trust (Anderson & Tverdova, 2003; La Porta, Lopez-de-Silanes,
Shleifer, & Vishney, 1997). In many nations, such as Japan, trust in govern-
ment had reached a deplorable level by 2000 (Inoguchi, 2002). Many
researchers show that this distrust was chiefly caused by decades of scandals,
which were relentlessly covered in the media (Pharr, 2000). Examples of
officials taking bribes are everyday stories in modern mass media (Rose-
Ackerman, 1999). The massive bureaucracy and public-works projects that
are central to modern economies have commonplace corruption. The public
has reacted to corruption by losing trust in public officials (Pharr, 2000).
Chang and Chu (2006) clearly show the relationship between beliefs of
­corruption and distrust of government by using a structural equation model
that accounts for endogeniety. In sum, much research shows that corruption
lowers political trust.
Some researchers have examined this subject in comparative politics (e.g.,
Scholz & Lubell, 1998). For example, Seligson (2002) finds that corruption
lowers interpersonal trust in Latin America, and Stulhofer (2004) finds that
perceptions of corruption in Croatia correlates with lower generalized trust.
Rothstein and Eek (2006) provide evidence of the effect with an experiment.
The respondents were Swedish and Romanian college students. Sweden has
very low levels of governmental corruption and extremely high levels of
social capital, while Romania has the opposite. In each experiment, a ran-
domly selected half read a report on corruption. Both treatment groups
reported a lower level of generalized trust after reading that officials often
4 American Politics Research XX(X)

take bribes. Also, Uslaner (2003) notes that the correlation between World
Values Survey data on generalized trust and an independent nongovernmen-
tal organization’s measure of country-level corruption is strongly negative,
meaning corruption correlates with lower trust. While beneficial, I seek to
conduct a study into this relationship using data from the United States. By
examining how corruption in government affects generalized trust with
nationally representative panel data from the United States, this study
advances this burgeoning literature.
There is also relevant evidence from criminology that is supportive of the
potential negative relationship between corruption and generalized trust. A
major body of evidence in criminology suggests that crime victimization has
large effects on the victim’s perception of the society as a whole. Victims of
crimes have greater fear of crime (Skogan, 1987). Importantly, they increase
their fear past a level that would accurately reflect the true risk (Ferraro,
1995). Victims commonly distrust an entire society based on the actions of an
individual. For example, victims typically distrust the entire neighborhood
where a criminal attack took place (Rountree & Land, 1996). They also
increase their distrust of people from the same racial group as their attacker
(Skogan, 1995). For example, a White woman may distrust all Black men
after being robbed by one Black man. Another example shown by research is
that women victims of sexual harassment have lower trust in all coworkers,
even other women (Schafera, Huebnerb, & Bynum, 2006). In sum, it is com-
mon for victims of crimes to distrust society after being victimized. The cru-
cial point is that there is a spillover from the individual who did the crime, to
the society (Blount, 1995). Often this attribution is an error, but it still has a
profound influence on attitudes. Just because politicians accept bribes, it
does not mean that the average citizen is less trustworthy. But what is impor-
tant is that irrational decision making still affects behavior (Kahneman &
Tversky, 1979). If people make this attribution, then society will have less
generalized trust, whether or not it is a rational calculation of risk.
Based on this prior research, my hypothesis is that living in states with
greater arrests for governmental corruption decreases the expressed amount
of generalized trust.

Data and Method

My research uses 2000, 2002, and 2004 NES panel data. The 2000 NES
survey had a response rate of 86% with 1,807 respondents. From this first
wave there was a panel attrition rate in the 2002 NES of 74.4% to 1,346
respondents, and attrition in the 2004 NES was 63.4% to 840 respondents.
Richey 5

Table 1.  Summary Statistics

Variable Mean SD Min. Max. N

Trust 0.557 0.497 0 1 3,436
Objective corruption 35.485 28.014 0 97.75 5,409
Subjective corruption 0.179 0.65 −1 1 3,405
Volunteer 0.469 0.499 0 1 3,456
Political trust 1.507 0.589 0 3 3,444
Media usage 3.671 2.719 0 7 3,543
Ideology 4.377 1.528 1 7 2,928
Black 0.117 0.321 0 1 5,352
Male 0.438 0.496 0 1 5,409
Income 6.764 3.749 1 22 4,536
Age 47.166 16.935 18 97 5,382
Age2 2511.389 1752.989 324 9409 5,382
Education 4.29 1.62 1 7 5,388

Total attrition from the 2000 wave to the 2004 wave was 46.4%. Full infor-
mation about the sampling procedure, question wordings, and survey meth-
odology is available at the NES Web site.1 NES panel data were collected
by both face-to-face surveys as well as phone interviews. The NES data ask
the same questions each wave, allowing us to model changes in individuals
over time. These questions combined with aggregate data on levels of cor-
ruption allow for the adjudication of the relationship between corruption
and generalized trust. The summary statistics for all data used are given in
Table 1.

Dependent Variables
The question regarding the dependent variable trust was the following:
“Generally speaking, would you say that most people can be trusted (coded
one) or that you can’t be too careful in dealing with people (coded zero).”
This is a standard measure of generalized trust (Levi & Stoker, 2000), and
other researchers on this topic have used similarly worded questions (e.g.,
Seligson, 2002). Comparing the mean of this variable over the three waves,
the data climb from a mean of 53% of the respondents saying that they
trust most people in 2000 to 60% in 2004. These data are correlated but
show variation within the person. This shows that people have the ten-
dency to reply in the same manner every 2 years, but there are changes
over time.
6 American Politics Research XX(X)

Corruption Variables
I create a measure of changes in state-level corruption over time by using
data from annual Justice Department reports documenting the number of
convictions in public corruption investigations (Public Integrity Section
Criminal Division, 2006). The cases involve federal, state, or local officials
measured for each state. I summed the total convictions for each state for the
2-year period before the survey. For example, for the 2000 wave, I use
summed data by state from 1999 and 2000. Using data from before the sur-
vey was administered controls for the potential that a decrease in generalized
trust has caused more corruption arrests. Although this possibility may seem
unlikely, the NES panel data structure allows us to get a clear take causality,
without the endogeneity problems that plague much of the research of this
kind. See below for more on the benefits of the panel design and the method-
ology. There is a large variability between states in the levels of corruption,
and this allows us to test my hypothesis.
A couple of points about these data are in order. First, the Justice
Department only uses data that come from federal prosecutions. This
accounts for more than half of all cases, but it is important to note that
there are missing data for misdemeanor corruption. This does not pose
much threat to my inference because lacking nonfelony corruption data
should not mediate the relationship between generalized trust and felony-
level corruption. Although illegal, misdemeanor corruption is trifling.
These crimes are for small amounts, such as billing the city for taxi service
for personal use. Any serious violation of the public’s trust is considered a
felony in the United States. Thus, these data are a good measure of corrup-
tion in America.
A second limitation of these data is that it takes a prosecutorial staff willing
and able to bring charges for corruption to make it into these data (Seligson,
2002). If there is a large level of corruption, but no charges brought, the state
will not score highly in this measure. This is a well-known problem in crimi-
nology, called reporting bias (Felson, Messner, Hoskin, & Deane, 2002). The
standard approach to overcome this bias is also to report survey data on respon-
dents’ belief in corruption. This controls for the possibility that the respondents
have experienced corruption or know of corruption, but it is not being prose-
cuted in the state. The belief in levels of corruption was questioned with, “Do
you think that quite a few of the people running the government are crooked
(coded one), not very many are (coded zero), or do you think hardly any of
them are crooked (coded minus one)?” This question was asked in each wave.
Richey 7

Control Variables
I must also control for other known causes of generalized trust. For volun-
teering, the survey asked whether the respondent did any volunteer work in
the last 12 months, coded one if so and zero if not. Brehm and Rahn (1997)
show that a respondent’s general feelings toward government influences
social trust, so I include a measure of trust in the national government. Gov-
ernment trust is measured by how trustful the respondent is of national gov-
ernment to do what is right, coded from zero if not trustful, one if somewhat
not trustful, two if somewhat trustful, and three for basically trustful. Televi-
sion watching and having a conservative ideology have been shown to lower
generalized trust (Putnam, 2000), so I include these factors. Ideology is mea-
sured on a 7-point scale, conservative being the highest. I include a variable
on media usage, summing how many days in a week the respondent gets
political news from watching television nightly news. I also control for being
male, Black, income in $5,000 categories, education by degree attainment,
and age in years and its squared term, all of which have been shown to influ-
ence generalized trust (Brehm & Rahn, 1997).

Method
The data are over three waves for each respondent, and thus may be described
as longitudinal, also known as panel data (Woodbridge, 2002). Because the
dependent variable is nested within waves, I create a panel regression model
to account for the within-respondent and between-respondent variability.
This model accounts for changes in the same person over time. Traditionally,
this is written as

yit = α + X it B + µ i + ε it                  (1)

for i ∈ 1, . . ., N and t ∈ 1, . . ., Ti and where B is a matrix of parameters to

be estimated.2 Most important for this research is that this data structure
allows us to model how changes in state-level corruption influences indi-
viduals living in that state. Thus, because it is over time, it is not merely find-
ing that someone who lives in a state with high corruption has low trust. I am
testing the impact of living in a state with changing corruption levels on the
same individual over three survey waves. For example, someone living in a
state with high levels of corruption in 2000 can still show a positive change
in trust if his or her state decreases in corruption after 2000. The results below
8 American Politics Research XX(X)

are robust to other model specifications, including multilevel models and

logistic regression with robust standard errors.
One central question to all panel data models is the issue of autocorrela-
tion, which is the influence of prior lags of the dependent variable on later
iterations of it (Baltagi, 2001). This is important because as Drukker (2003,
p. 168) writes, “serial correlation in linear panel-data models biases the stan-
dard errors and causes the results to be less efficient, researchers need to
identify serial correlation in the idiosyncratic error term in a panel-data
model.” If there is serial correlation, researchers need to use a dynamic panel
recession model, such as an Arellano–Bond model.
Woodbridge (2002) developed a test for the presence of autocorrelation in
panel data. This test uses a first-differences model to test for autocorrelation,
which is written as

∆yit = ∆X it B + ε it .                     (2)

What the Woodbridge method does is that it estimates the matrix of

parameters B by regressing Δyit on ΔXit and obtaining the residuals εit (Druk-
ker, 2003). Woodridge (2002) shows that there is no serial correlation if the
residuals from the full model and a lagged model correlate at −.5, or formally
written that Corr(Δεit, Δεit−1) = −.5 With this knowledge, it is simple to test
the presence of autocorrelation in panel data by testing if Corr(Δεit, Δεit−1) =
−.5. The Stata command xtserial performs this test (see Drukker, 2003, for
more on this procedure). The results with these data show that there is little
autocorrelation as it rejects the null hypotheses at p = .12. Thus, I do not need
a dynamic model to estimate these results, the standard panel regression
model written in Equation 1 is efficient and unbiased.
In addition, another concern is that these data are clustered by states. It is
possible for this clustering to affect the results, because it may violate the
independence assumptions necessary for regression modeling. To account
for any effect from clustering, I use robust standard errors that are corrected
for state-level clustering (Rogers, 1993). This will account for certain respon-
dents being from the same state while still allowing us to model state-level
changes in corruption over time in the panel data (Rogers, 1993).

Results
Through statistical analysis of the data, I find a clear and consistent influ-
ence between corruption and generalized trust in all specifications reported
below.
Richey 9

Table 2.  Determinants of Generalized Trust

Variable 1 SE 2 SE 3 SE
Objective corruption −0.007* 0.003 −0.007* 0.003 −0.008* 0.004
Political trust 0.616*** 0.148
Volunteer 0.446* 0.187
Media usage −0.093* 0.047
Ideology −0.291*** 0.080
Education 0.627*** 0.069 0.437*** 0.085
Black −2.778*** 0.368 −3.357*** 0.551
Male 0.326+ 0.187 0.018 0.234
Income 0.093** 0.029 0.104** 0.035
Age 0.114** 0.033 0.104* 0.046
Age2 −0.001** 0.000 −0.001 0.000
Intercept 0.541*** 0.145 −6.046*** 0.843 −4.197** 1.219
Observations 3,436 2,876 2,064
Wald Λ2 4.67* 180.46*** 126.24***
–2 Log likelihood −2060.58 −1582.35 −1072.37
Note: Cells represent unstandardized coefficients and standard errors of a panel logistic
regression model for determinants generalized trust.
p < .10; *p < .05; **p < .01; ***p < .001

First, I show in Table 2 three panel logistic regression models, a base

model (Model 1), one that includes demographic variables (Model 2), and
another that also includes control variables for political beliefs and behaviors
(Model 3). In all models in Table 2, we see that the objective measure of
­corruption has a large and significant impact in lowering generalized trust.
Living in a state with an increase in convictions for felony corruption from
the previous 2-year period has a deleterious effect on generalized trust. This
result is robust to all three specifications. Thus, governmental corruption has
a profound negative influence on this crucial aspect of social capital.
For the political control variables in Model 3, we see that belonging to a
voluntary group is associated with an increase in trust. Having a conservative
ideology decreases the level of trust as does media usage. All these results
match previous literature. Political trust has a large negative impact in gener-
alized trust. This is an interesting result because this is not found in some
samples, and these results show this relationship needs to be investigated
further. The demographic variables have mostly strong effects in both ­Models
2 and 3 and all are signed in the expected directions. As has been widely
found, education increases trust. Also, the middle-aged generation has more
trust. I found a positive impact from income levels and a negative impact
from being Black. I found an inconsistent and small impact from gender. In
10 American Politics Research XX(X)

Table 3.  Determinants of Generalized Trust

Variable 1 SE 2 SE 3 SE
Objective corruption −0.007* 0.003 −0.007* 0.003 −0.008* 0.004
Subjective corruption −0.639*** 0.105 −0.518*** 0.110 −0.439*** 0.143
Political trust 0.499*** 0.150
Volunteer 0.436* 0.183
Media usage −0.088+ 0.046
Ideology −0.271*** 0.077
Education 0.574*** 0.066 0.401*** 0.082
Black −2.569*** 0.350 −3.217*** 0.531
Male 0.268 0.178 −0.019 0.226
Income 0.083** 0.027 0.094** 0.034
Age 0.119*** 0.032 0.103* 0.045
Age2 −0.001** 0.000 −0.001+ 0.000
Intercept 0.657*** 0.137 −5.618*** 0.807 −3.699*** 1.182
Observations 3,385 2,841 2,043
Wald Λ2 42.29*** 202.36*** 134.51***
−2 Log likelihood −2018.33 −1560.89 −1063.98

Note: Cells represent unstandardized coefficients and standard errors of a panel logistic
regression model of the determinants of generalized trust.
p < .10; *p < .05; **p < .01; ***p < .001

sum, the models in Table 2 perform as expected, and my hypothesis was

confirmed by these tests of data.
Also of interest is the relative effect of different levels of corruption. I use
the same control variables in Table 2 (Model 3) to measure the impact of dif-
ferent levels of corruption. This simulation holds the other independent vari-
ables at their mean and predicts the probability of generalized trust if one
lives in a state that changes from one standard deviation below the mean in
convictions for corruption to one standard deviation above the mean.3 This
simulation predicts the impact of various levels of corruption while control-
ling for the other determinants. A simulated person living in a state one stan-
dard deviation below the mean has a 61% predicted probability of generalized
trust (SE .016), while someone living in a state one standard deviation above
the mean has a 67% predicted probability (SE .014) while holding all else
constant. This change in corruption, ceteris paribus, results in a change of
around six percentage points in generalized trust. This suggests that govern-
mental corruption is one influence over whether citizens think other people
are trustworthy.
Table 3 shows that even when controlling for the respondent’s subjective
belief in corruption, the effect of state-level corruption over time is large and
Richey 11

Table 4.  Determinants of Generalized Trust

Variable 1 SE 2 SE 3 SE
Objective corruption −0.001* 0.000 −0.001** 0.000 −0.001* 0.000
Subjective corruption −0.076*** 0.016 −0.063*** 0.016 −0.050** 0.017
Political trust 0.060*** 0.014
Volunteer 0.046** 0.016
Media usage −0.011+ 0.006
Ideology −0.030*** 0.007
Male 0.033 0.023 −0.002 0.026
Age 0.015*** 0.003 0.013** 0.004
Age2 −0.000*** 0.000 −0.000* 0.000
Black −0.297*** 0.029 −0.378*** 0.045
Education 0.072*** 0.008 0.049*** 0.009
Income 0.010** 0.003 0.010*** 0.003
Intercept 0.579*** 0.024 −0.196* 0.080 0.028 0.144
Observations 3,385 2,841 2,043
Wald Λ2 24.85*** 779.95*** 456.21***
Note: Cells represent unstandardized coefficients and robust standard errors of a panel
regression model for determinants generalized trust. Standard errors corrected for clustering
by state.
*p < .05. **p < .01. ***p < .001.

significant, under all model specifications. Interestingly, there is a separate

strong effect from the respondent’s belief in corruption. This may be for two
reasons. First, the criminology literature is perhaps correct that this measure
picks up additional knowledge of changes in corruption that are not reflected in
the Justice Department data of convictions. Or, it may be a measure of the
individual’s personal experiences that are unrelated to the macro-level changes.
For example, even in a society with decreasing corruption, any one individual
in that society may experience an increase in corruption. Either way, this sub-
jective measure accounts for additional variance in the amount of trust. In sum,
both measures of corruption have a negative influence on generalized trust.
In Table 4, I examine the impact of corruption on generalized trust while
accounting for clustering of respondents by state. The models in Table 4
show a similar influence as before in every specification. The impact of cor-
ruption is robust to clustering on states. The impact of the other independent
variables is also similar to the previous models. This shows that the impact of
clustering is not a mediating factor in the relationships being modeled. These
results are also robust to dropping the subjective corruption variable while
using the robust standard errors corrected for state-level clustering. In sum,
12 American Politics Research XX(X)

every model specification shows that corruption has a strong negative impact
on generalized trust.

Conclusion
The findings show a clear impact of greater corruption on levels of general-
ized trust. I test the impact of governmental corruption with an aggregate
state-level measure of corruption combined with American National Election
Study (NES) panel data from 2000, 2002, and 2004. The results confirm the
hypothesis, as I find a large impact from corruption on generalized trust.
While controlling for other variables, I show that corruption reduces social
trust. The panel data structure ensures that this research did not simply find
that people in more trustworthy areas have less corruption. The results show
that governmental corruption may make the society seem untrustworthy. This
may help explain how institutional action influences trust. It suggests that
people attribute the untrustworthy behavior of politicians to people generally.
Further research should closely examine the influence of government on
trust. The policy implications of this research are clear but probably difficult
to carry out. It may be difficult to control corruption through more effective
law enforcement, because elites often benefit from it and may not want to
change. If successful, clean government programs can add to both the effi-
ciency of government and may also increase trust.

Declaration of Conflicting Interests

The author declared no conflicts of interest with respect to the authorship and/or
publication of this.

Funding
The author received no financial support for the research and/or authorship of this
article.

Notes
1. The NES Web site is at http://www.electionstudies.org/studypages/2000to2004me
rged/2000to2004merged.htm
2. Specifically, the models were run using Stata 10 and use the xtlogit command. See
Baltagi (2001) for more on panel data models and this notation.
3. This simulation was created by Clarify (King, Tomz, & Wittenberg, 2000) from
the results displayed in Table 2, Model 3.
Richey 13

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Bios
Sean Richey is an assistant professor in the Department of Political Science at
Georgia State University. He researches political behavior.

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