Why Citizen Trust Persists Despite Governance Failure: A Compensatory Trust Framework for Sub‐National Governance

ABSTRACT This study addresses a central paradox in public administration with particular relevance for Public Administration and Development scholarship: why does citizen trust in subnational governments often remain resilient despite chronic systemic failure? Theoretically, we expand this scholarship in three important ways. To begin with, earlier studies have recorded that informal practices persist despite the decentralisation of governance. We specify the micro‐level mechanisms through which informal and formal systems interact. Second, whereas existing studies often treat trust as unidimensional, our bimodal framework explains why cognitive and affective trust react differently to institutional failure. In contrast to others, the CTF shows how PSM and SC function as interdependent compensating forces, as opposed to a single‐factor explanation attributing resilience to either culture or bureaucracy quality. Drawing on a mixed‐methods approach (survey n = 180; interviews n = 28) from two Union Parishads in Bangladesh, we propose and test the Compensatory Trust Framework (CTF). This framework integrates Principal‐Agent (PA) theory, Public Service Motivation (PSM), and Social Capital (SC) theories to explain how legitimacy is maintained under conditions of ‘limited statehood’ in postcolonial administrative contexts‐a question of growing concern in PAD's Global South research agenda. Our findings reveal a critical bimodal tension: while cognitive/institutional trust is low due to structural accountability gaps (PA failure), affective/relational trust remains high, sustained by the bureaucratic professionalism of appointed officials (PSM) and dense communal ties (SC). These factors function as compensatory mechanisms that buffer against the total collapse of public confidence. The CTF provides a dynamic model of legitimacy in the Global South, through specifying the interactional pathway by which informal mechanisms substitute for formal systems, which responds to recent PAD calls for postcolonial theoretical development. We recognise limitations for causal inference with our cross‐sectional design and discuss implications for governance reform in fragile institutional contexts.