Public policy and political trust within unequal societies: evidence from India

Deeply entrenched socioeconomic inequalities complicate public service delivery, especially for local governments in developing countries. In jurisdictions characterized by deep economic cleavages, it can be exceedingly difficult for local governments to fund and deliver public works that satisfy most citizens’ needs in a timely and efficient manner. However, one of the tragic consequences of extreme inequality is that it reduces people’s trust in their government. Here, we hypothesize that policy interventions that encourage the co-production of local public works, such as bottom-up, demand-driven rural development programs, help neutralize the negative effect of inequalities on trust in local governance institutions by improving perceptions of state responsiveness and building social capital. Using quasi-experimental methods, large-N panel data, and the case of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) – the world’s largest rural employment guarantee initiative – our analysis finds support for these expectations.