Inequality and Governance in Unstable Democracies: The Mediating Role of Trust

Understanding how global rises in economic inequality are affecting governance regimes across the world is a critical question to the social sciences today. Historically, sharp increases in inequality have generated drastic changes in political and social order (Gurr 1970, Skocpol 1979, 1994). However, existing knowledge about the causal effects of inequality on governance is surprisingly limited. At the macro-level, studies show in general a negative association between economic inequality and the quality of governance institutions (Acemoglu and Robinson 2006, Rothstein 2011), but have not reached a consensus about the causal mechanisms that may explain this relationship. At the micro-level, the evidence so far reveals mixed effects of inequality on a number of factors that shape governance institutions, including voting behaviour, attitudes towards democracy and the rule of law, civic participation, collective mobilisation and political violence (Alesina and La Ferrara 2005, Bardhan 2005, Solt 2008). These mixed effects are not surprising because the ways in which citizens participate in the political arena and mobilise collectively to drive change are moulded by inequality itself. One case in point - which we currently observe in many parts of the world - is when rises in inequality allow the capture of political decision-making processes by those that benefit from them, eroding social relations between groups and trust in institutions (Piketty 2013, Stiglitz 2013). However, despite the enormous consequences of these complex relationships for global stability and democratic values, there is to date limited knowledge about the factors that may mediate the relationship between rising inequalities and governance outcomes. When this evidence exists, it is restricted to a handful of countries. The main aim of this project is to explore how one key factor -trust- mediates the relationship between inequality and governance in settings where democratic institutions may be unstable or under threat.

The project is organised around three thematic areas: (i) how trust within and between social groups and towards governance institutions emerges and evolves in contexts of rising inequality; (ii) how trust in unequal societies shapes governance outcomes through two intervening factors - political behaviour and social mobilisation; and (iii) the pathways through which changes in such intervening factors may sometimes result in inclusive governance outcomes, but in the breakdown of governance at other times. Each of these areas will incorporate detailed theoretical and empirical analyses at the subnational level in four countries -Colombia, Ethiopia, Pakistan and Spain- affected by rising inequalities and characterised by unstable or strained democratic institutions.

The absence of systematic qualitative, quantitative and behavioural data has hindered progress in understanding the links between inequality, trust and governance in countries outside North America and Western Europe. The project seeks to compile a number of unexplored data sources and collect new data comparatively across these other countries in order to fulfil this critical gap. This data collection will involve: (i) comparative individual-level surveys to understand contemporaneous levels of trust, and attitudes towards formal and non-formal local governing institutions, (ii) behavioural experiments under different inequality and political contexts to better understand the formation of trust under different scenarios, (iii) indepth interviews with key political actors in government, members of social movements and citizen organisations to understand how inequalities affect perceptions of governance and strategies of political mobilisation, and (iv)detailed compilation of archival data that will allow us to better understand how inequalities and attitudes have evolved across time and how different historical junctures may shape the governance outcomes we observe today.

This project aims to generate evidence that will support grassroots and international organisations and governments to work in contexts of rising inequalities and where democratic structures may be unstable or under threat. Impact will be achieved by building and maintaining networks to ensure that research findings influence agendas and policies at local, national and international levels. At the local and national levels, we will engage with civil society organisations (CSOs), practitioners and policy-makers working to build inclusive governance institutions and social trust and cohesion. Internationally, we will work with organisations and donors, such as DFID, USAID, the UN, the World Bank and international NGOs, by influencing long-term international agendas around good governance and institutional solutions to unstable democracies.

We will achieve these impact goals in a number of ways. First, we will build on long-term collaborations between the research team and NGOs and CSOs in Colombia, Ethiopia, Pakistan and Spain (details provided in the Pathways to Impact section). NGOs and CSOs play important roles in supporting and shaping individual perceptions and attitudes and the emergence and evolution of social movements, as well as acting as intermediaries between government institutions and different social groups. A key area of impact of this project will be to share knowledge to better align the goals of NGOs, CSOs and associated social movements with the latest research findings on how inequality interacts with trust to shape governance outcomes in unstable democracies. Collaborative arrangements will include planning and designing the research, sharing data and evidence, feeding project findings into planned interventions, and jointly influencing key national and local policy processes. These arrangements will also provide opportunities for shared learning and capacity building within the NGOs and CSOs involved in the project. Knowledge exchange activities will begin at the initial workshop at IDS, where we will map the network of existing and planned collaborations with NGO and CSOs, as well as other stakeholders. This network map will allow us to identify relevant policy landscapes in all case studies to better understand opportunities for influence. In particular, we intend to make use of the project and its findings to support local civic initiatives around social trust and inclusive governance. To this purpose, we will work with local citizen movements (directly and through local NGOs and CSOs) in the case studies to discuss and co-design the project.

Second, building on the partnerships above, we intend to explore evidence sharing mechanisms and additional collaborations in the course of the project with relevant government ministries and departments in the four case studies (details provided in the Pathways to Impact section). Representatives of these agencies will be invited to the annual project workshops, and to other project events (see Pathways to Impact section). Meetings will be also arranged at the start of the project with these institutions to introduce and discuss the project and solicit input into the overall research design and the specific subprojects pertaining to each case study.

Third, we will make use of the research team's longstanding collaboration with the World Bank, United Nations agencies and other international actors shaping governance agendas worldwide to influence debates at the international level. We will share the project design and findings, collaborate in relevant events, and bring relevant staff to participate in project events. Notably, the World Bank will provide support for this engagement via their influential 'Pathways for Peace' agenda, with its director Alexandre Marc joining the project as part of the Advisory Board.