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. Research and development activity contributing to the UK’s strategy to address key development challenges.