The role of social networks in institutional trust during economic downturns

Abstract Citizens’ trust in institutions is crucial for the proper functioning of societies. While national economic performance is a key predictor of institutional trust, individuals’ perceptions of the economy—through which this influence is thought to operate— vary widely, suggesting that additional factors play a role in shaping these perceptions. One largely ignored factor is social networks. This paper argues that acquaintanceship networks expose individuals unevenly to the economic conditions of others, which in turns shapes their trust in institutions. Using Spain as a case study in the aftermath of the 2008–2014 financial crisis, the study examines how individuals’ network exposure to economic distress relates to their institutional trust. Data from a nationally representative survey show that network homogeneity results in uneven exposure to the crisis’s negative effects among individuals from different socioeconomic and age groups, potentially biasing their economic perceptions. Even when controlling for household income, employment status, education, age, and other variables, greater network exposure to distress remains significantly associated with lower institutional trust. These findings highlight the crucial role of social networks in institutional trust.