From Classrooms to Cohesion: Education‐Driven Socialization, Institutional Trust, and <scp>SDGs</scp> Performance in <scp>LMICs</scp>

ABSTRACT Despite sustained investments in education, development outcomes remain uneven across low‐ and middle‐income countries (LMICs). Existing research predominantly explains this variation through economic resources and institutional capacity, while treating education primarily as an input to human capital formation. This study advances an alternative perspective by conceptualizing education as a core institution of socialization that shapes institutional trust, understood as confidence in the capacity, fairness, and reliability of public institutions—a critical condition for coordinated and sustained development. Using an unbalanced panel of 80 LMICs over the period 2000–2023, the analysis employs Dynamic Common Correlated Effects Mean Group (DCCE‐MG) estimators to address cross‐sectional dependence and heterogeneous country responses. Institutional trust is modeled as a mediating mechanism, with robustness assessed using disaggregated development dimensions and distributional analyses. The results show that education is positively associated with development performance and is also positively related to institutional trust, as socialization fosters shared norms, perceptions of fairness, and confidence in public institutions, which in turn exerts a strong positive effect on outcomes. Mediation analysis indicates that a substantive share of education's impact operates through trust‐building mechanisms, with stronger effects in countries with lower initial performance. These findings demonstrate that education contributes to development not only through skill formation but also by strengthening the relational foundations of governance. While the empirical analysis is situated within the SDG framework, the results highlight broader mechanisms of education‐driven socialization and institutional trust as drivers of long‐term development.