How perceived economic inequality shapes political efficacy: The mediating role of institutional trust

Abstract Economic inequality shapes citizens' attitudes and democratic support, yet little is known about how perceived inequality influences political efficacy. This research examines the relationship between perceived economic inequality and political efficacy, testing institutional trust as a psychosocial mechanism underlying this link. Across two correlational and two experimental studies, we present converging evidence for this process. Study 1 ( N = 9985) revealed multilevel evidence of a negative association between perceived economic inequality and institutional trust, beyond the effect of objective inequality, using Latin American survey data. Study 2 ( N = 1536) replicated this finding with a Spanish quota sample, revealing an indirect effect of perceived inequality on political efficacy through institutional trust. Study 3 ( N = 168) involved the experimental manipulation of inequality. Participants in the high‐inequality condition reported lower institutional trust and political efficacy, and the indirect effect was replicated. Study 4 ( N = 638) employed a concurrent double‐randomization design to manipulate perceived inequality and institutional trust. In contexts of high institutional trust, political efficacy differed between highly and less unequal conditions, with lower political efficacy observed in the high‐inequality condition. Similar patterns emerged for collective action. Overall, perceived inequality undermines institutional trust, reducing political efficacy and democratic engagement.