Institutional Incentives and Trust: Marginalized Groups and the Creation of Trust in Local Government*

Abstract

Objectives. There is an important theoretical debate concerning whether institutional trust can be created. Since very few governments actually try to promote trust directly, it has been difficult to test this debate empirically. To investigate this debate, we examine an innovative new program in Japan that is specifically designed to promote trust in institutions—community currencies.Methods. We use propensity score matching to determine if community currency program participation in Japan increases institutional trust.Results. We find that participation increases institutional trust. Additionally, we find that supporters of political parties with little political power receive a greater impact from program participation.Conclusions. These results show that institutional trust can be increased by participation in incentive programs of cooperation, and suggest that members of marginalized groups will benefit more from program participation.