Abstract
Economic performance has a well-known relationship to political trust. If the economy is perceived as performing well, the levels of political trust are likely to improve. During the 2008 economic crash in Iceland, this relationship seemed vindicated once more. Political trust in Iceland fell from very high to medium levels. Paradoxically, strong indicators of good economic performance after the crash have not been reflected in similarly strong indicators of greater political trust. Thus, while the economy has recovered, political trust has not followed suit to a comparable degree. To account for this discrepancy, we analyse the data on political trust in Iceland before and after the crash. Our findings indicate that while the economy is important in generating political trust, improved economic performance does not account for the whole scenario. The political impact of the crisis remains an obstacle to re-establishing political trust to previous levels, as identifying with a party in the government fails to contribute to political trust in the previous manner. Similarly, personal experience of the crisis may have created a sense of alienation among age cohorts that were particularly affected by the crash and the subsequent economic recession.
Highlights
Countries that have experienced a major change in a short period of time provide interesting cases to study public attitudes towards the political system (Norris 2011)
The distinct impact of the financial crisis on political trust levels across Europe support the claim that economic performance can be regarded as a key source of political trust
In the 2004 regression model, the relationship between age and political trust is linear; the older generations are more trusting than the younger ones, while education does not predict trust levels when controlling for other factors
Summary
Countries that have experienced a major change in a short period of time provide interesting cases to study public attitudes towards the political system (Norris 2011). Economists refer to Iceland’s financial and economic downturn in the last months of 2008 as the ‘collapse of a country’, describing the deepest and most rapid financial crisis of a country recorded in peacetime (Danielsson & Zoega 2009) It caused a wide range of serious negative impacts, plunging the country into a severe economic recession and leading to social and political unrest in the following months and years (see, e.g., Bernburg 2016; Indriðason, Önnudóttir, Þórisdóttir & Harðarson 2017; Ólafsson, Kristjánsson & Stefánsson 2012a, 2012b). The crash was followed by calls for several representative reforms, which would have reduced the role of the conventional parliamentary party government and instigated greater measures for personalised voting, a stronger role for the president, a more active parliament and direct democracy Some of these demands found expression in a failed constitutional bill, which to some extent, remains at the centre of the controversy concerning representative reforms. We analyse the European Social Survey (ESS) data from three points in time, prior to the crash (2004), a few years after the crash (2012) and after the economic recovery (2016), to test our expectations
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