Trust in Government and Its Determinants: An Empirical Study of Public Acceptability for Carbon Tax in Malaysia

Abstract

Trust in government is a significant factor influencing the public acceptability of environmental tax. Without trust, implementing and sustaining a new tax policy is challenging due to public resistance. However, gaining trust from the public is even more challenging in developing countries where corruption is a common issue. Despite the risk of policy rejection, many developing countries, including Malaysia, are adopting the carbon tax as a policy to reduce carbon emissions. This has raised the question of the impact of trust in the government on public acceptability for carbon tax implementation in Malaysia. Another critical concern is identifying the predictors of trust in government, to which researchers have given less attention. Three main features of good governance—accountability, integrity, and competence—were examined as the predictors of trust in government. A nationwide survey in Malaysia was conducted using an online questionnaire, and 566 respondents completed the survey. The data were analysed using the Structural Equation Model (SEM) via Amos. The results show that trust in the government is influenced by the government’s accountability, integrity, and competence. In contrast with many past studies, trust in the government does not influence Malaysian acceptance behaviour. Instead, only the government’s accountability influences the acceptance of carbon tax implementation among the public. The public is concerned about the government’s spending; hence, the government must be transparent in its spending and redistributing the tax revenue to the public must be the top priority to gain public trust in implementing a carbon tax policy.