How relative poverty influences responses to social protection programs: Evidence from Pakistan
- Impact Area
Since the COVID-19 pandemic, global income inequality has again started to rise—a trend exacerbated by the food and fertilizer crisis caused by Russia’s ongoing war in Ukraine (The Economist 2022). Increasingly common disasters (many climate-related) across the globe – such as Pakistan’s devastating 2022 floods, ongoing severe drought in the Horn of Africa, and the recent earthquake in Syria and Türkiye—also disproportionately affect already vulnerable groups. Such events tend to further exacerbate the gulf between the rich and the poor. This trend toward greater income inequality is notable, given a growing body of research has demonstrated that citizens’ support for and trust in government is heavily influenced by real as well as perceived income inequality (Gimpelson and Treisman 2018, Healy et al. 2017).
Trust in government is essential for a functioning democracy. It is also critical for the economy—for example, Fukuyama (1996) highlights how social trust plays a role equal to that of physical capital in determining economic prosperity. Governments often address poverty and inequality through redistributive social protection programs, including cash transfer programs. Can such programs foster trust in government amid increasing inequality? Evans et al. (2019) show that they can increase trust in leaders and perceptions of leaders’ responsiveness and honesty among recipients. But the empirical evidence is mixed, and other studies show that this does not occur consistently (Freeland 2007, Ellis and Faricy 2011, Zucco 2013).