Local contexts for democracy and economic development : connecting political trust and the local business climate

A re-analysis of three Swedish studies of political trust at local level shows that the extent to which citizens trust the system of democracy in municipalities correlates strongly with how the employers in that area assess the state of the local business climate. This article deals with the question of how this can be understood. Three sets of underlying explanations are tested – social capital theory, a theory of local well-being and political-institutional conditions. The empirical analysis shows that only the theory of local well-being can consistently explain why political trust and a flourishing local business climate occur in concert. The study emphasizes the need to expand research on political trust to also take into account the role played by the business climate. This has been completely ignored in previous research on political trust. The findings are also directly relevant for local policy-making. There is no trade-off between attempts to improve a trusting relationship between electors and elected, on the one hand, and policies aiming at creating a better business climate, on the other. On the contrary, these may reinforce each other. In order to capture the specific mechanisms at work, case studies are suggested as the next step of research