IDE Research Columns


How Does Trust Affect Life Satisfaction in Transition Countries?

How Does Trust Affect Life Satisfaction in Transition Countries?

Kaito DOI
Institute of Developing Economies, JETRO

February 2024

Researchers have recently become interested in the close associations between trust and subjective well-being (SWB) and the unique trends characterizing such connections. However, these relationships remain insufficiently understood in transition countries. The present study investigated the nuanced affiliations between trust and life satisfaction in transition countries. The analysis revealed that community-level trust enhances life satisfaction. Thus, the present study highlighted that trustworthy societies were important for superior SWB. Moreover, interpersonal trust was found to exert a greater influence on life satisfaction than institutional trust, and both effects were found to be higher in the former Soviet Union nations than in Central and Eastern European countries. These results indicate that regional characteristics could govern the effects of trust on life satisfaction. They also underscore the significance of understanding SWB and its determinants in specific contexts.

What Is Subjective Well-Being (SWB)?

SWB is increasingly attracting scholarly interest as a new indicator of the quality of life (Diener et al. 2015). SWB is generally described as people’s evaluations of their lives, such as the degree of overall life satisfaction and happiness. Recently, researchers and policymakers have demonstrated the inclination to apprehend diverse dimensions of well-being, shifting their attention to more subjective and psychological indicators instead of focusing solely on traditional economic indicators such as gross domestic product (GDP).

The increased interest in SWB has instigated extensive research initiatives aimed at elucidating its determinants. In this new paradigm, trust has emerged as a factor potentially correlated with SWB. Trust is defined as one’s willingness to make oneself vulnerable to another entity (Luhmann 1988). It is shaped by previous personal experiences as well as the historically constructed national culture.

Why Focus on Transition Countries?

Transition countries present a unique case in the former Soviet Union (FSU) and Central and Eastern Europe (CEE) and are characterized by distinctive SWB and trust trends vis-à-vis other regions. Interestingly, economic conditions such as economic growth and household income significantly influence SWB in transition countries (Guriev and Melnikov 2018) because these nations underwent rapid economic transitions from plan to market and the attention of their citizens shifted to economic circumstances (Delhey 2010). Moreover, the atmosphere of fear and distrust permeated strongly in their citizens after decades of communist rule and dictatorship, making it difficult for trust to develop and accumulate in transition countries (Bartolini et al. 2017).

Nevertheless, trust is also deemed a factor in increasing SWB in such contexts, suggesting a complex and yet insufficiently understood relationship. The relationship between trust and SWB must be comprehensively probed in diverse conditions and contexts to accurately grasp the effects of trust and advance the discussion. Therefore, this study investigated the ways in which the effects of trust on life satisfaction differed depending on the types of trust (interpersonal and institutional) and regional diversity (FSU and CEE), attending specifically to the functioning of meso-level (community-level) trust. It empirically evaluated individual data obtained from the Life in Transition Survey conducted in 28 transition countries in 2006, 2010, and 2016.

The Role of Community-Level Trust in Life Satisfaction

Trust can be measured at different levels: micro (individual), meso (community), and macro (country or region). Researchers have generally focused predominantly on micro- or macro-level trust; therefore, a gap exists in the scholarly apprehension of the effects of meso-level trust. Notably, it would be beneficial to attend to the community-level because the determinants of SWB include individual attributes as well as the daily contexts, circumstances, and institutions within which people are situated.

Economic factors are believed to be strongly correlated with SWB in transition countries. Notably, this study’s estimation results confirmed that community-level trust increases life satisfaction. In so doing, they highlighted the importance of social states such as trust in promoting life satisfaction in transition countries. Moreover, the study results indicated that residents of trusting communities benefit particularly by increasing life satisfaction. Evidently, a sense of trust would have implications not only for people who have strong trust but also for other members of the same community. These findings provide the meaning to consider the role of meso-level trust in terms of its psychological effects.

Interpersonal Versus Institutional Trust

Conceptually, trust can be categorized as interpersonal or institutional. Interpersonal trust refers to trust in people; institutional trust refers to trust in political and economic institutions. The sociopolitical conditions of particular regions govern which type of trust is deemed more crucial by its people.

This study confirmed empirically that interpersonal trust wields a larger positive impact on life satisfaction than institutional trust. Both trust variables were found to increase life satisfaction when they were separately estimated, and the magnitudes of their coefficients were almost identical. However, the coefficients and significance of interpersonal trust remained almost the same when the trust variables were simultaneously estimated; however, the coefficients and significance of institutional trust dropped significantly. Thus, the effects of institutional trust are minor compared to the effects of interpersonal trust.

Transition countries converted to market economies and democracies after the Soviet Union collapsed. Their rapid and chaotic political and economic transfigurations resulted in weak formal institutions and decreased public trust in the state machinery and government (Sapsford and Abbott 2006). Most populations survived these circumstances by depending on interpersonal resources and informal relationships rather than institutional outcomes (Abbott et al. 2011). Therefore, the results of the present study indicate interpersonal trust plays a more critical role than institutional trust in countries that characteristically encompass inferior-quality formal institutions.

FSU Versus CEE Countries

Relationships between trust and SWB also differ depending on regional characteristics such as the socioecological environment and culture. The diversity of peoples, cultures, traditions, institutions, and economic development in regions affects this relationship in a myriad of ways (Rodríguez-Pose and von Berlepsch 2014).

This study’s estimation results confirmed that both types of trust exerted a stronger positive impact on life satisfaction in FSU nations rather than in CEE countries. The magnitudes of the coefficients of trust were found to be larger in the FSU group than in the CEE group when the sample was classified into FSU and CEE countries. In addition, the interaction terms of the trust variable and the FSU were positive and significant and considerably larger than the interaction terms for CEE. These outcomes imply that trust increased life satisfaction more in FSU than in CEE.

FSU and CEE countries can be differentially characterized according to the progression of their political and economic transitions in their regions. Specifically, CEE countries have transformed into relatively well-regulated democracies and market economies. However, the transitional advancements of FSU nations have been delayed and they have developed inadequate institutional conditions (Abbott et al. 2011). Conversely, people in FSU nations accumulate trust more than people in CEE countries. These results imply that trust can substantively boost life satisfaction, especially in FSU countries, because the benefits of higher levels of trust compensate for the paucity of state systems. Trust could thus function as an essential resource in resolving mundane issues.


Scholars are attending increasingly to the relationships between trust and SWB. However, only a few empirical studies have yet conducted detailed investigations into the trust–SWB connections in the distinctive cases of transition countries. The results of this study revealed that community-level trust enhances life satisfaction. Thus, this study highlighted the significance of a trustworthy society for higher SWB levels. Moreover, this study indicated that trust types (interpersonal and institutional) and regional sociopolitical diversities (FSU and CEE) can vary the effects of trust on life satisfaction. These results imply that the relationships and mechanisms connecting trust and life satisfaction could depend on regional characteristics such as socioecological environments and cultures. This finding underscores that SWB and its determinants must be apprehended in specific contexts.

Author’s Note

This column is based on Doi, Kaito, and Masato Hiwatari. 2023. “Heterogeneous Impacts of Community-Level Trust on Life Satisfaction in Transition Countries: Perspectives on Institutions and Regional Diversity.” Applied Research in Quality of Life 18: 2895–934.


Abbott, Pamela, Claire Denise Wallace, and Roger Sapsford. 2011. “Surviving the Transformation: Social Quality in Central Asia and the Caucuses.” Journal of Happiness Studies 12: 199–223.

Bartolini, Stefano, Małgorzata Mikucka, and Francesco Sarracino. 2017. “Money, Trust and Happiness in Transition Countries: Evidence from Time Series.” Social Indicators Research 130: 87–106.

Delhey, Jan. 2010. “From Materialist to Post-Materialist Happiness? National Affluence and Determinants of Life Satisfaction in Cross-National Perspective.” Social Indicators Research 97: 65–84.

Diener, Ed, Shigehiro Oishi, and Richard E. Lucas. 2015. “National Accounts of Subjective Well-Being.” American Psychologist 70 (3): 234–42.

Doi, Kaito, and Masato Hiwatari. 2023. “Heterogeneous Impacts of Community-Level Trust on Life Satisfaction in Transition Countries: Perspectives on Institutions and Regional Diversity.” Applied Research in Quality of Life 18: 2895–934.

Guriev, Sergei, and Nikita Melnikov. 2018. “Happiness Convergence in Transition Countries.” Journal of Comparative Economics 46 (3): 683–707.

Luhmann, Niklas. 1988. “Familiarity, Confidence, Trust: Problems and Alternatives.” In Trust: Making and Breaking Cooperative Relations, edited by Diego Gambetta, 94–107. Oxford: Basil Blackwell.

Rodríguez‐Pose, Andrés, and Viola von Berlepsch. 2014. “Social Capital and Individual Happiness in Europe.” Journal of Happiness Studies 15: 357–86.

Sapsford, Roger, and Pamela Abbott. 2006. “Trust, Confidence and Social Environment in Post-Communist Societies.” Communist and Post-Communist Studies 39 (1): 59–71.

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** The views expressed in the columns are those of the author(s) and do not represent the views of IDE-JETRO or the institutions with which the authors are affiliated.