Navigating Financial Satisfaction: Trust in Government and Corporate

Entities, and Economic Governance

Abstract

This study investigates the complex relationship between financial satisfaction, trust in

government and private sectors, and perceptions of economic governance. Utilizing Structural

Equation Modeling, it initially examines the influence of financial satisfaction on expectations

regarding the roles of government and corporations in the economy, with institutional trust acting

as a mediator. The findings reveal a significant association between increased financial

satisfaction and heightened trust in these institutions, which in turn shapes expectations about

their roles in the economic system. The second phase of the study expands this analysis,

providing a comprehensive examination of each regression model to further dissect these

intricate dynamics. It confirms the robust link between financial satisfaction, institutional trust,

and expectations of their economic roles. Notably, regarding the direct link, it finds that financial

satisfaction amplifies demands for more intervention of the private sector in the economy. The

third analytical phase explores how the interplay between regional characteristics and financial

satisfaction affects perceptions of economic governance. By synthesizing these three analytical

dimensions, the findings underscore the critical roles of financial satisfaction and trust in shaping

public opinions about the roles of government and the private sector. It offers essential insights

for policymakers and business leaders, guiding them to develop strategies that are responsive to

varied socio-economic contexts.

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Keywords: Financial satisfaction; Trust in government; Trust in companies; Economic

governance; Corporate social responsibility

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1. Introduction

In recent decades, the issue of economic inequality has ascended to the forefront of global

discourse, marking a significant and growing concern since the late 20th century. This

escalation, meticulously chronicled by eminent scholars such as Chancel and Piketty (2021)

and Piketty (2014), has cast a spotlight on the profound and multifaceted impact of economic

disparities on the fabric of society. Beyond the evident gaps in income and wealth, this trend

has ignited a wave of increasing dissatisfaction among individuals regarding their personal

economic and financial situations, a phenomenon explored by Hastings (2019). The rising tide

of discontent not only reflects a shift in societal sentiment but also highlights the critical need

for a deeper understanding of how financial satisfaction influences public perceptions of the

roles and responsibilities of both the public and private sectors in managing economic

governance amidst economic uncertainty. Delving into this complex interplay is crucial for

comprehending the intricate nature of economic inequality and its far-reaching consequences

on societal structures and dynamics.

The notion of relative deprivation, as articulated by scholars such as Davis (1959),

Merton and Rossi (1950), and Runciman (1966), serves as a pivotal framework for examining

the impact of financial satisfaction in modern societies. Relative deprivation influences

individuals' perceptions of their financial well-being by fostering feelings of lesser affluence in

comparison to others. This study, which bridges the realms of business and politics, focuses on

the role of individual satisfaction with personal financial situations in shaping perceptions of

government and private sector involvement in business and industry. It explores how these

perceptions are influenced both indirectly and directly. Indirectly, perceptions of financial

conditions can alter individuals' expectations of the roles that public and private entities ought

3
to play within the economic system, a process mediated by fluctuations in trust towards the

government and corporations. Directly, the manner in which individuals perceive their

financial conditions has a tangible impact on their views regarding the extent of control exerted

by government and private sector entities over business and industry.

This study, grounded in the theoretical frameworks of subjective perceptions of

financial conditions (Merton and Rossi 1950) and the Varieties of Capitalism (Hall and

Soskice 2001), is dedicated to exploring the complex relationship between financial

satisfaction, trust in government and companies, and the preference for government versus

private ownership in business and industry. Furthermore, this study seeks to ascertain the

implications of these relationships for the development of efficacious policies and strategic

business strategies. It recognizes the essential role of trust in government for the effectiveness

of policy formulation and implementation, as emphasized by Hong (2023), while also

acknowledging the growing view of private companies as moral agents with societal

responsibilities, a concept increasingly recognized, as highlighted by Wiessner et al. (2023).

This evolving view of private companies as responsible actors is reflected in the growing

emphasis on corporate social responsibility (CSR) and environmental, social, and governance

(ESG) strategies in corporate management ( Bogers et al. 2020; Surana et al. 2020). These

strategies are vital for corporates to operate sustainably and responsively in a context where

economic disparities and public trust significantly shape market dynamics. The research is

further enriched by a contextual analysis across various regional settings, providing a

comprehensive array of insights into how these dynamics manifest in diverse socio-economic

environments.

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 To accomplish these objectives, this study conducts a comprehensive analysis of data

derived from the World Values Survey (WVS), specifically focusing on Waves 2 through 7. This

extensive dataset spans a substantial temporal range from 1989 to 2022, offering a rich historical

perspective. It encompasses a diverse array of 95 countries, providing a broad geographical

scope and cultural diversity. The robustness of this study is further enhanced by the sheer volume

of data, with approximately 180,000 observations, allowing for a nuanced and detailed

exploration of the intricate relationships between financial satisfaction, trust in government and

businesses, and perceptions of economic governance across different global contexts.

The structure of this article unfolds as follows: Section 2 delineates the hypotheses,

grounded in an extensive literature review. Section 3 outlines the data and methodology, leading

to parts, where we present and discuss the results of our analyses. Finally, Section 4 offers

concluding reflections and underscores the broader implications of our findings.

2. Perceived Financial Condition, Trust in Government and Companies, and Ownership

for Business and Industry

The phenomenon of economic inequality, rigorously examined by scholars including Chancel and

Piketty (2021) and Piketty (2014), represents a formidable challenge within modern society. This

issue transcends mere theoretical constructs, profoundly influencing individuals' perceptions of

their own economic positions, a notion underscored by Kuhn (2020). Central to understanding the

ramifications of economic inequality, which inherently encompasses relational dimensions, is the

application of Tajfel's (1981) social comparison theory. According to this theory, individuals gauge

their social status and interpret their surrounding environment by engaging in comparative

evaluations with their peers. This evaluative process is intricately interwoven with the fabric of

5
social interactions, a concept thoroughly investigated by Merton and Rossi (1950). This theoretical

framework establishes the foundational premise for the current study.

These comparative assessments are pivotal in shaping an individual's perception of their

economic situation. The subjective nature of economic perception, as investigated in the recent

studies by Condon and Wichowsky (2020), Evans and Kelly (2004), Kelly and Evans (2017),

Han and Kwon (2023a), and Szewczyk and Crowder-Meyer (2022), plays a crucial role in the

development of individual perspectives. Understanding this subjective aspect is essential for a

comprehensive grasp of how an individual's satisfaction with their economic and financial

status shapes their personal perceptions of societal structures.

Furthermore, the research conducted by Gimpelson and Treisman (2017) and Hauser and

Norton (2017) underscores the influence of perceived economic status within one's reference

group and immediate environment on public opinion. This line of inquiry, supported by the

findings of Fraile and Pardos-Prado (2014), Han and Lee (2023), and Szewczyk and Crowder-

Meyer (2022), consistently demonstrates that individual behavior and opinion are shaped not

only by material conditions but also by subjective interpretations of these conditions. These

studies highlight the crucial role that individuals' perceptions of their financial and economic

circumstances play in forming their attitudes towards a range of social and political issues.

In response to these insights, the current study is designed to systematically investigate

the impact of financial satisfaction on attitudes towards social and political issues, particularly

focusing on the perceived roles of the public and private sectors in economies. This research

delves into the profound influence of financial satisfaction on trust in both government and

private sector entities, examining how this trust, in turn, shapes perceptions of their roles within

the economic system. Furthermore, this study explores the direct effects of financial satisfaction

6
on these perceptions. Understanding these dynamics is essential, as they have the potential to

significantly influence the interaction between government and private sector roles in market

economies. This investigation is crucial for understanding how economic sentiments can drive

shifts in the socio-political landscape, offering valuable insights into the complex relationship

between individual economic perceptions and broader societal structures.

2.1 Financial Satisfaction and Trust in Government, and Attitudes towards Role of Government

The notion of social trust, a vital psychological characteristic, is deeply rooted in an individual's

socio-economic background and life experiences. This complex relationship is highlighted in the

research by Alesina and La Ferrara (2002), Hamamura (2012), and Uslaner (2002), which

collectively demonstrates the significant role of economic factors in shaping social trust.

Negative experiences, including dissatisfaction, disrespect, discrimination, and challenges to

established social norms – often accompanying economic inequality – play a crucial role in

diminishing social trust, as detailed by Henry (2009, 2011). These experiences frequently lead to

a state of psychological defensiveness, thereby influencing an individual's level of trust in

society, a phenomenon observed by Chen et al. (2011). Moreover, deprivation stemming from

economic conditions profoundly affects cognitive processes, beliefs, and behaviors, as

documented in studies by Cavacho and Álvarez (2019) and Kraus et al. (2009). This body of

research underscores the intricate interplay between economic factors and psychological

elements, especially in the context of developing or deteriorating social trust.

Financial dissatisfaction can engender a sense of being under-resourced and subject to

the whims of external forces, diminishing personal autonomy. This perception of reduced

autonomy and heightened external control can significantly undermine an individual's trust in

7
societal structures and peers, thereby hindering effective social engagement (Chen et al.

2011). The erosion of social trust marks a pivotal transformation in individuals' perceptions

and interactions within their social roles, characterized by a decline in confidence in societal

systems, norms, and fellow citizens (Putnam 1995). This shift has profound implications for

individual engagement and participation in society, including interactions with governmental

institutions. Such a decline in trust, stemming from personal experiences of financial

dissatisfaction and broader disillusionment with government policies that exacerbate adverse

economic conditions, is well-articulated in the research of Miller and Listhaug (1999) and

Yuan et al. (2024).

Conversely, social trust is instrumental in building social capital, as evidenced by

studies from Almakaeva et al. (2018), Brehm and Rahn (1997), and Chetty et al. (2022). These

studies highlight the role of social trust in fostering strong interpersonal connections and

cooperation. High levels of social capital, characterized by robust trust and cooperation, are

crucial for the effective functioning of public institutions, a concept supported by Coleman

(1990), Fukuyama (1995), and Putnam (1993). These authors emphasize the vital role of social

capital in enhancing institutional efficiency.

In the context of social trust and its impact on societal and economic dynamics, an

increase in trust in government can significantly influence public support for a more

extensive governmental role in the economic system, as argued by Rothstein and Uslaner

(2005) and Sawulski et al. (2023). High trust in governmental institutions often correlates

with public endorsement and expectation of an expanded government involvement in the

economic sphere (Edlund, 1999). This expanded role could take various forms, such as

increased government ownership or control over businesses and industries. The relationship

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between trust in government and support for its expanded economic role is predicated on the

belief that a trustworthy government is capable of effectively managing and overseeing

economic entities. Such trust implies confidence in the government's ability to operate

businesses and industries in a manner that aligns with public interests and welfare. Therefore,

individuals who believe in the government's competence and integrity are more inclined to

support policies that increase governmental participation in the economy, viewing it as a

means to ensure equitable and efficient economic management.

This perspective is in line with the idea that increased government oversight, when

integrated with an effective and trustworthy governance system in economic sectors, can lead

to a more equitable distribution of resources and improved social welfare. This assertion is

supported by the research of Abed and Gupta (2002), Gupta et al. (2002), Hausmann et al.

(2005), Mauro (1998), Rajkumar and Swaroop (2008) and Rodrik et al. (2004). Drawing on

this notion and the empirical evidence, it can be posited that in societies where the government

is perceived as reliable and competent, there is likely to be greater public openness to

economic models that emphasize state ownership or intervention. This openness stems from

the belief in the government's ability to foster a more equitable and inclusive economic

environment through such measures. Consequently, the study formulates two hypotheses:

H1: Increased financial satisfaction leads to higher trust in government, and vice versa.

H2: Individuals with higher trust in government are more likely to support the

expansion of government ownership in business and industry.

2.2 Financial Satisfaction and Trust in Companies, and Attitudes towards Role of Companies

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The concept of public financial satisfaction is a complex construct that extends beyond mere

quantitative assessments, deeply intertwining with the fabric of societal trust and the dynamics of

corporate relationships. This intricate interplay between an individual's financial well-being and

their trust in corporate entities is not merely foundational to stakeholder relationships; it also

critically shapes public perceptions of corporate roles within the economic system (Vidaver-

Cohen and Brønn 2015). Central to this discourse is the premise that financial satisfaction serves

as a catalyst for fostering public trust in corporations, subsequently molding the perceived

responsibilities and societal roles of these entities. Financial satisfaction not only influences

perceptions within the public sphere, including governmental interactions, but also significantly

bolsters trust in the private sector, recognizing corporations as integral constituents of the

societal framework (Greenwood and Van Buren III 2010).

This study posits that as individuals achieve financial stability, there is a tendency for

their confidence in corporate entities to increase. This phenomenon can be attributed to a synergy

between their personal economic security and the acknowledgment of the ethical practices and

societal contributions of these corporations. To reiterate, a favorable personal financial status can

be associated with a positive perception of the prevailing economic framework and an

affirmative acknowledgment of the pivotal roles played by its principal actors, notably private

enterprises. This heightened trust is crucial for corporations, serving as a foundation for societal

approval of their expanded roles ( Bogers et al. 2020; Surana et al. 2020 ). Corporations perceived as

trustworthy are more likely to receive public support when they assume significant

responsibilities that go beyond their basic economic functions. These responsibilities include, but

are not limited to, advocating for promoting community development, as highlighted by

Reinhardt et al. (2008).

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 This phenomenon engenders a virtuous cycle of trust and corporate accountability,

wherein financially secure individuals exhibit increased trust in corporations, thereby motivating

these entities to embrace more inclusive and responsible societal roles. This dynamic accentuates

the critical role of the private sector in sculpting both economic and social landscapes, propelled

by the synergy between individual financial well-being and corporate integrity.

However, this trust is not a simplistic reflection of financial prosperity; it embodies a

complex sentiment that encapsulates perceptions of a corporation's ethical conduct, fairness, and

integrity. Corporations that demonstrate an unwavering commitment to the broader stakeholder

community, ensuring equitable compensation and investing in stakeholder well-being, are often

reciprocated with enhanced trust (Ben-Amar et al. 2017; Martinez and Del Bosque 2013; Strange

and Bayley 2008). This trust is instrumental, as it lays the groundwork upon which corporations

are expected to construct their societal roles and responsibilities.

Freeman's stakeholder theory (1984) offers an extensive framework for deciphering these

dynamics. It advocates for corporations to adopt a comprehensive perspective of their societal

role, encouraging them to acknowledge a diverse array of stakeholders, encompassing

shareholders, employees, customers, local communities, and the environment. In an era

characterized by intensified scrutiny of corporate social responsibility (CSR) and environmental,

social, and governance (ESG) practices, the significance of this inclusive approach is paramount

(Durand et al. 2019; Janah and Sassi 2021). Corporations are increasingly accountable for their

impact on various stakeholder groups, with their initiatives in domains such as CSR being

meticulously evaluated (Van Marrewijk 2003; Porter and Krammer, 2006).

The influence of CSR and ESG initiatives in fostering trust and bolstering corporate

reputation is especially pronounced (Saurage-Altenloh and Randall 2018; Stanaland et al. 2011).

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Activities such as community engagement, adherence to ethical business practices, and commitment

to sustainable development profoundly resonate with stakeholders, thereby cultivating trust and

loyalty (Jeffrey et al. 2019). This trust is reciprocal and actively molds the populace's expectations of

corporations, thereby shaping their viewpoints regarding the responsibilities these entities should

undertake in tackling societal issues and contributing to the economic infrastructure (Fatma et al.

2015; Strange and Bayley 2008).

Consequently, the nexus between public financial satisfaction, corporate trust, and the

evolving roles of these entities within the economic system is both cyclical and dynamic.

Financial satisfaction engenders trust, which in turn cultivates a conducive environment for

corporations to broaden their societal roles. This expansion transcends mere profitability; it

involves embracing a comprehensive array of responsibilities, including economic, legal, ethical,

and philanthropic duties, as delineated by Carroll (1991, 1999). Fulfilling these responsibilities is

imperative for corporations that aspire to positively influence their communities and the broader

stakeholder landscape, thereby exerting greater influence within the economic system. In

recognition of these insights, this study proposes the following hypotheses:

H3: Higher individual financial satisfaction is positively related to trust in corporations.

H4: Increased trust in corporations is associated with greater stakeholder support for

these entities to assume expanded roles in society.

2.3 Financial Satisfaction and Attitudes towards Roles of Government and Companies

Meltzer and Richard's (1981) hypothesis offers a nuanced framework for examining the

relationship between financial conditions and public preferences for governmental intervention.

Central to their thesis is the concept that a widening disparity between median and average

12
income, indicative of a more skewed income distribution, fosters a tendency among individuals

earning below-average incomes to support redistributive policies. This preference for

redistribution, triggered by escalating income inequality, typically motivates policymakers to

augment public welfare expenditures. The aim of this augmented spending is to realign the

median income closer to an ideal level, thus mitigating the income disparity.

While acknowledging the influence of various non-economic factors in shaping

preferences for government involvement in redistribution, such as social identity (Shayo 2009),

system justification theories (Jost 2018; Jost and Banaji 1994), trust in government (Rothstein

and Uslaner 2005), ethnic fractionalization (Alesina et al. 2003), and altruistic motivations

(Rueda and Stegmueller, 2019), the fundamental importance of economic considerations

remains pertinent. Empirical support for the Meltzer and Richard hypothesis is apparent in

studies by Aalberg (2003), Bae (2015), Jæger (2013), Milanovic (2000), Moldogazieve et al.

(2018), and Schmidt-Catran (2016). This trend of public intervention in response to rising

income disparities extends beyond democratic systems, as observed in non-democratic regimes

(Fan and Sun 2013; Huang and Zuo 2023; Malesky et al. 2011). Moreover, recent discussions

on economic inequality have expanded to encompass both income and asset inequality, as

noted by Ansell (2014) and Han and Kwon (2023b), highlighting their significant implications

for social policy. These studies underscore the central role of economic disparity in shaping

attitudes towards public welfare spending and redistribution, affirming the importance of the

economic perspective in the discourse on social policy preferences.

At the heart of this discourse is the idea that support for state intervention in social and

economic policies increases among individuals who perceive or experience economic disparities.

This idea gains further depth when combined with the earlier discussed concept of subjective

13
perceptions of economic and financial conditions. Specifically, dissatisfaction with one's

economic and financial situation tends to foster a demand for more robust government

intervention. The logic of the Meltzer and Richard hypothesis, coupled with the subjective

awareness derived from social comparison, suggests that public dissatisfaction with financial

conditions can lead to increased demands for a more pronounced government role in the

economic system. This expanded government role could take various forms, including increased

ownership or control over businesses and industries. Conversely, it implies that individuals

satisfied with their economic and financial status are likely to support the growth and expansion

of the private sector's role, rather than advocating for extensive government intervention in the

market. Accordingly, the fifth hypothesis is formulated as follows:

H5: Individuals' financial dissatisfaction leads them to demand a greater role for the state

in the economic system, including expanded ownership over businesses and industries.

Figure 1 serves as a succinct graphical representation of the study's core relationships and

hypotheses, providing a structured overview of the theoretical framework and conceptual

linkages integral to the analysis. This visual aid effectively clarifies the interconnections among

hypotheses and their collective contribution to the study's narrative, thereby facilitating a more

comprehensive grasp of the research's scope and findings.

[INSERT FIGURE 1 HERE]

2.4 Preferences for economic governance within the Framework of Varieties of Capitalism

The “Varieties of Capitalism (VoC)” framework, as extensively developed by Hall and

Soskice (2001), offers a comprehensive understanding of how different capitalist systems

14
function and influence citizen attitudes towards government and private sector roles in the

economy. This theory classifies capitalist economies into two main types: Liberal Market

Economies (LMEs), exemplified by the United States and the United Kingdom, and

Coordinated Market Economies (CMEs), as seen in Germany and Japan.

In LMEs, market mechanisms predominantly coordinate economic activities with

minimal government intervention. These economies, characterized by corporate governance

systems that emphasize shareholder value, foster an environment conducive to competition

and innovation (Hall and Gingerich 2009). Citizens in LMEs generally favor limited

government involvement in the economy, reflecting a belief in the efficiency of market

mechanisms and skepticism about government economic management (Mares 2001).

In contrast, CMEs feature more collaborative interactions among the government,

businesses, and labor organizations. These economies are marked by active government

participation in the economic system, often including comprehensive vocational training

systems, stakeholder-oriented corporate governance, and robust social safety nets (Thelen 2001).

Citizens in CMEs are more inclined to support government intervention in the economy, viewing

it as a key player in ensuring equitable outcomes and social welfare (Hancké et al. 2007).

Empirical studies, such as those by Svallfors (1997, 2012), validate these theoretical

distinctions, showing variations in trust in government and support for welfare policies across

societies. For example, research comparing European countries indicates that citizens in CMEs

are more supportive of government economic intervention and have greater trust in public

institutions (Hall and Thelen 2009). The VoC approach also highlights how institutional structures

and individual attitudes interact. Factors like regulatory frameworks, labor market policies, and

corporate governance in a country influence the economic opportunities and risks for its citizens,

15
shaping their views on the roles of government and the private sector (Hall and Soskice 2001). For

instance, in countries with strong labor protections and generous welfare systems, citizens may

view the government's role in providing economic security more positively (Mares 2001).

Esping-Andersen's (1990) work further enriches this analysis by offering a

comparative framework for examining social policy structures across nations. The author

categorizes Western welfare states into models like the comprehensive Scandinavian model,

the conservative model, and the liberal model. A key concept in his framework is

decommodification, the extent to which welfare services are provided outside the market

through government intervention. This concept is crucial in differentiating various welfare

regimes in advanced economies. Esping-Andersen's analysis is instrumental in understanding

the complex relationship between the state and the private sector in social and economic

policy formulation. Within this comparative framework, the welfare regime of developing

countries can also be differentiated according to each social context (Han 2023; Rudra 2007).

This context-specific approach is essential in comprehensively understanding how different

societies navigate the balance between state intervention and market mechanisms in their

social and economic frameworks in the contemporary economic landscape.

Overall, the VoC framework proves to be an indispensable tool for analyzing how

distinct capitalist models influence citizens' perceptions of government and private sector

roles in economic management. It sheds light on the nexus between varying levels of

government intervention and coordination in capitalist economies and the resultant public

attitudes towards economic governance and social welfare policies. This framework

highlights the pivotal role of institutional structures in molding economic behaviors and

attitudes within capitalist societies. In this vein, the interaction between individual financial

16
satisfaction and regional characteristics may exhibit variations across different societal

contexts. This study adheres to the theoretical underpinnings of the VoC framework, yet

expands its application to encompass a wider social milieu. Consequently, this leads to the

development of a nuanced, conditional hypothesis:

H6: The interaction between individual satisfaction regarding financial conditions and

specific regional characteristics can have diverse impacts on perceptions of the

government's and private sector's roles in the economy.

3. Methods and Results

This study's analysis is structured into three distinct but interconnected analytical phases. In this

section, we provide a thorough examination of the data, methodologies, and findings from each

of these three separate analyses. The first analysis employs Structural Equation Modeling (SEM)

to investigate the complex dynamics between financial satisfaction, trust in governmental and

corporate entities, and the perception of government and private sector control over business and

industry, thereby contributing to the theoretical understanding of the broader context. The aim of

the second analysis is to deconstruct the framework established in the first analysis by

conducting a thorough examination of each regression model. This part of the study sequentially

investigates the relationships between financial satisfaction, trust in government and corporate

bodies, and the perceptions surrounding the ownership in business and industry. Both the initial

and second phases incorporate a focused analysis of the direct connection between financial

satisfaction and ownership perceptions. The final phase of the study adopts a comparative lens,

highlighting the unique regional variations within the Varieties of Capitalism framework. This

17
comprehensive analytical structure aims to provide a nuanced understanding of the complex

dynamics prevalent across various socio-economic contexts.

All three studies utilize the same dataset and variables, which are elaborately described

in their individual subsections. The data is derived from the World Values Survey (WVS)

Waves 2-7, spanning the years 1989 to 2022, and covers 95 countries with approximately

180,000 observations. Appendix A contains a detailed list of the countries included in the study

and their descriptive statistics. The WVS represents a scholarly collaborative effort,

encompassing nationally representative surveys from various countries.

3.1 Analysis 1

Analysis 1 employs SEM to explore the interplay among financial satisfaction, trust in government

and corporate entities, and perceptions of ownership in business and industry. The SEM analysis is

guided by the theoretical model presented in Figure 1, which incorporates three key latent

variables: “Trust Government,” “Trust Company,” and “Private vs. Government Ownership.”

First, “Trust Government” is evaluated through the survey question, “Could you tell me how much

confidence you have in the Government?” Responses are scored on a scale from 1 to 4, where

higher scores signify greater trust in the government. Second, “Trust Company” is assessed by

asking respondents, “Could you tell me how much confidence you have in Major Companies?”

This is similarly measured on a 1 to 4 scale, with higher values indicating increased trust in

companies. Third, “Private vs. Government Ownership” is gauged through the question, “How

would you place your views on this scale?” Responses range from 1, representing a preference for

increased private ownership of business and industry, to 10, indicating a preference for increased

18
government ownership. Thus, higher values on this scale suggest a leaning towards government

ownership, while lower values denote a preference for private ownership.

In the SEM framework of Analysis 1, the primary observed variable of interest is

“Financial Satisfaction.” This variable reflects an individual's perceived satisfaction with their

household's financial situation. It is assessed using the survey question: “How satisfied are you

with the financial situation of your household?” The responses for this question are quantified on

a scale from 1 to 10, where higher values denote greater perceived financial satisfaction.

In addressing demographic and socio-economic factors that might influence the

diverse perceptions, this study incorporates control variables. This method aligns with the

conventional approach documented in existing literature on trust, public and private

ownership and responsibility (e.g., Alesina and La Ferrara 2002).These variables encompass

demographic and socio-economic characteristics such as personal income (on a 1-10 scale),

education levels (on a 1-3 scale), age (on a 1-6 scale), urban (on a 1-8 scale), and political

orientation (on a 1=left-10=right scale). Dummy variables for sex (1=female), marital status

(1=living with spouse or partner), and religion (1=having a religion) are also included.

Further details can be found in Table A2 in Appendix A.

Analysis 1 applies SEM analysis to analyze the relationship between aforementioned

variables and the equations are as follows. In terms of the indirect effects, equation for Private

vs. Government is as following.

Private vs. Government =

β 1 · Financial Satisfaction+ β 2 · Trust Government + β 3 · Trust Company + ε 1 (1)

19
 Where β 1 , β 2 , β 3 are the path coefficients representing the direct effects on Private vs.

Government. Next, equation for Trust Government is as following:

11
Trust Government = ∑ β i · X i+ β12 · Financial Satisfaction+ ε 2 (2)
i=4

Where X i represents the eight observed variables as controls (Income, Education, Sex,

Age, Marriage, Urban, Political Orientation and Religious), β i are the path coefficients. Next,

equation for Trust Company is as following:

20
Trust Company = ∑ β i · X i + β 21 · Financial Satisfaction+ε3 (3)
i=13

In addition to the indirect effects through Trust Government and Trust Company, the

model posits direct effects of the observed variables on Private vs. Government. This is

represented by adding terms to the following Private vs. Government equation:

29
Private vs. Government= ∑ βi · X i +(Previous terms∈ Private vs . Government ¿)¿ (4)
i=22

In the presented SEM analysis, the β i coefficients signify the direct influence

exerted by each observed variable on Private vs. Government. This SEM framework

incorporates two primary components: path coefficients (β) and error variances (ε), which

are deduced through maximum likelihood estimation. This method utilizes the observed

covariance matrix of the variables under study.

20
 [INSERT FIGURE 2 HERE]

The analysis presented in Figure 2 elucidates several critical relationships between

Financial Satisfaction, Trust Government, Trust Company, and Private vs. Government.

Initially, the data reveals a statistically significant negative effect of perceived financial

satisfaction on trust in government, evidenced by an estimated coefficient of 0.035 and a p-

value of 0.0. This suggests that higher financial satisfaction associate with increased trust in

government, thereby supporting Hypothesis 1 (H1). Furthermore, Trust Government exerts a

significant positive influence on Private vs. Government, as indicated by an estimated

coefficient of 0.195 and a p-value of 0.0, aligning with Hypothesis 2 (H2).

In a similar vein, Financial Satisfaction impacts Trust Company, as shown by an

estimated coefficient of 0.031 and a p-value of 0.0, suggesting that greater financial

satisfaction is associated with higher trust in companies, thereby corroborating Hypothesis 3

(H3).The analysis also reveals that Trust Company negatively affects Private vs.

Government, evidenced by an estimated coefficient of -0.147 and a p-value of 0.0, in support

of Hypothesis 4 (H4). Additionally, a direct and significant negative relationship between

Financial Satisfaction and Private vs. Government is identified, with an estimated coefficient

of -0.033 and a p-value of 0.0, lending support to Hypothesis 5 (H5).

The results of this analysis highlight the critical role of trust, both in governmental and

private sectors, in shaping public attitudes toward the ownership of business and industry. A

noteworthy finding is the influence of individual financial satisfaction on this trust dynamic.

Financial satisfaction positively affects trust in both government and companies, which

subsequently influences perceptions of business and industry ownership.

21
 This study reveals a nuanced relationship between these factors. Specifically, increased

trust in the government is associated with a preference for greater government ownership of

industries and businesses. Conversely, heightened trust in corporate entities is associated with

a preference for more private ownership in these sectors. This effect is indicative of a broader

trend where financial satisfaction influences trust in different domains, which in turn shapes

attitudes towards public and private ownership. Importantly, the findings indicate that financial

satisfaction has a direct and significant impact on attitudes towards government and private

ownership of business and industry. An increase in financial satisfaction tends to diminish

support for government ownership, suggesting that individuals who are financially satisfied are

more likely to favor private ownership in the economic system.

On the other hand, financial dissatisfaction appears to drive a different set of

expectations and demands. When individuals are financially dissatisfied, they tend to support

an expanded role for the government in business and industry, and show less support for

private sector expansion. This suggests that financial dissatisfaction fosters a desire for

increased government intervention in the economy. The findings thus shed light on the

complex interplay between financial satisfaction, trust in various institutions, and public

preferences for ownership models in business and industry.

3.2 Analysis 2

Analysis 2 aims to delve deeper into the processes highlighted in Analysis 1 by conducting a

detailed examination of each regression model. The initial phase of this analysis investigates the

relationship between financial satisfaction and trust in government and companies, respectively.

Following this, the study focuses on examining the connection between trust in both government

22
and companies and the perceptions regarding government and private sector control over

business and industry. The final stage of Analysis 2 directly evaluates the relationship between

financial satisfaction and the perception of control by government and private sectors over

business and industry. This step-by-step approach facilitates a thorough examination of the

complex interactions identified in the first analysis. The data and variables used in Analysis 2 are

consistent with those utilized in Analysis 1, ensuring continuity and comparability.

The methodological framework, illustrated in Figure 3 and 4, employs the Ordered Probit

model. This model is specifically chosen for its suitability in analyzing ordered and categorical

dependent variables, such as the variables “Trust Government”, “Trust Company” and “Private

vs. Government”. This approach involves calculating the likelihood for each distinct category

within these variables. The primary variable under scrutiny is the perception of financial

satisfaction, alongside the inclusion of the control variables previously discussed. Additionally,

to account for potential unobserved variations across countries and over time, the analysis

incorporates country fixed effects and year fixed effects in its estimation. This comprehensive

approach aims to provide a more nuanced understanding of the relationships between financial

satisfaction, trust in public and private institutions, and perceptions of ownership control in

business and industry.

[INSERT FIGURE 3 HERE]

In Figure 3, Panels (a) and (b) present the odds ratios for the variable “Financial

Satisfaction” in relation to the outcome variables “Trust Government” and “Trust Company,”

which are 1.035 and 1.032, respectively. These ratios suggest that for every one-unit increment

in financial satisfaction, there is a corresponding increase in the likelihood of observing a higher

level of trust in government by a factor of 1.035. Likewise, with each one-unit rise in financial

23
satisfaction, the probability of observing an increased level of trust in companies escalates by a

factor of 1.032, provided that all other variables in the model remain constant. This statistical

representation elucidates the positive association between financial satisfaction and trust in both

government and corporate entities, indicating that improvements in individuals' financial

satisfaction are likely to enhance their trust in these institutions.

[INSERT FIGURE 4 HERE]

In Panels (a) and (b) of Figure 4, the odds ratios for “Trust Government” and “Trust

Company” in relation to the outcome variable “Private vs. Government” are 1.047 and 0.979,

respectively. These findings indicate distinct trends in how trust in government and corporate

entities influences preferences for ownership of business and industry. For Trust Government, an

odds ratio of 1.047 suggests that with each one-unit increase in trust in government, the odds of a

respondent favoring government control over business and industry increase by a factor of 1.047.

This finding demonstrates a positive correlation between trust in government and a preference

for government ownership and control in these sectors.

For Trust Company, the odds ratio of 0.979 indicates a different dynamic. Each unit

increase in trust in companies results in a roughly 2.1% decrease in the odds of favoring

government ownership over business and industry. This effectively means an increased

preference for private ownership as trust in companies rises. This inverse relationship highlights

how trust in the private sector can sway public opinion towards favoring private over

government control in business and industry. These results underscore the nuanced ways in

which trust in different entities - government and companies - shapes public attitudes towards the

ownership and control of business and industry.

24
 In Figure 4, Panel (c), the odds ratio for “Financial Satisfaction” in relation to the

outcome variable “Private vs. Government” is 0.995. This finding indicates an inverse

relationship between financial satisfaction and the preference for government ownership of

business and industry. Specifically, an odds ratio of 0.995 suggests that for every one-unit

increase in financial satisfaction, there is an approximate 0.5% decrease in the likelihood of

favoring government control over business and industry. This trend reveals that as

individuals perceive greater financial satisfaction, their preference shifts towards private

ownership and control of business and industry.

In summation, Analysis 2 extends the preliminary insights of Analysis 1 by employing

the Ordered Probit model to probe the intricate relationships among financial contentment,

institutional trust, and preferences for ownership in the business and industrial sectors. The

analysis uncovers a positive association between financial contentment and trust in both

governmental and corporate entities, indicating that heightened financial satisfaction is linked to

increased trust in these institutions. Furthermore, it elucidates the influence of trust in

governmental and corporate bodies on the propensity towards specific ownership models. This is

evidenced by a discernible relationship between trust in the government and a preference for

state-owned enterprises, contrasted with a higher trust in corporations, which is associated with a

preference for private ownership. A particularly noteworthy finding is the inverse relationship

between financial contentment and the preference for state ownership in business and industry,

signifying a marked tendency to favor the role of the private sector in the economic system as

financial satisfaction increases.

3.3 Analysis 3

25
Building upon the insights from Analyses 1 and 2, Analysis 3 delves into the dynamics between

regional attributes and financial satisfaction, examining their collective impact on the perceptions

of governance and private sector influence within the business and industry sectors, as framed by

the VoC approach. A pivotal aspect of this investigation is to discern how financial satisfaction

shapes views on ownership and control within diverse socio-economic landscapes. Given that

regional socio-economic conditions can shape citizens' expectations of governmental roles, this

in-depth analysis aims to decode the ways in which the socio-economic backdrop of various

regions alters the interplay between financial satisfaction and perceptions of economic authority.

The objective is to ascertain if and how the interaction between regional nuances and financial

contentment systematically shifts these perceptions, thereby enriching our understanding of the

intricacies in global economic governance preferences.

In previous analyses, an increase in financial satisfaction was linked with a more negative

view of government control over business and industry, and conversely, a more favorable view

of private sector control. However, the VoC theoretical framework suggests that the interaction

between characteristics of each society and individual financial perceptions may lead to different

outcomes. Factors such as the history of capitalism, cultural traits, and political contexts, while

not identical, may exert similar influences within a specific region, setting it apart from others.

This concept is central to Analysis 3, which conducts a comparative study across ten regions:

Anglophone, Western Europe, Eastern Europe, Sub-Saharan Africa, Middle East and North

Africa (MENA), Latin America, Northeast Asia, Southeast Asia, South Asia, and Central Asia.

[INSERT FIGURE 5 HERE]

Tables B5 and B6 in Appendix B, corresponding to earlier analyses, consistently

show a uniform trend across all models: financial satisfaction exerts a negative influence on

26
the dependent variable. This pattern indicates that an increase in financial satisfaction

generally results in increased support for influence of private entities in the economy.

Conversely, Figure 5 illustrates that the interaction effects between financial satisfaction and

regional variables lack consistency. These effects differ, displaying either similar, opposite,

or varying levels of intensity across different regions.

Specifically, the interaction effects between financial satisfaction and the regions of the

Anglophone countries, Western Europe, Eastern Europe, and Sub-Saharan Africa are negative

and statistically significant. This suggests that in these regions, higher levels of financial

satisfaction are associated with a stronger preference for private sector control over business and

industry. In contrast, the interaction effects between financial satisfaction and regions such as

Latin America, Northeast Asia, Southeast Asia, and Central Asia are positive and statistically

significant, indicating that in these areas, an increase in financial satisfaction is associated with a

preference for greater government control over business and industry. However, in the MENA and

South Asia regions, the interaction with financial satisfaction does not show statistical significance.

These findings highlight the complexity of the relationship between financial

satisfaction and perceptions of economic control, which varies significantly across different

regional contexts. Figures 6 provides further insight into these dynamics, offering detailed

visual representations of how financial satisfaction interacts with regional characteristics to

shape perceptions of the roles of government and the private sector in business and industry.

Figure 6 offers a detailed analysis of how regional characteristics influence

perceptions of government and private sector control over business and industry, with a

specific emphasis on the moderating role of financial satisfaction. To evaluate this effect,

we employ the binning estimator method, as proposed by Hainmueller et al. (2019). The

27
graphical representations in this figure effectively demonstrate the interplay between

financial satisfaction and a range of regional factors. This interaction is shown to impact

the dependent variable in diverse ways across different regions, highlighting the nuanced

effects of regional characteristics in the context of financial satisfaction.

Our analysis reveals notable variations in the trends and significance across these regions.

These trends can be broadly categorized into three groups based on the directional impact of the

marginal effects of regional characteristics, as influenced by increasing levels of financial

satisfaction. Firstly, in regions such as the Anglophone countries, Western Europe, Eastern

Europe, and Sub-Saharan Africa, we observe that the marginal effects of regional characteristics

intensify negatively with rising financial satisfaction. This pattern indicates that an increase in

financial satisfaction is associated with a growing inclination towards private ownership in

business and industry. Essentially, in these regions, higher financial satisfaction is linked with a

stronger preference for the private sector's role in business and industry.

Secondly, in contrast, regions such as Northeast Asia, Southeast Asia, Latin

America, and Central Asia exhibit a different trend. Here, as financial satisfaction

increases, the marginal effects of regional characteristics strengthen in a positive direction.

This indicates a growing trend favoring government ownership of business and industry in

these areas. It implies that in these regions, higher levels of financial satisfaction are

associated with a preference for increased government involvement in the economic sector.

Thirdly, in the MENA and South Asia, the marginal effect of regional variables shows

minimal variation with increasing financial satisfaction.

[INSERT FIGURE 6 HERE]

28
 It is noteworthy that after accounting for the intercept effect, which is based on a zero

value on the y-axis, the analysis reveals significant regional variations in the magnitude of the

marginal effects. In regions where the marginal effect works in a negative direction, the

Anglophone countries exhibit the most pronounced effect. This suggests that in the Anglophone

countries, the association between financial satisfaction and a preference for private sector

control over business and industry is particularly strong. Conversely, Northeast Asia is identified

as the region with the most substantial positive marginal effect. This indicates that in Northeast

Asia, an increase in financial satisfaction is closely associated with a stronger preference for

government ownership and control in the economic sector. These findings highlight the

considerable regional differences in how financial satisfaction influences perceptions of

economic governance, with the Anglophone countries and Northeast Asia demonstrating the

most distinct characteristics within their respective groups.

In summation, this study is enhanced by a contextual examination across different

regional environments, offering a broad spectrum of perspectives on the interaction between

financial satisfaction and preferences for economic governance within varied socio-economic

contexts. This approach substantiates Hypothesis 6 (H6), revealing the nuanced ways in which

these dynamics manifest across distinct settings. The findings particularly highlight how

regional characteristics distinctly influence public attitudes towards ownership in business and

industry as changes in financial satisfaction. This adds depth to the VoC framework proposed

by Hall and Soskice (2001), illustrating that public opinions on economic governance are not

only shaped by but also reflective of, regional contexts. This underscores the complex nature

of economic perceptions and the pivotal role of regional characteristics in shaping public views

on the balance of roles between government and the private sector in economic governance.

29
4. Conclusion

The present study, intersecting the realms of business and politics, was systematically structured

to dissect the intricate interactions among financial satisfaction, trust in government and business

institutions, and perceptions of economic governance through three analytical stages. Initially,

the research investigated the relationship between financial satisfaction and perceptions of

government and private sector control over business and industry, with trust in these entities

acting as a key mediator. Utilizing Structural Equation Modeling, this study revealed the intricate

dynamics of this relationship. Further exploration was undertaken to comprehend the direct

relationship between financial satisfaction and these perceptions. The final analytical phase

employed a comparative lens, highlighting the influence of regional variations within the VoC

framework, thus enriching the study's findings.

The results from the first two phases indicated a significant indirect link between

financial satisfaction and expectations regarding the roles of governments and businesses,

mediated by trust in these institutions. Specifically, increased financial satisfaction was

associated with heightened trust in governments and corporates, which in turn influenced

expectations of their roles in the economic system. Regarding the direct link, this study found

that higher financial satisfaction was associated with a greater preference for active roles of the

private sector in the economy, while financial dissatisfaction tended to amplify demands for

increased government involvement in market mechanisms. The third phase of analysis

illuminated how regional characteristics interact with financial satisfaction in different socio-

economic contexts. This phase underscored the importance of regional variations in

30
determining the influence of financial satisfaction on perceptions of economic governance,

revealing the nuanced ways in which regional contexts shape these perceptions.

This study outlines various scenarios that depend on the prevailing level of financial

satisfaction within a society. In situations where financial contentment is widespread, there is

usually an increased trust in both government and businesses. This trust results in heightened

expectations of their respective roles in the market. Concurrently, it fosters an environment

where the private sector is anticipated to take on a more significant role in the market, buoyed by

the satisfactory financial situation. Under these circumstances, there is often a stronger

endorsement of the private sector's role, resulting in a market economy predominantly driven by

private enterprises, while the government assumes a supportive, yet less dominant, role.

In contrast, when societal financial satisfaction declines, trust in both government and

business entities tends to diminish, consequently altering public expectations of their roles in the

market. Notably, even amidst reduced trust in government, there is frequently a call for more

substantial government intervention in the market to address economic challenges. This scenario

could lead to a reduced role for the private sector, potentially disrupting established market

dynamics. This trend underscores that economic inequality, leading to perceptions of financial

dissatisfaction, is not solely a governmental issue but also extends into the socio-economic

realm, which businesses must strategically navigate. This situation highlights the critical

importance of social responsibility and the implementation of robust CSR and ESG strategies,

particularly focusing on the ‘Social’ aspect within corporate structures. Such strategies are

essential for businesses to operate sustainably and responsively in an environment where

economic disparities and public trust significantly influence market dynamics. Furthermore, our

comparative analysis indicates that these scenarios play out differently across various societal

31
contexts, posing unique challenges for both governments and businesses. These differences call

for customized approaches to effectively address the particularities of each socio-economic

landscape. The study highlights the necessity for adaptable strategies that can respond to the

changing dynamics of financial satisfaction, trust, and economic governance in diverse

environments.

This study marks a critical convergence of business and political analysis, providing

essential insights for a wide range of stakeholders, such as policymakers and business leaders,

particularly in an era marked by growing economic inequality and uncertainty. For business

leaders, the insights from this study are invaluable for formulating strategies that are not only

aligned with CSR and ESG principles but are also culturally sensitive and socially responsive.

Such strategies enable businesses to address the complex dimensions of their operations,

achieving sustainability objectives while meeting the diverse needs of the communities they

serve. For policymakers, this study underlines the significance of recognizing how citizens'

economic and financial dissatisfaction, particularly in the face of growing economic inequality,

can impact their trust in government. This erosion of trust can potentially compromise the

effectiveness of government policies and interventions. Therefore, it is crucial for policymakers to

develop responsive and effective strategies to alleviate this dissatisfaction, crafting social and

economic policies that cater to the varied needs and perspectives of the population.

Reflecting on the findings presented above, it is acknowledged that the socio-

economic environment, serving as a backdrop, contextualizes public financial satisfaction,

which in turn shapes the dynamics between government, private companies, and the broader

economic system. The study accentuates the importance of a symbiotic relationship between

the public sector and private enterprises, emphasizing that the task of nurturing a conducive

32
socio-economic environment is a shared responsibility, not solely resting on the government

but also incumbent upon the private sector.

The private sector's role extends beyond mere economic participation; it encompasses a

broader social responsibility. Businesses are not just economic entities but are integral

components of the social fabric. Their actions and policies can significantly impact public trust

and financial satisfaction. For instance, when companies engage in responsible practices, adhere

to ethical standards, and invest in community development, they contribute to enhancing

financial satisfaction and trust among the public. This, in turn, fosters a favorable perception of

the private sector's role in the economy, encouraging a more market-driven economic model.

However, this relationship is not unidirectional. The government's role in regulating, facilitating,

and sometimes partnering with the private sector is crucial. Policies that encourage transparency,

fair competition, and corporate accountability can enhance public trust in both the government

and the private sector. Moreover, by addressing socio-economic disparities and implementing

inclusive economic policies, governments can improve financial satisfaction, thereby creating a

more stable and conducive environment for private sector growth and contribution.

The present study also highlights the nuanced nature of this interplay, which varies

significantly across different regions and socio-economic contexts. This variability necessitates

tailored approaches from both government and private entities. Understanding the specific needs,

expectations, and trust levels of different populations can help in formulating more effective

policies and business strategies. For instance, in regions where financial dissatisfaction is

prevalent, concerted efforts may be needed to address the root causes of this dissatisfaction, such

as economic inequality or lack of access to essential services.

33
 In conclusion, this study not only sheds light on the intricate relationship between

financial satisfaction, trust in institutions, and economic governance but also calls for a

collaborative approach to fostering a healthy socio-economic environment. Both government and

private sector entities are integral to this process and must work in tandem, respecting the

regional nuances and specific needs of the populations they serve. By doing so, they can enhance

financial satisfaction, build trust, and create a more robust and resilient economic system that

benefits all stakeholders.

34
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Figure 1. Theoretical model of the research

44
Figure 2. Structural Equation Modeling results

Note: Controls are not reported. Please see Table B1 for full results.

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Figure 3. Financial Satisfaction, and Trust in Government and Company (Odds ratio)

Note: a) DV: Private vs. Government Ownership; b) Ordered Probit analysis with country and year
fixed effects, and country-clustered standard errors; c) Coefficient plots with 90% (thick line) and 95%
(thin line); d) Controls are not reported for both estimations. See Table B2 in Appendix B for full results.

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Figure 4. Effects of Trust in Government and Company, and Financial Satisfaction (Odds ratio)

Note: a) DV: Private vs. Government Ownership; b) Ordered Probit analysis with country and year fixed
effects, and country-clustered standard errors; c) Coefficient plots with 90% (thick line) and 95% (thin
line); d) Controls are not reported for three estimations. See Table B3 and B4 in Appendix B for full results.

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Figure 5. Comparative analysis results (Odds ratio)

Note: a) DV: Private vs. Government Ownership; b) Ordered Probit analysis with country and
year fixed effects, and country-clustered standard errors; c) Coefficient plots with 90% (thick
line) and 95% (thin line); d) Estimations of other variables are not reported for three
estimations. See Table B5 and B6 in Appendix B for full results.

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Figure 6. Marginal effects of regions

Note:
a) Marginal effects of regions with country and year fixed effects, and country-clustered standard errors;
b) In the presented plot, the x-axis represents financial satisfaction functioning as a moderator, while the y-axis illustrates the
marginal effects observed across different regions;
c) The red dashed line, which extends horizontally across the plot, is aligned with a value of 0 on the y-axis, serving as a
reference point.
d) In reference to the value of 0, the area above this point on the plot represents positive values, while the area below it
corresponds to negative values.
e) In the plot, the binning estimators labeled as Low (L), Middle (M), and High (H) denote the statistical significance associated
with each respective group

49