Abstract
This paper presents a theoretical model showing how political mistrust affects people’s preferences for Universal Basic Income (UBI) when its implementation involves a reduction in spending for other public services ( welfare retrenchment ). The model shows that individuals with lower levels of political mistrust are more likely to endorse UBI, reflecting their trust in the government’s ability to manage public resources and avoid wasteful retrenchment of other public services. The model also shows that generalised mistrust — characterised by agents’ expectations of their fellow citizens’ misbehaviour that can reduce the government’s fiscal capacity— does not significantly influence […]
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