Corruption Perception and Policy Compliance: Mediating Role of Institutional Trust

Abstract

Corruption perception has emerged as a critical factor influencing public attitudes toward governance and policy compliance. This study examines the impact of corruption perception on policy compliance, with institutional trust acting as a mediating variable. Corruption perception refers to individuals’ beliefs about the prevalence of corruption within public institutions, while policy compliance refers to citizens’ willingness to follow laws, regulations, and public policies. Institutional trust is conceptualized as confidence in government institutions, including their fairness, transparency, and effectiveness. Drawing upon institutional theory and social capital theory, this study argues that higher levels of perceived corruption reduce policy compliance by eroding trust in institutions. Empirical evidence suggests that corruption perception significantly weakens trust in public institutions, which in turn affects civic behavior and compliance (Khalid, 2025). Furthermore, studies indicate that increased corruption perception leads to reduced willingness to comply with policies such as taxation, highlighting a direct link between perception and compliance behavior. Institutional trust is proposed as a mediating mechanism that explains how corruption perception influences compliance. When individuals perceive institutions as corrupt, their trust declines, leading to lower compliance with policies. Experimental research confirms that exposure to corruption information significantly reduces institutional trust, reinforcing this mediating relationship. Additionally, trust has been identified as a key determinant of governance effectiveness and citizen cooperation. This study employs a quantitative research design using Partial Least Squares Structural Equation Modeling to test the hypothesized relationships. Data are collected through structured questionnaires measuring corruption perception, institutional trust, and policy compliance. The findings indicate that corruption perception negatively affects policy compliance both directly and indirectly through institutional trust. Institutional trust partially mediates this relationship, highlighting its critical role in promoting compliance. The study contributes to the literature by integrating perception based and institutional perspectives and provides policy implications for strengthening governance, improving transparency, and enhancing trust to ensure effective policy implementation.