Bad government performance and citizens’ perceptions: A quasi-experimental study of local fiscal crisis

The link between actual government performance and citizens’ performance perceptions has been controversial. Given the prevalence of negativity bias, however, the link between bad performance and citizens’ perceptions could appear to be strong. To explore this theoretically unconfirmed link, this study uses a quasi-experiment that contrasts a Japanese town in fiscal crisis, involving tax increases and service cuts, with a control village not in fiscal crisis. Using a difference-in-differences analysis with a careful retrospective pretest, it finds negative effects of the fiscal crisis on citizens’ process perception, while it shows no effects on citizens’ service satisfaction and trust in the mayor, council, and administrators. The study further finds positive associations between citizens’ performance perceptions and civic engagement. It discusses these findings to identify the boundary conditions in which a bad performance–negative perception link is likely to appear. Points for practitioners: Psychology literature on negativity bias suggests that the causal links and mechanisms between bad performance and negative perceptions are stronger than those between good performance and positive perceptions. Not only citizens, but also politicians and administrators, hold negativity bias. Their blame-avoidance strategies could alleviate the growth of citizens’ negative perceptions with bad performance. Participatory governance might moderate the bad performance–negative perception link by placing citizens in a performance-improvement process and promoting their interaction with government officials.