Public Participation and Trust in Government: The Case of the Korean Financial Regulatory Agency

Abstract

This study explores a theoretical model that focuses on the relationship between regulatee participation and trust in the financial regulatory agency through the mediation effects of transparency, fairness, competency, and independence. The research model uses the 2013 Financial Regulatory Agency Perception Survey, collected from employees of financial regulatees in South Korea (including banks, securities investment, insurance, and credit card companies). The results show that in financial regulatory governance, regulatee participation is positively associated with the regulator's trustworthiness through the mediation of transparency, fairness, competency, and independence. This study contributes to the financial regulation area and democratic governance by connecting participatory decision-making with financial regulation and also suggests new managerial implications for financial regulators.