Abstract: The market system and the state redistribution system, the two fundamental institutional environments in current China, are the focal theme in the academic research on the Chinese society in transition, both at home and abroad. Based on previous discussions on these two types of institutional environments, this study shifted attention from life opportunities to individuals’ generalized trust as a function of different institutional contexts. Using propensity score matching to deal with potential selection biases, this study analyzed the data from Chinese General Social Survey 2010, which revealed significant effects of institutional contexts on individuals’ generalized trust. In particular, employees in the public sector, as compared with those in the private sector (foreigninvested and privately owned enterprises), had higher levels of generalized trust, which reflected the nonmaterial consequences of different institutional arrangements in China. Further mediation tests indicated that political participation and relative deprivation significantly mediated between employment sectors and generalized trust. Those who worked in the public sector possessed a higher level of internal political efficacy and were more likely to get involved in community voting. Such an attitude and behavioral participation promoted their propensity of trusting generalized others. The lower level of their relative deprivation in regards to social and economic status also helped with building their higher generalized trust.

Key words: generalized trust, market mechanism, redistribution mechanism, political participation capability, relative deprivation