Evaluating the Impact of Institutional Performance and Government Trust on Farmers’ Subjective Well-Being: A Case of Urban–Rural Welfare Gap Perception and Family Economic Status in Shaanxi, Sichuan and Anhui, China

In the modern world, fostering comprehensive social sustainability has become one of the major concerns. Interestingly, rural livelihood may significantly comprise the compelling performance evaluations of governmental institutions’ performances. Governmental institutions’ performances in rural areas largely depend on whether they can gain relatively higher trust levels of marginal farmers. However, the critical interaction between these two prospects may foster farmers’ subjective well-being (SWB). Therefore, the study aims to model and test institutional performance, government trust, and farmers’ subjective well-being by utilising a survey of data from 963 farmer households in Shaanxi, Sichuan, and Anhui provinces, China. We have adopted structural equation modelling (SEM) to craft the study’s findings. However, in the literature, political performance is widely quantified by the urban–rural welfare and economic status gap; thus, in the core model, we have incorporated and measured the mediating role of the urban–rural welfare gap and household economic status. The results show that institutional performance, social insurance performance, and ecological livability performance have a significant and positive impact on institutional performance and government trust and eventually derive farmers’ SWB. However, the role of environmental livability performance is more substantial than social insurance performance in quantifying governmental trust and institutional performance. Moreover, it has a significant positive impact on the subjective well-being of farmers, and the effect of policy trust is not substantial. The results of further mediation and moderation effects show that social insurance performance and ecological livability performance can enhance the subjective well-being of farmers through the indirect transmission of institutional trust. In contrast, the mediating impact of policy trust is not significant. For farmers with higher economic status, institutional performance has a more substantial effect on the subjective well-being of farmers with a relatively smaller perception of the urban–rural welfare gap and lower family economic status.