This conceptual paper provides new insights into institutional trust and distrust development. How institutions respond to stakeholder expectations directly impact their capacity to engender stakeholder trust. We examine several contradictions that are fundamental aspects of institutional dynamics and emerge as a result of stakeholder expectations. We discuss the character and composition of these contradictions and outline ways that institutions effectively and ineffectively address these contradictions. Finally, we discuss how stakeholders process institutional contradictions and discuss some general ways that institutions can remediate the negative effects of contradictions.