Trust

Edit Article

Definition

Trust is the foundation of most personal relationships, which in turn are key determinants of human well-being and economic development. Theoretical and empirical analysis shows that high levels of interpersonal trust make many aspects of life more enjoyable and productive. Trust, if it is matched by trustworthy behaviour in others, reduces the costs of dealing with risks and uncertainty.[1]

Generally speaking, trust refers to the confidence that people have in others that they will act as we might expect. Hence, it reflects people’s subjective perception of people’s reliability. But the relevance of trust goes further than that: trust may be regarded as a key driver of progress within a specific society. Trust is often associated with the concept of social capital, and sometimes it is even considered a proxy for it. Indeed, several authors have focused on trust when studying social capital and the determinants of human well-being. Arrow,[2] for example, remarked that much of the economic backwardness in the world can be explained by the lack of mutual confidence and trust. Since then, scholars from different fields have investigated the role of trust for economic and social development.
Theoretical analysis shows that trust is considered a proxy or key component of social capital. Indeed, social capital affects economic research, namely it suggests a different understanding of human actions than that embodied in traditional economic models or better involves a range of aspects and patterns in social interactions that are ignored by conventional economic models.[3]

Trust and Social Capital

According to the social capital literature, trust is based on the concept of individual expectations and, in particular, on the confidence that others will act as we expect.
One broad distinction within the social capital literature is between those theories that stress the role of networks and relationship among people and those that emphasise the importance of shared norms.

  • The first interpretation, developed by Coleman[4][5] within the framework of the sociology of rational choice, considers networks as a source of social capital and emphasises the relations that people have within each network. Coleman defines social capital as the component of human capital that allows members of a given society to trust one another and to co-operate in the formation of new groups and associations. In Coleman’s perspective, individuals do not act independently of each other but develop trust through continuous interactions. Social capital, in contrast to physical and human capital, is embedded in the relationships among individuals. In other words, the patterns of social organisations and interactions determine social capital. In Coleman’s perspective, the degree of trustworthiness of social organisations is the most important form of social capital.
  • Putnam[6] and Fukuyama[7] shifted the focus to the cultural dimension of social capital, by emphasising the inclination of people toward co-operation, trust, reciprocity and civic associations. Both authors stressed the willingness of people to co-operate with each other, and underlined how trust among individuals is rooted in a shared culture. Putnam first suggested an idea of social capital that has greatly influenced the research that followed, and that has since become the most recognised approach. He defined social capital as referring to those “features of social life, networks, norms and trust that enable participants to act together more effectively to pursue shared objectives[6]. In this approach, trust is an outcome of networks and norms, which both serve as a prerequisite for building trust[8]. This perspective is further elaborated by Fukuyama, who stressed the integration of social capital and trust. Fukuyama defined social capital as “an instantiated informal norm that promotes co-operation between two or more individuals[9]. The norms that constitute social capital can range from reciprocity among friends, to complex and articulated doctrines such as religions. Building on this perspective, trust may be regarded as enforced not only for instrumental reasons – i.e. one person co-operates with another because this facilitates the attainment of his personal goals – but also because shared norms may enhance the chances of social punishment in the event of non-cooperative behaviours[10].

The OECD[3] provided a definition of social capital very close to the formulation proposed by Putnam which recognises that both networks and shared norms play a role in creating the conditions for co-operative behaviours among people based on trust.
Starting from these definitions, several authors have further developed the concept of social capital emphasising the specific role of trust. For example Alesina and La Ferrara[11] agree with Putnam in considering trust as one of the major components of social capital. They argue that social capital enhances economic growth by improving the functioning of public institutions and by facilitating economic transactions.

Trust and individual expectations

Most definitions of trust are based on the concept of individual expectations and, in particular, on the confidence that others will act as we expect. Arguing on these lines, Sarageldin and Dasgupta[12] described trust as “the expectation of one person about the action of others that affects the person’s choice”. Gambetta[13] gave a similar definition, while also introducing the concept of subjective probability: he described trust as the subjective probability with which a person (or a group) assesses that another person (or a group) will perform a particular action, with this subjective probability influencing a person’s own actions.
Williamson[14] uses the term trust to describe personal relationships like friendship, love and kinship, or features of the institutional environment in which contracts and transactions are embedded.

Using a general formulation, trust can be meant as the relation between two parties concerning a particular action or range of actions[15]. Hardin[16] conceptualise the term of trusting through the relationship “A trusts B to do X”.

Depending on the characteristics of A and B, and on who the trust is directed to, it is possible to distinguish different forms of trust.

  • Interpersonal trust is a multidimensional concept, distinguished by several authors according to whether it is directed to relatives or friends, on one side, or to strangers, on the other and its measures should reflect such multidimensionality. Some authors show different interpretation about the interpersonal trust. For example, Putnam uses the term thick trust when it is based on experiences embedded in personal roots and relationships, and is generated by networks of kin and friends. Conversely, when A and B are people who do not know each other there is thin trust, which is based on reputations, norms and signals such as appearance or demeanour. A broad distinction is between strategic trust, when A trusts someone that he or she knows personally and moralistic trust when A trusts a stranger[17].
  • Political trust (also called by some authors systemic trust) can be divided into a macro and micro component according to whether it describes trust in the political system and its institutions or trust in the personnel in charge of these institutions.
    At a macro level, this type of trust is often referred to as organisational or institutional trust. This definition reflects the degree in which individuals have confidence in the institutions (government and parliament) and public administration of the country where they live[18]. Institutional trust is essential for the stability of societies and for the functioning of democracy.
    -  At a micro level, this type of trust is sometimes referred to as individuals’ political trust. In this perspective, people trust or distrust government or institutions because of their approval or disapproval of specific political leaders[19].

 

Measuring Trust

The different forms of trust can be measured in different ways, and with each form of trust arises specific methodological issues. In particular, interpersonal trust and institutional trust are different concepts that need to be operationalised in different ways. The need for distinguishing them lies in the fact that they enter people’s live in different ways, and that they have different effects on various dimensions of a country’s progress.

The World Values Survey (WVS), the Gallup World Poll and the Eurobarometer are the most important sources where it is possible find trust measures.

Journal Article on Measuring Trust

Many of us use the famous “most people can be trusted” question as a measure of general interpersonal trust in cross-national comparisons. Yet a new article, How General is Trust in ‘Most People’? Solving the Radius of Trust Problem[20], published in October 2011 the American Sociological Review, co-authored by International Society for Quality of Life Studies (ISQOLS)-member Jan Delhey, found out that cross-national comparisons of trust figures are more complicated than previously thought, in particular when Western and Asian countries are compared. The authors come up with a calibrated measure of general trust, which is truly comparable across countries and cultures.

 

Interpersonal Trust

World Values Survey

The World Values Survey (WVS) is the most commonly used cross-country survey to measure interpersonal trust. The WVS measures interpersonal trust relying on the question developed by Rosenberg[21]: “Generally speaking, would you say that most people can be trusted or that you need to be very careful in dealing with people?”. The main indicator resulting from Rosenberg’s question is the percentage of people who reply “most people can be trusted”. Figure 1 shows how interpersonal trust compares across countries based on data from the WVS. Levels of interpersonal trust are very different from country to country. People in Norway, Sweden and Denmark report the highest levels of trust in other people (more than 60% of interviewed answered that most of people can be trusted) while Turkey, Rwanda and Trinidad and Tobago are those with the lowest level of interpersonal trust (5% or less think that most people can be trusted). Most OECD countries have level of interpersonal trust higher than the world average, but there are exceptions such as Mexico, Portugal and Turkey. On average, the level of trust among OECD countries is similar to the world average


Figure 1. Interpersonal trust (share of people who think that most people can be trusted)

Trust Figure 1.jpg

Source: World Value Survey, wave 2005-2008.
Note: The “dotted” bars refer to OECD countries. For Austria, Belgium, Czech Republic, Denmark, Greece, Hungary, Iceland, Ireland,
Luxembourg, Portugal and the Slovak Republic, data refer to the wave 1994-1999. For Norway data refer to the 1996.

 

During the period covered by the WVS[22], interpersonal trust also appears to have changed significantly in several countries. Figure 2 shows that interpersonal trust has decreased by more than 20% (relative to the level recorded in the first survey available) in eleven countries, while it has increased by more than 20% in only three countries. In particular, interpersonal trust decreased by more than 50% in Mexico, Portugal and Turkey, while it decreased by more than 40% (in less than 20 years) in Poland and Spain. Only Sweden, Switzerland and Denmark show a significant increase in the level of interpersonal trust.

Figure 2. Change in interpersonal trust from the earliest to the latest survey in OECD countries. (Percentage difference base=earliest survey)

Trust Figure 2 color.jpg

Source: World Value Survey, wave 2005-2008.
Note: For each country the years indicate the earliest and latest survey which collected information on interpersonal trust.

Gallup World Poll

The Gallup World Poll led an investigation over several years (wave) using the wallet question.

The wallet question allows the measurement of different forms of interpersonal trust:

  1. trust in neighbours;
  2. trust in strangers;
  3. a particular aspects of institutional trust, i.e. trust in police staff[22]

This question is also useful to assess the relations between specific forms of trust and other dimensions of progress.

The 2007 wave of the Gallup World Poll asked respondents in 86 countries whether it was likely that a neighbour, the police, or a stranger would return to the owner their lost wallet or valuables contained in them. Gallup data on the wallet question show Austria, Finland, Ireland, New Zealand, Norway, and Switzerland in the top 10 of countries with the highest level of interpersonal trust for the three types of agents. Police and neighbours are trusted almost equally to return valuables in 21 countries, but in the majority of countries, citizens are more trusting of their neighbours than they are of the police. Not surprisingly trust in strangers is lower, but it is relatively high in countries such as New Zealand, Switzerland and Norway. However, in nearly 80 nations around the world, less than one-quarter of respondents believe strangers would return a lost wallet to its rightful owner. In Cambodia, El Salvador, and Laos, almost no one believes strangers would return valuables.

 

Eurobarometer

Eurobarometer uses a question that measures how much citizens of one country trust citizens of other European countries. This question has the advantage of identifying the person whose trustworthiness is being assessed but it fails to specify the type of behaviour under consideration. However, this question should be probably considered more as an indicator of stereotyped distrust with respect to specific ethnic groups or nationalities rather than providing information relevant for interpreting people’s actual behaviour.

 

Institutional Trust[edit]

World Values Survey

The WVS asks individuals to rate their confidence in a large number of institutions and organisations starting from the parliament, which is the central representative institution of democracies, and including government, civil service, political parties, armed forces, police, press, churches, labour unions, the justice and education systems. There are large differences across OECD countries in terms of citizens’ trust on different institutions. On average, 38% of individuals across 30 OECD countries reported a high trust in parliament but with large differences between countries (Figure 3). Trust in parliament is high in Iceland, Norway, Luxembourg and Turkey (more then 60%) but significantly lower in Korea, Mexico, Greece, Japan, Germany, United States, Poland and Czech Republic (less than 25%).

Figure3. Institutional trust in OECD countries. Share of people expressing “high” confidence in each institution

Trust - Figure 3.jpg

 Source: World Value Survey, wave 2005-2008.  

Note: For Austria, Belgium, Czech Republic, Denmark, Greece, Hungary, Iceland, Ireland, Luxembourg, Portugal and the Slovak Republic data refer to the wave 1994-1999; for Norway, data refer to the 1996. The indicators refer to the share of respondents  indicating either “a great deal” or “quite a lot of confidence” in the parliament, the government and the political parties.

Confidence is generally lower for governments than for parliaments, with only 23% of citizens of the nineteen OECD countries considered reporting a high level of trust. Across countries, the correlation between trust in parliament and trust in government is quite strong, and the ranking of the countries is pretty much the same. Cross-country differences are also sizable when considering the perception of citizens on the functioning of the judiciary system. On average, confidence in the judiciary is much higher than in the case
of the legislative and executive branches of governments, with 55% of respondents across thirty OECD countries reporting a high level of trust in this institution, varying from more than 80% in Finland and Japan to less than 35% in Poland and the Czech Republic. While the level of trust in each country varies significantly with respect to the institution considered, the judiciary system is always the most trusted institution.  

 

Gallup World Poll

The Gallup Word Poll measures citizens’ confidence in key institutions such as the military, the judiciary and courts, and national governments, as well as confidence in the honesty of elections. The data from these questions are aggregated by Gallup in a composite National Institutions Index[23]. According to this index Finland, Denmark, Norway and The Netherlands are the countries with the highest level of trust in institutions while Hungary, Czech Republic and Korea are those at the bottom of the list. Both Spearman’s rho and Kendall’s tau, calculated on countries ranked according to trust in Parliament and the National Institutions index, show a moderate correlation because the National Institutions index take into consideration also other institutions as well as citizens’ perception of the honesty of elections.

Both the Gallup World Poll and the WVS use a common methodology and questionnaire, which allow comparing results among countries and over time. Moreover the Gallup collects additional information on factors influencing institutional trust such as perceived corruption. These data show that institutional trust is closely related to perceptions of corruption. It uses two questions on corruption in businesses and in the government: this allows building an aggregate corruption Index. Figure 4 shows a strong negative correlation between the Gallup National Institutions Index and the Corruption Index: countries with a high level of perceived corruption (like the Slovak Republic, Poland, Hungary, Korea and Italy) have below-average levels of trust in institutions, while countries scoring a low level of perceived corruption (like Norway, Denmark, and Finland) have much higher levels of institutional trust.

Figure 4. Correlation between National Institutions index and corruption index in 28 OECD countries

Trust - Figure 4.jpg

Source: Gallup World Poll, Year 2007

Eurobarometer

Eurobarometer (EB)’s standard survey also includes a specific set of questions on trust in European institutions[24], which is collected twice every year since 1999 with a harmonised methodology. Data collected in autumn 2008 showed that 47% of the Europeans trusted the European Commission and 51% the European Parliament but trust in these institutions was declining compared to autumn 2007. Finally the EB provides also information on trust in statistics which is an important dimension of democracy.

Trust and Progress of Societies

Evidences have highlighted relations between interpersonal and institutional trust and some dimensions of the progress of societies, as identified in the Taxonomy created by the OECD Global Project on “Measuring the Progress of Societies”. Indeed, researchers have argued that higher levels of social capital are associated with higher well-being, as well as greater economic development[2][7], more effective political institutions[25], and lower crime rates[26].
Here it shall show relations between different forms of trust and some particular dimensions of the progress of societies such as economic growth, governance, subjective well-being, income inequality and mortality and health; while the relation between trust and other dimensions of progress are either unexplored or still unclear.

Economic growth

Researchers investigated on a positive relationship between interpersonal trust and economic growth. This evidence is consistent with the intuition that when people trust each other more they are more willing to trade, which raises their economic well-being. Namely, when A trusts B to do X, where X is an economic transaction, interpersonal trust facilitates co-ordination and co-operation for mutual benefit, reduces the incentives for opportunism, and helps finding solutions to collective action problems[25][8].

Various theories have stressed the role of interpersonal trust in facilitating market exchanges. For instance, Arrow[2] and Roth[8] argue that trust improves the functioning of economic systems because market exchange requires, or is greatly facilitated by, trust. This has a direct effect on economic growth by reducing transaction costs and making possible types of organisations that are less encumbered by extensive rules, contracts, litigation and bureaucracy[7].

In literature has documented that a higher level of interpersonal trust makes it easier to solve problems that require collective action[27][8]. Also, several studies provide empirical support to the notion of a positive relationship between trust and economic development. Tabellini[28] analysed the correlation between culture (measured by trust, respect for others and confidence in individual self-determination) and economic development in a sample of European countries, showing that these variables favour economic development. These cultural traits are strongly correlated with economic development not just in European countries, but also in a broad sample of countries.

Governance

Several studies have highlighted  that higher levels of various types of trust can foster better Governance and increase institutional effectiveness. Empirical researches demonstrate that interpersonal trust can enhance governmental accountability, facilitate agreement when political preferences are polarised, and promote political innovation[29]. Furthermore, where interpersonal trust is higher there is less need for the government to invest in formal mechanisms to enforce contracts and rules, leaving more resources available for other purposes. Moreover, trust through political participation, increases individuals’ knowledge of politics and public affairs. Such knowledge, especially if shared among a large number of citizens, increases government accountability and is an important check on the inclination of politicians and bureaucrats to pursue their personal interests. In the United States data from the 1992 National Election Study show results consistent with these conclusions.

Some authors argued that higher trust can also reduce inefficiencies associated with political polarisation, and facilitate agreement among citizens[30] .

Other studies have shown that trust facilitates political innovation. More trustful societies reach agreements more easily, and respond quicker and better to newly identified problems.

Subjective well-being

The relationship between interpersonal trust and subjective well-being has been highlighted in several studies[31]. Evidence shows that living in an environment where other people can be trusted has substantial effects on the subjective well-being of respondents, as high level of trust improves the network of interpersonal relationships among people. Trust in the workplace also has also a strong effect in improving subjective well-being[32][31]. Higher levels of trust are closely associated with greater life satisfaction and subjective well-being in communities, workplaces and nations.

Income inequality

The relation between trust and income inequality is strong. Some authors argue that inequality is one of the best predictors of trust. In order to that, Economic inequality reduces trust because people in different strata will be less likely to share a sense of common purpose and to trust each other. Moreover economic inequality reduces the optimism for the future and a high level of pessimism may stifle interpersonal trust.

Mortality and health

Interpersonal trust is also important for people’s heath, and the relation is typically mediated by the effect of income inequality on trust. In an attempt to explain why American states with smaller income differences had higher life expectancies, Kawachi et al.[33] showed that trust act as a mediator between inequality and mortality. They found that people living in areas with low levels of interpersonal trust have higher (age-adjusted) mortality rates.35 According to this study, each percentage increment in the share of people agreeing that others would take advantage of them was associated with an increase in mortality of 6.7 deaths per 100 000. This study points to the existence of a positive effect of income inequality on mortality mediated by interpersonal trust. When income inequality increases so does the level of social mistrust, which is strongly related to mortality; if the effect of interpersonal trust is controlled for, the residual effect of income inequality on mortality becomes negligible. Thus, Kawachi and his colleagues argue that lower trust is one of the pathways through which higher income inequality exerts its toll on population mortality.

References  [edit]

  1. Helliwell J.F. (ed.), (2001), The Contribution of Human and Social Capital to Sustained Economic Growth and Well-Being, OECD and Human Resources Development Canada.
  2. 2.0 2.1 2.2 Arrow K., (1972), “Gifts and Exchanges”, Philosophy and Public Affairs, Vol. 1 No.4, pp.343-62.
  3. 3.0 3.1 OECD, (2001), The Well-being of Nations. The Role of Human and Social Capital, OECD, Paris.
  4. Coleman J., (1988), “Social Capital in the Creation of Human Capital”, The American Journal of Sociology, Vol. 94, The University of Chicago Press.
  5. Coleman J., (1990), Foundations of Social Theory, Harvard University Press, Cambridge MA.
  6. 6.0 6.1 Putnam R. D., (1993), “Making Democracy Work: Civic Traditions in Modern Italy”, Princeton University Press.
  7. 7.0 7.1 7.2 Fukuyama F., (1995), “Social Capital and the Global Economy: A Redrawn Map of the World”, Foreign Affairs, Volume 75, No. 4, September/October.
  8. 8.0 8.1 8.2 8.3 Roth F., (2006), “Trust and Economic Growth: Conflicting Results Between Cross-Sectional and Panel Analysis”, Ratio Working Papers 102, The Ratio Institute.
  9. Fukuyama F., (2000), “Social Capital and Civil Society”, IMF Working Papers No. 74, March, International Monetary Fund.
  10. Guiso L., Sapienza P., Zingales L., (2004), “The Role of Social Capital in Financial Development”, American Economic Review, Vol. 94, No. 3, pp. 526-556, June, American Economic Association.
  11. Alesina A., La Ferrara E., (2002), “Who trusts others?”, Journal of Public Economics, Vol. 85, No. 2, pp. 207-234, August, Elsevier.
  12. Serageldin I., Dasgupta P., (2001), Social Capital: A Multifaceted Perspective, The World Bank, Washington.
  13. Gambetta, D. (2000) “Can We Trust Trust?”, in Gambetta, D., (ed.), Trust: Making and Breaking Cooperative Relations, Basil Blackwell, University of Oxford.
  14. Williamson O.E., (1993), “Calculativeness Trust, and Economic Organization”, Journal of Law and Economics, Vol. 36, N. 1, pp. 453-86, April, University of Chicago Press.
  15. Kohn M., (2008), Trust, Oxford University Press, Oxford.
  16. Hardin R., (2004), Trust and Trustworthiness, Russell Sage Foundation, London.
  17. Uslaner E. M., (2002), The Moral Foundations of Trust, Cambridge University Press, Cambridge.
  18. OECD, (2007), Society at glance 2006, pp.112-113, OECD, Paris.
  19. Blind P. K., (2006), “Building Trust in Government in the Twenty-First Century: Review of Literature and Emerging Issues”. Paper presented at the 7th Global Forum on Reinventing Government, Building Trust in Government, June 2007, Vienna.
  20. Delhey, Jan/Newton, Kenneth/Welzel, Christian (2011): How General is Trust in ‘Most People’? Solving the Radius of Trust Problem. American Sociological Review. Vol 76, No. 5, p. 786-807.
  21. Rosenberg M. J., (1956), Cognitive structure and attitudinal affect, The Journal of Abnormal and Social Psychology, n. 53, 367-372.
  22. 22.0 22.1 The World Values Survey grew out of the European Values Survey (EVS) in 1981. The WVS is a worldwide investigation of socio-cultural and political change. It is conducted by a network of social scientists at leading universities all around the world. The second wave of the WVS was carried out after about ten years in 1990. Since then three further waves followed at intervals of approximately 5 years.
  23. Gallup, (2008), State of the world. 2008 Annual report, University press, Washington.
  24. http://ec.europa.eu/public_opinion/archives/eb/eb70/eb70_en.htm
  25. 25.0 25.1 Putnam R. D., (1995), “Bowling alone: America’s Declining Social Capital”, Journal of Democracy, Vol. 6, No.1, pp. 65-78, The Johns Hopkins University Press.
  26. Hagan J., Merkens H., Boehnke K., (1995), “Delinquency and disdain: Social capital and the control of right wing extremism among East and West Berlin youth”, American Journal of Sociology, 100, 1028-1052.
  27. Whiteley P. F., (2000), “Economic Growth and Social Capital”, Political Studies No. 48, No. 3, pp 443- 466, Political Studies Association.
  28. Tabellini G., (2006), “Culture and Institutions: Economic Development in the Regions of Europe”, Working Papers No. 292, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University, Milano.
  29. Knack S., (2000), “Social Capital and The Quality of Government: Evidence from the United States”, World Bank Policy Research Working Paper, No. 2504, December.
  30. If trust is higher, government majorities and opposition are more open to fruitful debate and more likely to agree on ground rules(Putnam,2000).
  31. 31.0 31.1 Helliwell, J. F., Huang H., (2008), “Well-Being and Trust in the Workplace.” NBER Working Papers No. 145989, NBER, Cambridge, MA.
  32. Helliwell, J. F., Huang H., (2005), “How’s the Job? Well-Being and Social Capital in the Workplace.” NBER Working Papers No. 11759, NBER, Cambridge, MA.
  33. Kawachi et al., (1997), “Social Capital, Income Inequality and Mortality”, American Journal of Public Health, September 1997, Vol. 87, No. 9.

 

See Also

Further reading

  • Delhey, Jan/Newton, Kenneth/Welzel, Christian (2011): How General is Trust in ‘Most People’? Solving the Radius of Trust Problem. American Sociological Review. Vol 76, No. 5, p. 786-807.
  • Why no looting in Japan? (Aidwatch 15.03.2011) – Amidst the heartbreaking devastation in Japan, many have noticed how much social solidarity — and little stealing — there has been.

External links