Trust, social capital and state

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Trust, social capital and state

• Lecture political science political theory 2
  summer semester 2004
• University of Fribourg

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Program

• Problem of trust
• Levels of trust
• Personal trust
• Generalized trust
• Institutional trust political trust
• State and trust
• Democracy and trust
• Cultures of trust
• Trust as the center of Social capital
• Case studies

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Trust the basic problem

• Why do people cooperate? ? constraints, ?
  economic interests, ? values cultural/moral
  reasons, ? personal relations
• Trust is one reason for cooperation it enables
  it
• Trust has to do with risk, a gamble, a risky
  investement under conditons of uncertainty (?
  Luhmann 1979 , Levi 1998, Strasser 1997,
  Seligmann 1997)
• Trust involves expectations  .we make
  predictions (or have expectations) concerning the
  behaviour of others. If we are confident that our
  predictions will come to pass, we trust these
  others. Trust thus reduces complexity by ensuring
  that the social system is based on mutual
  expectations about actors future behaviour,
  encouraging social actors to select specific
  options of social action and reaction. The basic
  function of coordinating social interaction is
  achieved, and cooperation, rather than
  opportunistic behaviour, is the result. (Clegg
  1996)

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Trust the basic problem II risk and complexity

• At issue is a cooperative venture, which implies
  that the truster possesses a reasonable belief
  that well-placed trust will yield positive
  returns and is willing to act upon that belief
  Thus, the observer can tell if an individual is
  trusting by noting whether a transaction took
  place (...) Trust implies a risk to the truster.
  In some instances the risk may be so low that we
  tend to use the label confidence instead of trust
  ( Levi 1998)
• no decisive grounds an be offered for
  trusting trust always extrapolates from the
  available evidence it is, as Simmel pointed out,
  a blending of knowledge and ignorance Trust
  remains a risky undertaking (Luhmann 1987 26)
• Trust is required for the reduction of a future
  characterized by more or less indeterminate
  complexity (Luhmann 1987)

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Trust the basic problem III trustworthiness and
ethics of trust

• In modal trust relationships, the trusted party
  has an incentive to be trustworthy, an incentive
  grounded in the value of maintaining the
  relationship into the future. That is, my trust
  of you is encapsulated in your interest in
  fulfilling the trust. It is this fact that makes
  my trust more than merely expectations about your
  behaviour (Hardin 2001 3)
• Trust in other people is based upon a
  fundamental ethical assumption that other people
  share your fundamental values. They dont
  necessarily agree with you politically or
  religiously. But at some fundamental level,
  people accept the argument that they have common
  bonds that make cooperation vital. And these
  common bonds rest upon assumptions about human
  nature. The world is a beneficent place composed
  of people who are well-intentioned ( and thus
  trustworthy) (Uslaner 2003 2)

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Trust the basic problem IV to summarize the
idea

• In a strategic perspective
• A trusts B because he presumes it is in Bs
  interest to act in a way consistent with As
  interest. (M.Levi) ? Is the other trustworthy??
  incentives to be trustworthy
• In a moralistic perspective
• I trust others because I believe that others
  share my fundamental moral values (honest
  behaviour) (Uslaner)

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Trust the basic problem V

• If moralistic trust is, contrary to strategic
  trust, a moral dictate to treat people as if
  they were trustworthy ? then what kind of people
  are trustworthy, people like us, friends, people
  of our own community, or those of the broader
  community?
• Why do we trust distrust them?
• Personal experiences, socialisation, experiences
  with institutions, tell us, wether we have
  dispositions to trust
• Trust / distrust depends on the disappointments
  we made in the past
• Levels of trust
• Personal level personal trust families, kinship
  groups
• Generalized trust among strangers
• Institutional trust, trust in politics

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1. Personal trust

• Is it Strategic trust?
• Its based on experience
• Familiarity Vertrautheit
• Can we still speak of trust in the case of
  closely knit networks ? low risk
• ? commitment -gt familal trust
• Traditional form of trust you trust only in a
  familiar world, you distrust strangers
• How exclusive is personal trust?

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2. Generalized/Extended trust

• Trust among strangers
• Most people can be trusted ? trusting people
  we dont know
• Its not based on experience
• Moral foundation? (Uslaner) ? positive view of
  strangers Do you consider others to be a part of
  your moral communitiy?
• Standards of reciprocity
• Golden Rule
• Importance of third-party and third-party
  enforcement

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3. Institutional trust

• Faith in institutions Is it possible? as faith
  in holders? Capacity of government to do the job
  well ? confidence
• Trust in Government is it really important?
• Trust in government is declining
• Problem of trustworthiness of institutions
• Importance of distrust institutionalized
  distrust and distrust in government
• Causal link between institutions and generalized
  trust
• Role of the state as third party enforcement
  do we trust others because we have faith in the
  effectiveness of institutions?
• Trust in political institutions because we trust
  others?

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Role of State institutions for generalized trust

• Third-party enforcement impartial enforcement
  by a legitimate state ? facilitates trust
• States guarantee markets, protect rights,
  facilitate cooperation
• Third-party enforcement supports and increases
  generalized trust ? which increases faith in
  effectiveness of political and legal institutions
• Levi speaks of transference of trust ?
  facilitating trust ? facilitating cooperation
• High level of (generalized) Trust ? institutional
  efficiency ? strength

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Role of the state in promoting generalized trust

• States can promote generalized trust (Levy)
• Condition the state has to be trustworthy
• Honesty and competence of bureaucracy creates
  chances for cooperative behaviour and belief in
  trustworthiness of bureaucrats
• Compliance depends on perception that
  governement acts in the interest of citizens,
  that procedures are fair
• conditions of contingent consent (Levy 88)
  Contingent consent is a citizens decision to
  comply or volunteer in response to demands from a
  government only if she perceives government as
  trustoworthy and she is satisfied that other
  citzens are also engaging in ethical reciprocity
• Ethical reciprocity cooperate under condition
  that others also cooperate

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Trustworthiness of institutions Hardin

• Legitimacy, support and trust
• How many of us invest in trust in government?
• How much distrust in government is necessary?
• Who controls the government? Importance of
  opposition groups for trustworthiness relation
  of failing and distrust
• How important are low voter turnouts for
  explaining distrust/trust?
• having only 5 percent of the citizenry alert and
  committed to politics is all it takes to make
  things work (Hardin 2002 163)
• Experience with institutions reputation of being
  trustworthy
• Most of the time, we can inductively suppose
  that an organization that has been performing
  well in some sense is likely to continue to do so
  unless its conditons are altered (172)

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Efficiency of institutions and generalized trust

• Individual experience with the efficiency or
  inefficiency of institutions ? disappointments
  with instititutions or the officials representing
  them (Rothstein 2000 and Rothstein/Stolle 2002)
• Importance of judicial system and police ? if
  people trust effectiveness and fairness of these
  systems ? generalized trust would be facilitated
  (? see table trust in institutions)
• Effectiveness means are they able to punish
  treacherous behaviour
• Importance of memory historical record of these
  institutuions with regard to fairness and
  effeciveness ? collective memory about actual
  operations of institutions (Rothstein 2000 492)
• Have a look at the society where generalized
  trust is supposed to develop Inclusive and
  exclusive societies ? different cultures of trust
• Trust building institutions Inclusion
  equality identy of community range of trust

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Countervailing powers and trust interdependency
of strong State, strong economy and strong civil
society
Economy
Political system
Civil society
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Democracy and trust Levi

• Democracy as a prerequisite of an appropriately
  trusting citizenry and trustworthy government ?
  institutional protections ? skepticism distrust
• Influence of democracy
• Information ? protection of civil liberties, free
  speech, free assembly, and free press
• Inclusion ? citizenship ? preferences
• Democracy ? change of preferences ? new practices
  ? new values
• Citizen control of government action ? change
  their behavior ? cooperation ? commitments
• Democracy ? inclusion of concerned ?contingent
  consent ? compliance
• Importance of distrust in democracy Levi The
  healthy skepticism of citizens is a prerequisite
  of democracy -

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Democracy and trust Levi II

• Democracy creates as well as solves problems for
  building citizen trust in their government. The
  free press and oversight institutions of
  democracies put government actors under
  extraordinary scrutiny. Open discussion about
  government actions contributes to its
  trustworthiness by providing a check on
  obfuscation and secret promises (or
  promise-breaking). Free speech permits a level of
  public and scientific debate that eliminates
  certain abuses by lowering the costs to the
  normal citizen of both information-gathering and
  monitoring. It is impossible in this day and age,
  for example, to hide nuclear testing or to make
  the claim that it is safe. The current government
  of France has promoted distrust of itself by
  failing to understand these simple facts
  (Margaret Levy)

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Democracy and trustworthiness of government
Political Institutionns rules of the game /
constraints (elections, media, party competition,
change of government, responsability of
government, independant courts etc.)
Institutionalized distrust pressure,
scepticism of public opinion
Distrust / trust
Political actors Governments, politicians,
officials
Public / citizen
Distrust / trust
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Trust, Democracy, politics and knowledge

• How confident can we be, that the right,
  competent politicians are being elected. How do
  we evaluate competence in politics / of
  governments contrary to other social areas
  science (universities), medical doctors,
  engineers.
• Criteria of our election candidates operate with
  a mix of competence, values and interests
  (Hardin)
• But in politics interests are dominating.
  Otherwise why would we have competing experts in
  politics. What are interests, our interests in
  this case
• Often even expert knowledge is not available

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Trust, Democracy, politics and knowledge II

• How can citizens evaluate the effects of
  policies. How can he know what is a good policy?
• We are adopting very often one among other expert
  opinions, because it corresponds to our values.
  Evaluation of the influences of authority of
  experts
• ? Which knowledge deserves our trust? Which
  sources? Which experts?
• Democratic choice does not mean choice of the
  dominant scientific truth. Both are not clearly
  distinguished. INTERESTS are in the centre of
  politics. INTERESTS vs. TRUTH
• We are always deciding according to our opinions,
  dispositions, interests We should discover the
  blind spot in our own judgements. We cannot trust
  ourselves to be able to make the right choice.

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Cultures of trust distrust the case of
Central and Eastern Europe

• Cultures of trust distrust meaning
• specific patterns of norms and networks
• Premodern structures of trust clientelism and
  power networks in countries of former USSR,
  familism, politics based on old and new personal
  networks
• Cultural and political gap between countries of
  central Europe and countries from the former
  Soviet-Union some of these countries cannot be
  considered anymore as transition countries
• Can we really speak of low trust societies?
• Explanations? Origins of trust / distrust?
• The question concerning the causal link between
  institutional and interpersonal trust is not at
  all academic, since we have to face particularly
  in third world countries but also in
  post-communist societies of Central and Eastern
  Europe huge variations of cooperation and
  differences in the cultures of trust.

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Trust distrust in Central and Eastern Europe

• Low Trust societies
• Reasons for the failure of the establishment of
  institutionalized structures of trust
• Old elites
• Old rules of law
• Betrayal of promises
• Corruption
• Culture of secret
• arbitrary,
• No routine procedures
• Money ? mafia

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Trust distrust in Central and Eastern Europe
different explanations II

• Implications for analysis What kind of theories
  do we need?
• Is trust culturally determined? Path-dependant?
  cultural theories
• Levels of generalized trust in society determine
  predispositions to democratic institutions
  government is as good as its people
• ?Consequence change of values difficult, trust
  in democratic institutions would take decades (R.
  Rose)
• Critics relationship between interpersonal trust
  and trust in political institutions direction of
  causal arrow
• interpersonal /generalized trust ? political
  trust or
• Political trust / democracy ? interpersonal/genera
  lized trust

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Trust distrust in Central and Eastern Europe
different explanations III

• Is trust generated by institutional performance
  Institutional theories
• Institutional theories culture can condition
  institutions but is not derministic
• Democratic institutions are catalysts of trust
  by providing economic growth and good governance
  practices
• Trust is being considered as a function of
  performance of institutions economic performance
• In postcommunist countries add the political
  character of institutions ? good governance
  practices

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Importance of political and economic performance
for trust in institutions

• Mishler / Rose Trust or distrust in political
  institutions is substantially endogenous and
  largely determined by the political and economic
  performance of new democracies(2001 55)
• Little effect of generalized trust on
  institutional trust
• ? nature of Communist regime control
• Political trust in post-communist societies
  determined by institutional performance
• Consequence scepticism since bad economic
  perfomance
• Prospects for change governments can generate
  political trust ? good governance, institutions
  can earn trust through efficient economic
  policies ? welfare

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To summarize causal relationship between
generalized trust and trust in institutions I

• Two questions (see slide 11 and 15 Rothstein
  2000, p. 491)
• Are we confident about political institutions
  because we trust other people? ? argument of
  Putnam ? social capital ? The more people trust
  other people, the more they tend to have
  confidence in political institutions.
• Or do we trust other people because we are
  confident about the effective working of
  institutions? Trust from above ?
• If people believe that the institutions that are
  responsible for handling treacherous behaviour
  act in a fair, just and effective manner, and if
  they also believe that other people think the
  same of these institutions, then they will also
  trust other people.(Rothstein 2000 492)
• Importance of institutions of law and order ?
  third party enforcement ? trust in universalism
  and impartialitiy of institutions ? treacherous
  behaviour punished (slide 12, Rothstein
  200222-26)
• Importance of collective memory for a culture of
  trust who defines it, who can change it?
  Influence of political leaders on a given belief
  system?

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To summarize causal relationship between
generalized trust and trust in institutions II
social capital

• The more universal, uncorrupted and impartial
  the government institutions responsible fo the
  implemention of laws and policies are, the more
  social capital your will get(Rothstein 2002)
• ? importance of institutions for generating
  social capital
• ? Lets have a look now to another approach,
  based on a buttom up perspective Putnams
  theory of social capital, the link between trust,
  networks and institutional success
  Society-Centered Model and then we will come
  back to Rothsteins institutional approach

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Trust as a central component of Social capital

• Cooperation is facilitated if a community has
  inherited a substantial stock of social capital
  in the form of norms of reciprocity and networks
  of civic engagement (Putnam 1993 167)
• Social capital features of social organization,
  such as trust, norms and networks, that can
  improve the efficiency of society by facilitating
  coordinated actions
• Networks
• Norms of reciprocity -  Golden rule 
• trust
• The function of social capital is to enable
  individuals to achieve things they could not
  otherwise achieve so well. Coleman ? Hardin
• For the Worldbank social capital "refers to the
  networks and relationships that both encourage
  trust and reciprocity and shape the quality and
  quantity of a societys social interactions. The
  level of social capital has a significant impact
  on a range of development processes(World Bank
  2000 18, see www.worldbank.org/poverty/scapital/i
  ndex.htm.

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Production and reproduction of social capital
trust and norms

• Accumulation of social capital social capital,
  such as trust, social norms and networks increase
  with use and diminish with disuse virtuous and
  vicious circles
• Public good typically undersupplied we
  underinvest in trust formation
• (Generalized) Trust arises from norms and
  networks of civic engagement (Putnam 1993 171)
• If members of the group come to expect that
  others will behave reliably and honestly, then
  they will come to trust one another (Fukuyama
  2000 98)
• Norms that produce social capital include
  virtues such as truth telling, meeting
  obligations, reciprocity
• Norms of reciprocity (combination of altruism,
  solidarity and selfinterest)

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Production of social capital trust and networks

• Trustworthiness ? networks of social exchange ?
  norms of reciprocity
• Formal and informal networks / Vertical and
  horizontal networks
• Networks of civic engagment form of social
  capital ? encourage cooperation (avoid
  opportunism, foster norms of reciprocity,
  reputations)
• Different societies ? different radius of trust ?
  different cultures of trust ? different stocks of
  social capital
• Example sthrength of family bonds differs from
  society to society (Fukuyama 2000 99)
• Difference between warm and cold societies
• We come back to importance of generalized trust
  Virtues like honesty and reciprocity practiced
  outside the family Importance of weak ties ?
  Networks of civic engagement cut across social
  cleavages cooperation on the community level
• Dense horizontal networks ? strong society ?
  strong state

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Putnams strong society strong state thesis and
its critics

• Social capital horizontal networks of civic
  engagement ? performance of polity and economy
• Weakness of civil society vertical networks ?
  no cooperation ? no trust ? weak institutional
  weakness
• Virtuous circles reproduction of social capital
  cumulative and serlf-reinforcing ? high levels
  of cooperation, trust reciprocitiy, civic
  engagement and collective well-being (Putnam
  1993 177)
• Networks (formal and informal) creators of
  social capital
• Critics (ex. Rothstein/Stolle 2002,
  Portes/Landolt 1996))
• Relation between membership and social capital is
  not clear
• Determinism of the theory social capital
  determined by history
• What are the really important interactions for
  the creation of social capital? ? good and bad
  networks, organizations -gt dark side of social
  capital

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Critics Putnams social capital theory II

• Norms of cooperation in any particular network
  are likely to change from one situation to
  another. They can represent social capital in one
  context and unsocial capital in another --gt
  negative social capital, ?Mafia, ?Oklahoma
  bomber, ? exclusion
• Two faces of networks they can be agencies of
  development or "rent-seekers depleting the public
  treasury and inhibiting economic growth."
• Whats the logic of causal mechanism? trust ?
  state performance How trusting people create
  better service performance? Does governmental
  performance influence trust? -? Rothstein/Stolle
  2002 ? Importance of institutions of order and
  implementation for generalized trust
• Problems of measuring social capital
• Problems of definition risk of circularity
• Problems of aggregation link between micro and
  society level