The impact of trust in governance networks

1
The impact of trust in governance networks

• Erik-Hans Klijn
• Department of Public Administration
• Erasmus University Rotterdam
• Paper part of research on trust (but embedded in
  research on (governance) networks and complex
  decision-making)
• Results of survey among practitioners involved in
  environmental projects

2
Networks and Trust

• Networks
• some of the literature networks as dominated by
  trust relations (opposed to market and
  hierarchy) network governance
• Not a very promising research direction
• Networks are characterized by many different
  coordination mechanisms (including market
  mechanisms and traces of hierarchical steering)
• Network governance is a very wide concept, I
  prefer governance networks
• Governance networks
• Basically a set interdependent actors (public
  private and semi private) that interact and shape
  a social structure during interaction
  (interaction patterns, social rules, perceptions
  on social problems etc)
• Interactions emerge around social problems,
  service delivery tasks or availability of
  governmental resources/programs

3
The growing interest in trust

• a lot of attention to the theme of trust
• More in business administration than public
  administration
• especially in alliances and (relational)
  contracts
• Despite williamson statement that trust is a
  mistake
• why this attention to trust
• network society complexity of social relations
  (diminishing of trust, globalization)
• the need for innovations (alliances)
• Relational contracting and the monitoring
  problems of contracts

4
Why interesting for governance networks

• We witness more horizontal coordination where
  hierarchical control does not seem to deliver
  much
• Horizontal coordination between actors not much
  possibilities to enforce decisions
• We need innovative integrated solutions (for
  complex policy and service problems) that call
  for information exchange and cooperation

5
What is trust?

• Lot of different meanings (some very broad
  Putnam, Fukuyama) Here
• A (more or less) stable perception of actor A
  about the intentions of actor B
• the expectation of actor A that actor B will
  refrain from opportunistic behavior if
  opportunity arises
• Trust
• related to uncertainty
• is not an action (but an action can follow from
  trust
• Is not the same as rules (although some rules can
  enhance trust)

6
Why is trust beneficial in networks?

• Facilitating cooperation
• trust reduces uncertainty
• saving transaction costs
• solidifying co-operation
• enhancing investments and stability in relations
• encourages investments
• enhances performances
• stimulating learning and knowledge exchange
• stimulation innovation
• Discussion lowers transaction costs or enhances
  transaction value (the last more i think)

7
Problems with trust

• trust has to be build during interactions
• it is no quick management instrument
• it can be damaged very easy but it is hard to
  build
• Transaction costs Weak and strong trust links in
  networks?
• trust is vulnerable for opportunistic behavior
• it is a cheap coordination mechanism
• but it lacks security against opportunistic
  behavior
• can lead to kinds of closure and group think (in
  case of too much trust between actors and too
  closed networks)

8
The research

• Aim
• Case studies we find that trust is important and
  that it can be nurtured (Edelenbos-Klijn, 2007),
  but does that hold for larger numbers?
• Trust for assessing impact you need either many
  cases or larger quantitative data
• to look for importance of trust in environmental
  projects (governance networks)
• See if the level of trust is correlated to
  (perceived) outcomes
• Is trust related to managerial activity?

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Questionnaire (web based)

• Questions on trust, on managerial strategies,
  project characteristics, organisational form and
  on (perceived) outcomes
• Respondent had to fill in the question for a
  specific project they were most involved in
• Characteristics projects
• Took a long time (medium pass trough 10 years)
• Number of involved actors average 11,78
• Wicked issues most of the projects involve
  various environmental functions (average 2,98
  maximum 6)
• Function houses, business terrain, water
  development, environmental development and
  commercial development

10
Measurement of trust

• Measurement of trust
• 1. Agreement trust The parties in this project
  in general live up to the agreements made with
  each another
• 2. Benefit of the doubt The parties in this
  project give one another the benefit of the doubt
• 3. Reliability The parties in this project keep
  in mind the intentions of the other parties
• 4. Absence of opportunistic behavior Parties do
  not use the contributions of other actors for
  their own advantage
• 5. Goodwill trust Parties in this project can
  assume that the intentions of the other parties
  are good in principle
• Trust items are related (cronbach .73)

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Measuring outcomes

• Outcomes
• Process outcomes (have conflicts resolved
  adequately, were there disturbing deadlocks, had
  involved actors frequently contact, do results
  get support from involved actors, etc.) (cronbach
  .80)
• content outcomes (are innovative ideas developed,
  do solutions that are developed deal with the
  problems at hand, do benefits exceed costs, are
  solutions durable for the future etc) (cronbach
  .84)

12
Network management strategies

• Four types of strategies
• Arranging temporarily organizational
  arrangements,
• Connecting, activities to activate actors,
  connect their strategies etc
• exploring content activities to increase variety
  of solutions, collecting information etc
• process agreements temporarily rules about
  interactions
• We had 16 items measuring managerial strategies
  (4 items for each type)
• Factor analysis show that the types in general
  hold although not all statements belong to the
  type they are supposed to measure

13
Findings trust is important and related to
managerial activity

• Trust is strongly related to perceived outcomes
  according to our findings both to process
  outcomes and to content outcomes
• Management strategies also are clearly related to
  outcomes but
• Al four strategies have effect on process
  outcomes
• Only two have clear relation with content
  outcomes (that is exploring and connecting
• Interestingly the two others are the strategies
  that are most closely related to organizational
  structure!
• We can find no relation between organizational
  form (project group, project bureau judicial
  entity and no organizational form) and outcomes
• When we add the four strategies trust is still
  significant and the total explained variance goes
  up but the explained variance from trust only
  goes down but remains significant
• Thus managerial strategies have direct impact on
  outcomes but also impact on the level of trust

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Trust and managerial strategies

• If we look at the relation between trust and the
  four identified network management strategies
• Three of the four strategies are positively
  related to trust (but connecting and exploring
  the strongest)
• Arranging is not (again the strategy that most
  resembles organizational structure)
• Local civil servants have more trust in other
  partners than central civil servant local civil
  servants are more intensively attached to these
  projects (project champions)

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Conclusion and Discussion (1)

• There seems to be a clear correlation between
  trust and perceived outcomes trust is fairly
  strong predictor for good outcomes!
• A relation that sustains as we put managerial
  strategies into the analysis
• Managerial strategies (at least strategies of
  connecting, arranging and process agreements) do
  contribute to trust trust is manageable
• Limitations we did not look at longer processes
• We looked at perceived outcomes rather than real
  outcomes

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Conclusions and discussions (2)

• Nevertheless findings point out that projects
  benefit from a constellation of factors in which
  trust and the active employment of managerial
  strategies are crucial
• A plea to pay attention to managerial effort in
  stead of organizational factors when we look for
  ways to improve outcomes (matches other findings
  I am recently involved with)
• A bit discouraging for most politicians I dont
  think large scale organizational changes, putting
  agencies at further distances and all those ideas
  will contribute much to the performance and
  outcomes of public policy and services
• I suspect every time we do find relations between
  organizational measures and outcomes, the
  decisive intermediating factor will be managerial
  activity
• Its the management stupid!