Skip to main content Accessibility help
×
Hostname: page-component-78c5997874-mlc7c Total loading time: 0 Render date: 2024-11-02T23:36:51.757Z Has data issue: false hasContentIssue false

7 - Institutions, Trust, and Social Order

Published online by Cambridge University Press:  05 December 2015

Karen S. Cook
Affiliation:
Stanford University USA
Edward J. Lawler
Affiliation:
Cornell University, New York
Shane R. Thye
Affiliation:
University of South Carolina
Jeongkoo Yoon
Affiliation:
EWHA Women's University, Seoul
Get access

Summary

Abstract

Trust theories suggest that the human capacity to trust and to be trustworthy is an important element in the production of micro social order. Trust can take the form of generalized beliefs (attitudes) about the trustworthiness of people in the abstract or be based on information about behaviors indicative of the trustworthiness of specific others in particular situations. In either case, trust involves an expectation that one or more others will cooperate or collaborate, despite the opportunity to exploit or act out of pure self-interest. We explore the general role of trust in the production of collective efforts and its limits as the basis for large-scale cooperation and macro-social order.

INTRODUCTION

Trust is important not only because it increases the regularity and predictability of social interaction, but also because it leads people to collaborate and generate joint goods that otherwise would not be produced (Yamagishi and Yamagishi 1994; Fukuyama 1995; Yamagishi, Cook, and Watabe, 1998; Zak and Knack 2001; Knack and Zak 2003; Cook, Hardin, and Levi 2005). It also extends the reach of social control mechanisms especially when monitoring and sanctioning are not possible. In addition, in many circumstances it reduces transaction costs since if the parties to an exchange are generally trustworthy with respect to one another and have some interest in maintaining the relationship and/or their reputations as trustworthy actors they will behave in a reliable manner, making for more beneficial transactions.

Despite the generally recognized benefits of trust, Cook, Hardin, and Levi (2005) argue that while trust may generate order at the micro level it is typically ineffective as a source of macro-level social order. Information requirements are simply too great to know whom to trust in a large complex organization or community and the risks involved are often too substantial to leave to the vagaries of individual behavior. In this chapter I explore the conditions under which trust does operate to produce micro social order and the conditions under which we rely on institutional mechanisms instead to undergird and create the conditions for macro social order.

Type
Chapter
Information
Order on the Edge of Chaos
Social Psychology and the Problem of Social Order
, pp. 125 - 144
Publisher: Cambridge University Press
Print publication year: 2015

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Arrow, Kenneth J. 1974. The Limits of Organization. New York: Norton.Google Scholar
Bacharach, Michael, and Gambetta, Diego. 2001. “Trust in Signs.” Pp. 146–84 in Trust in Society, edited by Cook, Karen S.. New York: Russell Sage Foundation.Google Scholar
Bjornskov, C. (2012). “How Does Social Trust Affect Economic Growth?Southern Economic Journal 78(4): 1346–68.CrossRefGoogle Scholar
Bradach, Jeffrey L., and Eccles, Robert G.. 1989. “Price, Authority and Trust: From Ideal Types to Plural Forms.Annual Review of Sociology 15: 97–118.CrossRefGoogle Scholar
Braithwaite, John. 1998. “Institutionalizing Distrust, Enculturating Trust.” In Trust and Governance, edited by Braithwaite, Valerie and Levi, Margaret. New York: Russell Sage Foundation.Google Scholar
Brehm, John, and Gates, Scott. 1997. Working, Shirking and Sabotage: Bureaucratic Response to a Democratic Public.Ann Arbor: University of Michigan Press.CrossRefGoogle Scholar
Coleman, James S. 1988. “Social Capital in the Creation of Human Capital.American Journal of Sociology 94: 250–73.CrossRefGoogle Scholar
Coleman, James S. 1990 Foundations of Social Theory. Cambridge, MA. Harvard University Press.Google Scholar
Cook, Karen, and Hardin, Russell. 2001. “Norms of Cooperativeness and Networks of Trust.” Pp. 327–47 in Social Norms, edited by Hechter, Michael and Opp, Karl-Dieter. New York: Russell Sage Foundation.Google Scholar
Cook, Karen S., Hardin, Russell, and Levi, Margaret. 2005. Cooperation without Trust?New York City, New York: Russell Sage Foundation.Google Scholar
Cook, Karen S., Rice, Eric R. W., and Gerbasi, Alexandra. 2004. “The Emergence of Trust Networks Under Uncertainty: The Case of Transitional Economies.” In Building a Trustworthy State in Post-Socialist Transition, edited by Kornai, Janos and Rose-Ackerman, Susan. New York: Palgrave Macmillan.Google Scholar
Currall, Steven C., and Epstein, Marc J.. 2003. “The Fragility of Organizational Trust: Lessons from the Rise and Fall of Enron.Organizational Dynamics 32: 193–206.CrossRefGoogle Scholar
Dirks, Kurt, and Ferrin, Don. 2002. “Trust in Leadership: Meta-Analytic Findings and Implications for Research and Practice.Journal of Applied Psychology 87(4): 611–28.CrossRefGoogle ScholarPubMed
Dyer, Jeffrey H., and Chu, Wujin. 2003. “The Role of Trustworthiness in Reducing Transaction Costs and Improving Performance: Empirical Evidence from the United States, Japan, and Korea.Organization Science Special Issue: Trust in an Organizational Context 14: 57–68.Google Scholar
Ensminger, Jean. 2001. “Reputations, Trust, and the Principal Agent Problem.” Pp. 185–201 in Trust in Society, edited by Cook, Karen S.. New York: Russell Sage Foundation.Google Scholar
Frey, Bruno S. 1993. “Does Monitoring Increase Work Effort – the Rivalry with Trust and Loyalty.Economic Inquiry 31(4): 663–70.CrossRefGoogle Scholar
Fukuyama, Francis. 1995. Trust: The Social Virtues and the Creation of Prosperity.New York: Simon and Schuster, Free Press Paperbacks.Google Scholar
Granovetter, Mark. 1973. “The Strength of Weak Ties.American Journal of Sociology 78(6): 1360–80.CrossRefGoogle Scholar
Greif, Avner. 1989. “Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders.Journal of Economic History XLIX(4): 857–82.Google Scholar
Greif, Avner 1993. “Contract Enforceability and Economic Institutions in Early Trade: The Maghribi Traders’ Coalition.American Economic Review 83: 525–48.Google Scholar
Hardin, Russell. 1993. “The Street-Level Epistemology of Trust.Politics and Society 21(4): 505–29.CrossRefGoogle Scholar
Hardin, Russell 2002. Trust and Trustworthiness. New York: Russell Sage Foundation.Google Scholar
Hart, Keith. 1988. “Kinship, Contract, and Trust: The Economic Organization of Migrants in an African City Slum.” Pp. 176–93 in Trust: Making and Breaking Cooperative Relations, edited by Gambetta, Diego. New York: Basil Blackwell.Google Scholar
Knack, Stephen, and Zak, Paul. 2003. “Building Trust: Public Policy, Interpersonal Trust, and Economic Development.Supreme Court Economic Review 10.CrossRefGoogle Scholar
Kollock, Peter. 1999. “The Production of Trust in Online Markets.” Pp. 99–123 in Advances in Group Processes, edited by Lawler, Edward J.. Greenwich, CT: JAI Press.Google Scholar
Lawler, Edward J., Thye, Shane, and Yoon, Jeongkoo. 2008. “Social Exchange and Micro-Social Order.”American Sociological Review 73: 519–42.CrossRefGoogle Scholar
Lepper, Mark R., Greene, D. and Nisbett, R.E.. 1973. “Undermining Children's Intrinsic Interest with Extrinsic Reward: A Test of the ‘Overjustification’ Hypothesis.Journal of Personality and Social Psychology 28: 129–37.CrossRefGoogle Scholar
Levi, Margaret. 1988. Of Rule and Revenue. Berkeley: University of California Press.Google Scholar
Levi, Margaret 1997. Consent, Dissent, and Patriotism. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Levi, Margaret 1998. “A State of Trust.” In Trust and Governance, edited by Braithwaite, Valerie and Levi, Margaret. New York: Russell Sage Foundation.Google Scholar
Lin, Nan. 2001. Social Capital: A Theory of Social Structure and Action. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Lofland, Lynn 1995. “Social Interaction: Continuities and Complexities in the Study of Non-intimate Sociality.” Pp. 176–201 in Sociological Perspectives on Social Psychology edited by Cook, Karen S., Fine, Gary A., and House, James. Boston, MA: Allyn and Bacon.Google Scholar
Luhmann, Niklas. 1980. “Trust: A Mechanism for the Reduction of Social Complexity.” In Trust and Power, edited by Luhmann, Niklas. New York: Wiley.Google Scholar
McAllister, D.J. 1995. “Affect and Cognition-Based Trust as Foundations for Interpersonal Cooperation in Organizations.Academy of Management Journal 38: 24–59.Google Scholar
McMillan, John, and Woodruff, Christopher. 2000. “Private Order under Dysfunctional Public Order.Michigan Law Review 98(8): 2421–58.CrossRefGoogle Scholar
Malhotra, Deepak, and Murnighan, J. Keith. 2002. “The Effects of Contracts on Interpersonal Trust.Administrative Science Quarterly 47: 534–59.CrossRefGoogle Scholar
Mayer, R.C., Davis, J.H., and Schoorman, F.D.. 1995. “An Integrative Model of Organizational Trust.Academy of Management Review 20(3): 709–34.CrossRefGoogle Scholar
Misztal, Barbara A. 1996. Trust in Modern Societies: The Search for the Bases of Social Order. Cambridge, UK: Polity Press.Google Scholar
Mulder, Letitia B., Van Dijk, E., Cremer, D. De, and Wilke, H.A.M.. 2006. “Undermining Trust and Cooperation: The Paradox of Sanctioning Systems in Social Dilemmas.” Journal of Experimental Social Psychology 42: 147–62.CrossRefGoogle Scholar
Ostrom, Elinor. 1990. Governing the Commons: The Evolution of Institutions for Collective Action. New York: Cambridge University Press.CrossRefGoogle Scholar
Putnam, Robert. 1995. “Tuning In, Tuning Out: The Strange Disappearance of Social Capital in America.” PS: Political Science and Politics 28(4): 664–83.Google Scholar
Putnam, Robert 2000. Bowling Alone: The Collapse and Revival of American Community.New York: Simon and Schuster.CrossRefGoogle Scholar
Putnam, RobertRadaev, Vadim. 2004a. “Coping with Distrust in the Emerging Russian Markets.” In Distrust, edited by Hardin, Russell. New York: Russell Sage Foundation.Google Scholar
Radaev, Vadim 2004b. “How Trust Is Established in Economic Relationships When Institutions and Individuals Are Not Trustworthy: The Case of Russia.” In Building a Trustworthy State in Post-Socialist Transitions, edited by Kornai, Janos and Rose-Ackerman, Susan. New York: Palgrave Macmillan.Google Scholar
Rotter, Julian B. 1967. “A New Scale for the Measurement of Interpersonal Trust.Journal of Personality 35(4): 1–7.CrossRefGoogle ScholarPubMed
Rotter, Julian B. 1971. “Generalized Expectancies for Interpersonal Trust.American Psychologist 26(5): 443–50.CrossRefGoogle Scholar
Rotter, Julian B. 1980. “Interpersonal Trust, Trustworthiness, and Gullibility.American Psychologist 35(1): 1–7.CrossRefGoogle Scholar
Rousseau, Denise M., Sitkin, S. B., Burt, R.S., and Camerer, C.. 1998. “Not So Different After All: A Cross-Discipline View of Trust.Academy of Management Review 23: 393–404.CrossRefGoogle Scholar
Sitkin, Sim B., and Roth, N. L.. 1993. “Explaining the Limited Effectiveness of Legalistic ‘Remedies’ for Trust/Distrust.Organization Science. 4(3): 367–92.CrossRefGoogle Scholar
Tyler, Tom. 1990. Why People Obey the Law. New Haven, CT: Yale University Press.Google Scholar
Tyler, Tom 1998. “Trust and Democratic Government.” In Trust and Governance, edited by Braithwaite, Valerie and Levi, Margaret. New York: Russell Sage Foundation.Google Scholar
Uslaner, Eric. 2003. “Trust, Democracy, and Governance: Can Government Policies Influence Generalized Trust?” In Generating Social Capital: The Role of Voluntary Associations, Institutions and Government Policy, edited by Stolle, D.. New York: Palgrave Macmillan.Google Scholar
Yamagishi, Toshio. 2001. “Trust as a Form of Social Intelligence.” Pp. 121–74 in Trust in Society, edited by Cook, Karen S.. New York: Russell Sage Foundation.Google Scholar
Yamagishi, Cook, and Watabe, , 1998. “Uncertainty, Trust and Commitment Formation in the United States and Japan.American Journal of Sociology 104(1): 165–94.CrossRefGoogle Scholar
Yamagishi, Toshio, Matsuda, Masafumi, Yoshikai, Noriaki, Takahashi, Hiroyuki, and Usui, Yukihiro. 2003. “Solving Lemons Problem with Reputation: An Experimental Study of Online Trading.” In Working Paper, CEFOM/21, Hokkaido University. Sapporo, Japan.
Yamagishi, Toshio, and Yamagishi, Midori. 1994. “Trust and Commitment in the United States and Japan,” Motivation and Emotion 18(1994): 129–66.CrossRefGoogle Scholar
Yunus, Muhammad. 1998. “Alleviating Poverty through Technology.Science 16 October: 409–10.CrossRefGoogle Scholar
Yunus, Muhammad 1999. Banker to the Poor: Micro-Lending and the Battle against World Poverty. New York: Public Affairs.Google Scholar
Zak, Paul, and Knack, Stephen. 2001. “Trust and Growth.” Economic Journal III: 295–321.Google Scholar

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×