Governing in a trust deficit

A key component in the exchange relationship between government and business in modern liberal democracies is the level of public trust that each institution enjoys. However, trust does not affect both equally. A fall in trust for government is likely to diminish a government's policy discretion much more than an equivalent fall in trust for business will diminish a business actor's capacity to make profit or shape public policy. In addition, there are good reasons to believe that government will tend to find it more difficult than business to maintain trust from its stakeholders, or to recover it when lost. In this paper, I insert a role for public trust dynamics into Lindblom's theory of the structural power of business. I then return to the debate in this journal on business power and the 2010 Australian mining tax I show that the existing accounts omit the role of trust in the conflict and as a result “discover†much more incompetence from the Australian government than really existed.