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Trust: A Concept Too Many

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  • Guinnane, Timothy W.

Abstract

Research on "trust" now forms a prominent part of the research agenda in history and the social sciences. Although this research has generated useful insights, the idea of trust has been used so widely and loosely that it risks creating more confusion than clarity. This essay argues that to the extent that scholars have a clear idea of what trust actually means, the concept is, at least for economic questions, superfluous: the useful parts of the idea of trust are implicit in older notions of information and the ability to impose sanctions. I trust you in a transaction because of what I know about you, and because of what I can have done to you should you cheat me. This observation does not obviate what many scholars intend, which is to embed economic action within a framework that recognizes informal institutions and social ties. I illustrate the argument using three examples drawn from an area where trust has been seen as critical: credit for poor people.

Suggested Citation

  • Guinnane, Timothy W., 2005. "Trust: A Concept Too Many," Center Discussion Papers 28440, Yale University, Economic Growth Center.
  • Handle: RePEc:ags:yaleeg:28440
    DOI: 10.22004/ag.econ.28440
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    File URL: http://ageconsearch.umn.edu/record/28440/files/dp050907.pdf
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    References listed on IDEAS

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    Cited by:

    1. Christian Bjørnskov & Gert Svendsen, 2013. "Does social trust determine the size of the welfare state? Evidence using historical identification," Public Choice, Springer, vol. 157(1), pages 269-286, October.
    2. repec:spo:wpecon:info:hdl:2441/942 is not listed on IDEAS
    3. Guillaume Daudin, 2006. "Paying transaction costs," Sciences Po publications n°2006-14, Sciences Po.
    4. Alvin Etang Ndip & David Fielding & Stephen Knowles, 2007. "Survey Trust, Experimental Trust and ROSCA Membership in Rural Cameroon," Working Papers 0713, University of Otago, Department of Economics, revised Nov 2007.
    5. Marcus Noland, 2005. "Affinity and International Trade," Working Paper Series WP05-3, Peterson Institute for International Economics.
    6. Bjørnskov, Christian, 2006. "The Determinants of Trust," Ratio Working Papers 86, The Ratio Institute.
    7. Stephen Knowles, 2006. "Is Social Capital Part of the Institutions Continuum and is it a Deep Determinant of Development?," WIDER Working Paper Series RP2006-25, World Institute for Development Economic Research (UNU-WIDER).
    8. Christopher L. Colvin & Eoin McLaughlin, 2014. "Raiffeisenism abroad: why did German cooperative banking fail in Ireland but prosper in the Netherlands?," Economic History Review, Economic History Society, vol. 67(2), pages 492-516, May.
    9. Becchetti, Leonardo & Conzo, Pierluigi, 2011. "Enhancing capabilities through credit access: Creditworthiness as a signal of trustworthiness under asymmetric information," Journal of Public Economics, Elsevier, vol. 95(3), pages 265-278.
    10. Wahl, Fabian, 2012. "Why it matters what people think: Beliefs, legal origins and the deep roots of trust," FZID Discussion Papers 52-2012, University of Hohenheim, Center for Research on Innovation and Services (FZID).
    11. Ivana Catturani & Panu Kalmi & Maria Lucia Stefani, 2016. "Social Capital and Credit Cooperative Banks," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 45(2), pages 205-234, July.
    12. Fabien Eloire & Claire Lemercier & Veronica Aoki Santarosa, 2019. "Beyond the personal-anonymous divide," Post-Print hal-01358365, HAL.
    13. Heidi Deneweth & Oscar Gelderblom & Joost Jonker, 2014. "Microfinance And The Decline Of Poverty: Evidence From The Nineteenth-Century Netherlands," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 39(1), pages 79-110, March.
    14. Fabien Eloire & Claire Lemercier & Veronica Aoki Santarosa, 2016. "Beyond the personal-anonymous divide: Agency relations in powers of attorney in France, 18th–19th centuries," Working Papers hal-01358365, HAL.
    15. Ann Owen & Julio Videras, 2009. "Reconsidering social capital: a latent class approach," Empirical Economics, Springer, vol. 37(3), pages 555-582, December.
    16. Christian Bjørnskov & Kim Sønderskov, 2013. "Is Social Capital a Good Concept?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(3), pages 1225-1242, December.
    17. Goodell, John W., 2017. "Trust and Governance: The conditioning role of national culture," Finance Research Letters, Elsevier, vol. 23(C), pages 80-86.
    18. Fenske, James, 2010. "Institutions in African history and development: A review essay," MPRA Paper 23120, University Library of Munich, Germany.
    19. Ha Ta & Terry L. Esper & Kenneth Ford & Sebastian Garcia‐Dastuge, 2018. "Trustworthiness Change and Relationship Continuity after Contract Breach in Financial Supply Chains," Journal of Supply Chain Management, Institute for Supply Management, vol. 54(4), pages 42-61, October.
    20. Colvin, Christopher L., 2017. "Banking on a Religious Divide: Accounting for the Success of the Netherlands' Raiffeisen Cooperatives in the Crisis of the 1920s," The Journal of Economic History, Cambridge University Press, vol. 77(3), pages 866-919, September.
    21. Fabien Eloire & Claire Lemercier & Veronica Aoki Santarosa, 2019. "Beyond the personal–anonymous divide: agency relations in powers of attorney in France in the eighteenth and nineteenth centuries," Sciences Po publications info:hdl:2441/3v5ra0iula8, Sciences Po.

    More about this item

    Keywords

    Institutional and Behavioral Economics;

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • N2 - Economic History - - Financial Markets and Institutions

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