IDEAS home Printed from https://ideas.repec.org/p/ems/euriss/32268.html
   My bibliography  Save this paper

Transacting in the absence of trust : Uncertainty and network patterns in post-communism

Author

Listed:
  • Lehmbruch, B.

Abstract

The paper critically discusses the widespread literature focusing on informal post-communist “clans,” “networks,” or “fiefdoms.” Often self-described as determinedly empirical, the “clan” paradigm is crucially shaped by its origins in the analysis of East Asia, as well as by its use as an ideal-typical opposite of Western-style hands-off market contracting in the “markets and hierarchies” literature. To counter such deficiencies, the paper proposes an alternative argument. Although interactions are indeed personalized, interpersonal trust in many post-communist countries has failed to compensate for missing institutional safeguards. Rather, confronted with an environment of low trust and high uncertainty, actors have developed two main coping strategies: on the one hand vertical integration, on the other hand a hedging strategy of purposeful network redundancy. Even though trust and enforcement remain low, actors can minimize the consequences of default by maintaining multiple ties. The consequences of such organizational strategies are ambiguous. By compensating for defaults, network redundancy has cushioned the impact of economic crisis. At the same time, network redundancy has considerably raised overall transaction costs and may also play a role in impeding democratic consolidation.

Suggested Citation

  • Lehmbruch, B., 2012. "Transacting in the absence of trust : Uncertainty and network patterns in post-communism," ISS Working Papers - General Series 539, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  • Handle: RePEc:ems:euriss:32268
    as

    Download full text from publisher

    File URL: https://repub.eur.nl/pub/32268/wp539.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Schaffer, Mark E., 1998. "Do Firms in Transition Economies Have Soft Budget Constraints? A Reconsideration of Concepts and Evidence," Journal of Comparative Economics, Elsevier, vol. 26(1), pages 80-103, March.
    2. Martin Gargiulo & Mario Benassi, 2000. "Trapped in Your Own Net? Network Cohesion, Structural Holes, and the Adaptation of Social Capital," Organization Science, INFORMS, vol. 11(2), pages 183-196, April.
    3. Ellman,Michael, 2014. "Socialist Planning," Cambridge Books, Cambridge University Press, number 9781107074736.
    4. Geertz, Clifford, 1978. "The Bazaar Economy: Information and Search in Peasant Marketing," American Economic Review, American Economic Association, vol. 68(2), pages 28-32, May.
    5. Tom Schuller, 2007. "Reflections on the use of social capital," Review of Social Economy, Taylor & Francis Journals, vol. 65(1), pages 11-28.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Russia; networks; social capital; transition; trust;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ems:euriss:32268. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RePub). General contact details of provider: http://edirc.repec.org/data/issssnl.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.