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The Costly Business of Trust

Author

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  • Mark Casson

    (Department of Economics, University of Reading)

  • Marina Della Giusta

    (Deparment of Economics, University of Reading)

Abstract

The paper provides a framework to analyses trust-based projects which can be used as a diagnostic tool to design more effective policy intervention, particularly addressing the problem of meeting users needs for which many microfinance scheme have come under criticism. the theory is developed on the basis of both secondary literature and direct empirical evidence from two micro-finance projects in Mexico. we illustrate how a system of trust is built, and derive general propositions regarding the specificity of trust, the role of trust brokers, and the policy of subsidising trust-building projects, that can be applied both to microfinance and other trust-based development projects. we aim, to provide a tool capable of identifying crucial actors in trust systems and the nature of the linkages between them, so that trust can be effectively operationalised and incorporated into policy design in order to improve projects' effectiveness and suitability to local conditions.

Suggested Citation

  • Mark Casson & Marina Della Giusta, 2004. "The Costly Business of Trust," Economics Discussion Papers em-dp2004-08, Department of Economics, University of Reading.
    • Handle: RePEc:rdg:emxxdp:em-dp2004-08
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    Cited by:

    1. repec:rdg:wpaper:em-dp2010-02 is not listed on IDEAS
    2. Marina Della Giusta, 2010. "Social Capital and Economic Development," Economics Discussion Papers em-dp2010-02, Department of Economics, University of Reading.
    3. Stuart, Guy, 2006. "Caste Embeddedness and Microfinance: Savings and Credit Cooperatives in Andhra Pradesh, India," Working Paper Series rwp06-037, Harvard University, John F. Kennedy School of Government.

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