Trust and Identity in a Small, Post-Socialist, Post-Crisis Society
The principal focus in the substantial literature on impediments to economic development has been on the inadequacies of policies and governance. However, successful economic development requires effectiveness of markets and incentives for investme...
| Main Authors: | , , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/04/19327174/trust-identity-small-post-socialist-post-crisis-society http://hdl.handle.net/10986/17713 |
| Summary: | The principal focus in the substantial
literature on impediments to economic development has been
on the inadequacies of policies and governance. However,
successful economic development requires effectiveness of
markets and incentives for investment, which in turn require
trust. This paper reports on trust in a development context.
The paper uses trust experiments, a post-experiment survey,
and econometric analysis relating trust to identity and
other personal attributes in the setting of Montenegro, a
small, recently-independent, post-socialist, post-crisis
society. External validity was sought by providing
sufficient material reward to balance identity-related
expressive motives and by having two groups of subjects, one
usual university students and another group that, while also
students, was somewhat older and had had greater market or
commercial experience. The paper reviews cultural priors
that can be expected to affect trust and distinguishes
between generalized trust that can be socially beneficial
and particularized trust that can be disadvantageous for
development. The empirical results suggest that trust among
private individuals is not an impediment to development in
Montenegro. As a result, policy reform can improve economic
and social outcomes. However, the results redirect the focus
to issues of governance and political entrenchment as
potential explanations for impediments to development. |
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