How Political Institutions Create and Destroy Social Capital:

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How Political Institutions Create and Destroy Social Capital:
An Institutional Theory of Generalized Trust
Bo Rothstein
Department of Political Science
Göteborg University
Box 711
SE 405 30 Göteborg
SWEDEN
[email protected]
&
Dietlind Stolle
Department of Political Science
McGill University
855 Sherbrooke St. West
Montréal, QC H3A 2T7
CANADA
[email protected]
Paper to be presented at Collegium Budapest, Project on Honesty and Trust:
Theory and Experience in the Light of Post-Socialist Experience
Workshop 2: Formal and Informal Cooperation, November 22-23, 2002
Introduction: The Theory of Social Capital
A new debate in social science evolves around the resource of social capital. While many
dimensions of this concept are far from new, scholars have been increasingly concerned with
presenting social capital as a key resource for societies that seems to oil the wheels of both
democratic politics as well as economic prosperity (Coleman 1990; La Porta et al. 1997;
Putnam 2002). In this expanding research agenda, social capital is believed to be an important
resource promoting several other societal and individual benefits, such as responsive and we
well-performing institutions, as well as individual health and personal happiness (Baum 1997;
Knack and Keefer 1997; Newton 1999b; Woolcock 1998; Woolcook 2001).
Social capital has been defined and measured as generalized trust, norms and reciprocity and
networks (Putnam 1993). We consider here generalized trust as the heart of social capital,
since it is an integral and probably irreplaceable part of any democratic political culture, as it
clearly indicates an inclusive and tolerant approach to the population at large. 1 We consider
these civic attitudes as important prerequisites for cooperative behavior and the successful
solution of collective action problems. As is well-known from standard non-cooperative
game-theory, it makes no sense to support solutions for the common good if you do not trust
most other agents to do the same. We would like to point out that we are in agreement with
Elinor Ostrom (and many others) that this is the most fundamental problem in every
organization and society (Ostrom 1998).
Generalized trust indicates the potential readiness of citizens to cooperate with each other and
the abstract preparedness to engage in civic endeavors with each other. Attitudes of
generalized trust extend beyond the boundaries of face-to-face interaction and incorporate
people who are not personally known. These attitudes of trust are generalized when they go
beyond specific personal settings in which the partner to be cooperated with is already known.
They even go beyond the boundaries of kinship and friendship, and the boundaries of
1
Networks might have the opposite effect, e.g., by strengthening or empowering non-democratic groups and
organizations.
2
acquaintance. In this sense, the scope of generalized trust should be distinguished from the
scope of trust toward people one personally knows.2
Why is generalized trust so important? Generalized trust reduces uncertainty about the future
and the need to continually make provisions for the possibility of opportunistic behavior
among actors. Trust increases the desire of people to take risks for productive social exchange
(Tyler 2001). It lubricates smooth, harmonious functioning of organizations and interactions
by eliminating friction and minimizing the need for bureaucratic structures that dictate the
behavior of people who do not trust each other (Limerick and Cunnington, 1993). More
specifically, in the political sphere, generalized trust allows citizen to join their forces in
social and political groups, and it enables them to come together in citizens’ initiatives more
easily. In the social sphere, generalized trust facilitates life in diverse societies, fosters acts of
tolerance, and acceptance of otherness. Life in diverse societies is easier, happier, and more
confident in the presence of generalized trust (Uslaner 2002).
Generalized trust has been shown to be associated with economic development and growth.
Fukuyama discusses how trust influences the scales of firms (Fukuyama 1995). Knack and
Keefer demonstrate how particularly generalized trust compared to other indicators of social
capital is an important predictor of economic growth (1997). Zak and Knack show that even
controlling for various institutional aspects that facilitate investment and growth, such as the
protection of property rights and contract enforceability, generalized trust is still an important
additional predictor of economic growth (Zak and Knack 2001). Generalized Trust has also
been shown to explain democratic stability and democracy (Inglehart 1999).
In the wealth of positive associations between trust and various desired social and political
outcomes, the sources of generalized trust often remain unexplored. If trust is such an
important societal resource, how can it be generated, maintained or even destroyed? In
particular, what are the institutional conditions under which social capital can grow or not?
The issue to which we like to draw attention here is that social capital and trust are believed to
2
This more immediate form of trust may be called private or personalized trust, which results from cooperation
experiences and repeated interaction with the immediate circle of cooperators, whether that be a family,
community, or fellow members of a voluntary association. See Yamagishi and Yamagishi (1994) on distinctions
between general trust and knowledge-based trust, or Uslaner (2002) on a similar distinction between strategic,
particularized and generalized trust. On overview of various types of trust can be found in Kramer 1999 and
Stolle forthcoming.
3
have all of these effects, and yet it is often not absolutely clear which way the causal arrow
goes. Does generalized trust lead to all of these outcomes? Or is it sometimes the practice of
democracy, or certain characteristics of democratic institutions, or economic development that
enables and facilitates the building of generalized trust. It is the most important task of
research on trust to filter out these causality issues. In fact, the question of why it is that
citizens in some countries, regions, cities or villages are able to join together, trust each other
and solve many (maybe even most of) their collective action problems while others cannot,
turns out to be one of the most interesting puzzles in the social capital debate. In the
remainder of this article we like to address this issue in more detail, and we will develop a
theory of the formation of generalized trust that is embedded in the structure of institutions. In
fact we argue that many of the effects that social capital has been shown to have on
institutions might be as much caused by the effects of institutional differences on social
capital.
This paper proceeds in six main sections. In the following first two we review current
approaches explaining the sources of generalized trust. In the third section we present how we
build on the results of the existing approaches and how we go beyond them. In the fourth
section we develop what we consider an essential element of any causal argument, the causal
mechanism of the institutional theory of generalized trust. Short of a full-fletched test of our
causal model, in the fifth section we continue to illustrate our causal relationship with crossnational and Swedish survey and other data. Finally, we bring our new insights together with
suggestions for future research in our last sixth section.
1) The Generation of Social Capital— The Society-Centered Model
The social capital literature is clearly divided on the question of the causes and origins of
social capital. On the one side are scholars who argue that variations in the amount and type
of social capital can be explained primarily by society-centered approaches (Banfield 1958;
Fukuyama 1999; Putnam 1993). In this account, the capacity of a society to produce social
capital among its citizens is determined by its long-term experience of social organization
anchored in historical and cultural experiences that can be traced back over centuries.
The society-centered accounts see the most important mechanism for the generation of social
capital as regular social interaction, preferably as membership in voluntary associations
4
though more informal types of social interactions have been included in later work. Following
the Tocquevillian tradition, formal and informal associations are seen as creators of social
capital because of their socialization effects on democratic and cooperative values and norms:
associations function as “learning schools for democracy.”3 However, this approach has
revealed three problems. The first issue is that voluntary associations do not stand up to the
role they were believed to play in social capital creation. The second issue has to do with the
theoretical difficulty in distinguishing various types of social interactions from each other.
The third concerns the problems involved in the search for causes or roots of social capital.
We briefly summarize these issues in turn.
In a number of studies that have been carried out in different democratic countries over the
last years, the effect of participation in many voluntary associations directed at benevolent
purposes on social trust and the willingness to cooperate outside of group-life has been
questioned. It is true that people who are “joiners” also trust other people more or generally
cooperate more, but this seems to be an effect of self-selection. People who—for some other
reason—score high on the social ability to cooperate with others and to trust others, join
voluntary associations disproportionally. The activity in such organizations does not add
much in these desired traits, but members become purely more trusting in their fellow
members and they cooperate more for group purposes only (Stolle 2001). Thus the evidence
that membership creates social capital that can be used in the wider society does simply not
hold (Claiborn and Martin 2000; Hooghe and Stolle 2003; Rothstein 2002; Stolle 2000;
Uslaner 2002).4 Other types of social interactions might do the job, yet a second problem
occurs.
The second issue is that even if we accepted the importance of social interactions as a premise
for the learning of cooperation and trust, not all of them serve a desirable purpose. The
problem is that we do not yet have a micro-theory of social capital that defines those aspects
of social interactions that are important for the creation of social capital. Returning to the
example of associations, many of them are in fact established to create distrust. As one
colleague from Sarajevo told it, their problem has been “too much” social capital. By this he
3
Associations have also been praised for their external effects in that they allow citizens to access and influence
government.
4
The evidence on the relationship between regional density and civic attitudes is also mixed at best, and does
not hold within Scandinavia, for example where association-rich regions are not necessarily those that are most
trusting (Lundåsen 2000; Milner and Ersson 2000; Stolle 2002).
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meant that too many people have been members of voluntary associations that contributed to
the hatred and that led to the civil war. The same could probably be said of Northern Ireland.
Alan Brinkley talks about parochial communities that do not reach out but instead manifest
and nurture an inward-looking and segregating culture (2001: TAP: Vol 7, Iss. 29). Sheri
Berman has argued that the Nazis in Weimar Germany used existing voluntary associations as
vehicles for their “Machtübername” in 1933. Far from such extreme examples, some
voluntary associations may use their power, for example as producer organizations, to extract
resources from society in a way that comes close to “black-mailing”, giving undue or
disproportional advantages to its members at the cost of the rest of society. Organized interests
have not always been known to act in a way that increases generalized trust in society. The
literature on neo-corporatism and on “rent-seeking” both emphasize this side of the effects of
interest organizations (Lewin 1992; Olson 1982).
The problem of good and bad associations is readily admitted in social capital research, and
new promising analyses distinguish between groups that have a varying degree of contacts
with people that are unlike oneself. This distinction has been labeled as bridging (contact with
many people who are dissimilar) and bonding (contact with people like oneself) social
interaction. Bridging interactions are believed to create more desirable outcomes (Putnam
2000). In a similar vein, Warren distinguishes between groups oriented toward status, group
identity and material goods, as well as those focused on inclusive social, public or identity
goods (2001). Both theoretical accounts are still up for empirical testing, however (though see
Stolle 2000; Zmerli 2002). Generally, the struggle to distinguish between the ‘good, the bad
and the ugly’ in the world of social interactions underlines the lack of theoretical parameters
that define a micro-theory of social capital. In sum, so far we know that the use of
membership in voluntary associations as a measurement of social capital should be handled
with caution; and that its use as a producer of social capital is misplaced.
The third problem has to do with lack of understanding of the actual sources of social capital.
At a closer inspection, it turns out that the theory as it stands is of a somewhat deterministic
nature. The research reveals that the level of social capital in a society is determined by very
long historical trajectories. The differences between the North and the South in Italy are
traced back to the 12th century; and current day differences within the United States are
6
explained by the fraction of its population that is of Scandinavian stock (Putnam 2000:p. 294).
The implications of this view have left many policy makers and policy-oriented social
scientists dissatisfied: if the amount of social capital in a society is historically determined by
various societal structures with roots far back in historical time, there are few present-day
policy options available to stimulate the development social capital. At most, governments,
and particularly oppressive regimes, can damage and destroy what social capital exists, as the
examples of the Norman Kingdom in Southern Italy and of several authoritarian and
totalitarian regimes in Southern and Eastern Europe indicate (cf Sztompka 1998), but they
might not be able to facilitate or foster the generation of social capital.
2. The Institution-Centered Approach
As a reaction to the society-centered and historically-determined approach, the institutioncentered accounts of social capital theory respond that for social capital to flourish, it needs to
be embedded in and linked to formal political and legal institutions (Berman 1997; Hall 1999;
Levi 1998; Rothstein and Kumlin 2001; Stolle 2002; Tarrow 1996) According to this group of
scholars, social capital does not exist independently of politics or government in the realm of
civil society.
Instead, government policies and political institutions create, channel and
influence the amount and type of social capital. The capacity of citizens to develop cooperative ties and establish social trust is in this account heavily influenced by (the effects of)
government institutions and policies. This point of view would imply that institutional
engineering might indeed be used to foster social capital, (however, authors differ on the time
horizon of this effect).
In comparison to the sociological or society-centered perspective, the institutional model fits
more squarely into the field of political science. During the last fifteen years, there has been
an enormous increase in the interest in institutional effects in the field of political science.
This “new institutionalism” has mainly focused on the importance of using institutions as
independent variables in various theoretical models. This is not the place to present an
overview of this field of research or of the many variants of institutional theory that have
come to exist (cf. Peters 1999).
The problem we see is that the “new institutionalism” and the social capital research agenda
so far have been mostly disconnected. In a recent textbook titled Institutional Theory in
7
Political Science, Guy Peters presents no less then six different “new institutionalisms” in
political science. What is interesting from our perspective is that he mentions social capital
only once in passing (Peters 1999). Moreover, he argues that these approaches are mutually
exclusive. Summarizing the research, he writes that “the concepts of ‘social capital’ and
‘civil society’ are really ways of saying that without the right set of social values structural
manipulation and constitution writing will produce little positive results” (p. 88). We take this
to be the general idea among scholars in the social capital approach, namely that historically
established cultural traits have precedence over institutions in explaining variation in social
capital. However, Peters also refers to the work on democratization by Alfred Stepan and Juan
Linz who emphasize the importance of building institutions for the promotion of value change
of citizens that help to stabilize fledgling democracies. Peters’ statement about this line of
reasoning is the following:
This approach argues, although perhaps not so boldly, that if effective institutions can be
constructed and managed then in time (and perhaps not very much time), the appropriate
values will also be created (Peters 1999, p. 88).
A similar argument as Stepan’s and Linz’ has been put forward by Ostrom, stressing the need
to find institutional arrangements that make it more likely for groups faced with “commonpool resource” problems to find solutions for sustainable development so as to avoid “tragedy
of the commons” situations. In practice, this means institutions that would foster agency
where agents act as responsible citizens rather than utility-maximizing rationalists (Ostrom
2000). In fact we can point to quite a number of “bold” works that connect civic values with
the study of political/social institutions.
We can distinguish two main types of institutional arguments in relation to the concept of
social capital: an attitudinal approach and an institutional-structural. In the attitudinal
approach, scholars examine the relationship between institutional/political trust and
generalized trust. For example, Hall indicates that political trust and generalized trust are
correlated in Britain (Hall, 1999). Kaase discusses the consistently positive but weak
correlation between the two types of trust in cross-national survey samples (Kaase, 1999: 14).
However, the interpretations of this correlation vary. Some social scientists, who recognize
the correlation between the two types of trust, see generalized trust mostly as a predictor of
political trust. For example, Lipset and Schneider claim that in the United States, what they
8
call the “personal characteristic of trust in others” might explain developments in public
confidence. “A general feeling of confidence in institutions seems to derive from a personal
outlook of optimism, satisfaction and trust” (1983: 120ff.). Newton and Norris elaborate this
causal flow when they find a strong correlation at the aggregate level in the analysis of the
World Value Surveys in seventeen trilateral democracies. They interpret their findings as
evidence that social capital “can help build effective social and political institutions, which
can help governments perform effectively, and this in turn encourages confidence in civic
institutions” (1999). This, of course, is the logic of Putnam’s argument, in which he shows
that regional governmental performance depends on levels of regional social capital. The
problem with all of these analyses is that the flow of causality is not clear, which has been
noted by a number of authors who explore this relationship in more depth. Brehm and Rahn,
for example, have tried to disentangle the causality between these two types of trust with a
statistical analysis of the General Social Surveys (GSS) data set and a model that allows for
reciprocal causation. They found that confidence in institutions has a larger effect on
interpersonal trust than the other way around, even though they see both types of trust
influencing each other (Brehm and Rahn, 1997: 1014ff.).
We see three main related problems with the attitudinal arguments of the relationship between
institutions and social capital. First, the fact that attitudes cause other attitudes is not very
illuminating. The main problem of the attitudinal approach is that attitudes that relate to
institutions are not connected to the actual institutional characteristics. This omission is partly
remedied by the institutional-structural approach (see below). Second, there are a variety of
forms of institutional trust that we can identify in the study of advanced industrialized
democracies, but it is often a problem that most of them are collapsed under one label. No
wonder, scholars find weak or no correlation between generalized trust and other forms of
institutional trust or confidence, because they focus on confidence in institutions that have
little or nothing to do with generalized trust. The third problem is that the causal mechanism
in both causal claims remains unclear. Given the Putnam logic from trust to institutional
performance to confidence in politicians, we do not know how trusting people create better
service performance and better local politicians who are responsive. Do more trusting citizens
contact governmental officials more frequently to pressure them into good performance? Or is
it that local politicians just reflect the culture of trust or distrust that prevails in their local
societies? How exactly can the trust or distrust of citizens and their ability to reciprocate
influence governmental performance and as a result stimulate their confidence in politicians?
9
The reverse logic is just as plausible. What we miss is a precise causal mechanism that
accounts for the causal logic.
The second institutional structural approach overcomes some of these omissions. This
approach generally centers on the role of the state as a source of social capital generation.
Sidney Tarrow, for example, argues that the “state plays a fundamental role in shaping civic
capacity” (Tarrow, 1996: 395). Scholars who follow an institutional-structural approach have
taken up this critique. The argument is made that governments can realize their capacity to
generate trust only if citizens consider the state itself to be trustworthy (Levi, 1998: 86).
States, for example, enable the establishment of contracts in that they provide information and
monitor legislation, and enforce rights and rules that sanction lawbreakers, protect minorities
and actively support the integration and participation of citizens (Levi, 1998: 85ff.). This
discussion is very insightful, as it specifies institutional characteristics such as the efficiency
and trustworthiness of state institutions as influential for social capital creation. Also certain
types of institutions such as those that deal with lawbreakers are emphasized. Yet what is still
missing here is a specification of how the causal mechanism between institutional
arrangements and trustworthy behavior works.5
In sum, our brief review of the existing approaches to the sources of social capital has
revealed a few points. For once, society-centered approaches are theoretically under-specified
and lack successful empirical testing. Institutional arguments often do not specify the “which
institutions” and the “how” questions in the creation of generalized trust. We would like to
specify a model here that a) indicates which political institutions that are the most important
for generating social capital and b) how to understand the causal mechanism between these
institutions and social trust. The first is that we need to have an idea about which political
institutions may be important for generating social capital. The reason is simple, the number
of political institutions in any political system, democratic or not, is huge. The way they can
be combined into different institutional systems is infinite (Rothstein 1996). We have to
specify if it is the electoral, or the judicial, or the military, or the administrative or any other
political institutions that may be specifically important for generating social capital. Here we
build on the insights of the institutional structural approach. Secondly, we adhere to the
5
Another problem is of course to explain why some countries have been able to construct trustworthy
government institutions while others have not. There are several ideographic descriptions of such processes, but
we still lack an adequate theory (Rothstein 2000).
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important principle of specifying the causal mechanisms in this process. By this we mean that
it is necessary to spell out how the operation of a certain political institution actually may
change the norms or the belief system for the individual about social trust. As Ronald
Inglehart has argued, “it seems likely that democratic institutions are conducive to
interpersonal social trust, as well as trust being conducive to democracy” (Inglehart 1999).
The difficulty in this discussion is, according to Inglehart, how to specify the causal
connection(s) between these variables at the individual level. We address both of these issues
in the following two sections.
3) The Role of Political Institutions—Which Ones?
As stated above, the problem often is that many forms of institutional trust and confidence are
collapsed under one label. For example, we are certainly aware of concepts such as trust in
politicians, trust in the functioning of democratic institutions, trust in people who run
democratic institutions, trust in various agencies that implement public policies, trust in the
overall democratic system, and trust in the procedures that make institutions work. Our point
here is that the literature has not distinguished between confidence in the institutions on the
representational side of the political system (parties, parliaments, cabinets) and confidence in
the institutions on the implementation side of the system. The latter type of institution has
especially been forgotten or neglected in the debate about social capital (see exceptions here
in Levi 1998). One should keep in mind that for their personal welfare, citizens are usually
much more dependent on the institutions that implement public policies than on the
institutions that are supposed to represent their interests or ideology. To be protected by the
police and the courts, to get health care and education for one’s children is for many seen as
of vital importance.
The theoretical reason for the difference in confidence that people place in these types of
political institutions is the following. On the representational side, one of the main roles for
political institutions is to be partisan. A political party that holds government power, or the
majority in a Parliament, is supposed to try to implement their ideology in a partisan way.
Thus, people that support the ideology of the ruling party or parties are likely to have
confidence in them, while people that oppose their ideology are likely to report a lack of
confidence. For example, a city government run by the party one supports can be seen as
one’s political agent. In such a case, one is likely to have confidence in the government – as
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long as one supports its policies and keeps its promises. But, of course, people who oppose
the ruling party are more likely to distrust or to show a lack of confidence in that very same
government, especially if the ruling party does what it has promised to do. However, it is less
plausible why this type of political trust and distrust that is of a very temporary nature and
connected to political leanings should influence one’s generalized trust in other people; there
is no plausible causal mechanism linking these two phenomena. This is why we usually find
a strong correlation between political leanings and political trust but a weak correlation
between confidence in these types of political institutions and social trust (for the original
argument see Citrin 1974 and also Newton 1999a; Newton and Norris 2000; Norén 2000).
We believe that the weak findings of causal relationships between generalized trust and
political trust are mostly due to this failure to distinguish between various kinds of institutions
and related institutional confidence.
Now we are interested here in a very different institutional influence. It is mostly connected to
the legal branches of the state, the police and to many government organizations responsible
for implementing public policies such as social and welfare policies. We argue that these
branches of government and state institutions need to be distinguished from the influence of
political offices and branches such as the legislative and executive for three main reasons. In a
nutshell, these institutions serve as very encompassing socialization influences on citizens;
they reveal messages about procedural fairness and they deal with important aspects of
citizens’ concerns, namely safety. We will examine these points in more detail.
First, these institutions are usually more permanent in character than the short-lived and
politically dependent political institutions, and therefore are able to exert important
socialization influences. The experiences and observations of these institutions seem more
present in the socialization influences than for example the more short-lived moments in
voluntary associations. Unlike politicians nowadays, these “street-level bureaucrats” of the
police, the legal system or other social institutions are the ones who get in direct contact with
citizens. Thus direct contact and every-day experiences influence citizens’ beliefs about how
society works.
Second, these permanent political institutions reveal messages about the principles and norms
of the prevailing political culture that mold and shape people’s beliefs and values. The issue
here is not so much whether these institutions speak for one’s interests, however, but more
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important for the citizen trust in them and resulting trust in other people is whether these
institutions represent the ideals of universalism, equality before the law, impartiality and a
reasonable degree of efficiency. The idea is that despite different political leanings in
government, people are able (or not) to trust that institutions responsible for the
implementation of public policies are run and guided by these principles. If we have reason to
believe that the government institutions responsible for implementing laws and policies
behave according to the principles of efficiency, fairness and impartiality, we may trust them
with our demands for protection from crime, and other essentially private goods which spills
over to generalized trust (on how this happens see section 4 below). Being fair and impartial
is very different from – in fact the opposite of – acting as an agent of someone or acting on
behalf of someone. In these cases, a government institution that simply acts in my interest as
my agent, no matter what, is one that I have bribed (or one that is run by my cousin). And if I
can bribe judges or civil servants in general, so can someone else, including my adversaries.
The principle of impartiality and fairness of administrative agencies is, above all, a very
strong principle against corruption, but it is also a principle working against the idea that
government institutions should act as agents for someone’s special interests. In sum, we argue
that the impartiality and fairness of street-level order institutions are important dimensions of
institutional trust and confidence that can be conceptually separated from conventional
political trust in politicians, parties, and “the government,” and is most influential for
generalized trust.
Third, compared to other political institutions, the police and legal institutions have a special
task, namely to detect and punish people who, in a game-theoretic parlance, use opportunistic
strategy (we would prefer the term treacherous behavior). The judicial system and the police
are in other words, in the business of protection and this is something that influences greatly
societal patterns of trust. We therefore want to emphasize here the role of the judicial
institutions and the police. In the following section we elaborate exactly how these institutions
influence generalized trust.
4. Institutions, corruption and social capital – the causal mechanism
When we try to connect institutional theory to social capital, we want to underline that we do
not want to “smuggle into the analysis” any form of the old structural-functionalism.
Democratic institutions do not create social trust because it is “necessary” for their
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reproduction. Instead, we argue for a methodological individualism which emphasizes that it
is necessary to account for the motives, intentions and beliefs that makes individuals act in a
certain way. Institutional explanations must be combined with an explanation of the social
mechanisms that induce individuals to act in accordance with the demands of the institutions
and therewith reproduce them (Hedström and Swedberg 1998; Rundqvist 1998). We want to
emphasize that by social mechanisms we do not mean the addition of just another
“intervening variables” in the explanation. Instead, it should be viewed as a theory about how
we understand why “one variable changes another” (Hage and Meeker 1988, p. 1). The idea of
concentrating the analysis on causal mechanisms is thus theoretical – to test an idea about the
reason behind how, at the individual level, a change in one variable results in a different type
of behavior by that individual. This is the “what makes it happen” question that goes beyond
establishing a statistical correlation between variables
(Sayer 1992, p. 104). If such
mechanisms at the individual level can be shown to exist in a similar, recurrent and frequent
way, they will have persistent effects on the institutional structure in which individuals
operate and therefore influences individuals’ behavior and attitudes.
One last debate needs to be addressed before we can develop our causal mechanism for the
link between social capital theory and institutional analysis. How would corrupt and unfair
practices in the administrative machinery of the state influence people’s relation to and trust
in each other? The link between corruption and social capital is by no means obvious; there
are two possible answers to this issue. The first would be the assumption that in societies
where people cannot trust e.g., the police or the judicial system, they would substitute this
lack of trust by increasing their social networking and their trust in each other. The other
argument is reverse. A dysfunctioning, corrupt, biased and unfair administrative system does
not allow any kind of trust to rise, and particularly prevents the development of trust between
people. We examine both arguments in turn.
In line with the first reasoning, the logic is that facing a non-functioning state apparatus
society gets together to overcome the problems of the state. In other words, people would
compensate their lack of trust in political institutions by increasing their connectedness to
other people whom they can trust. In a way, society is “forced” to cooperate in order to fill the
gaps of and circumvent the inefficient, biased or disorganized state. In this vein, Michael
Woolcook writes that “rampant corruption, frustrating bureaucratic delays, surpressed civil
liberties, failure to safeguard property rights and uphold the rule of law, forces communities
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back on themselves, demanding that they supply privately and informally what should be
delivered publicly and formally”
(Woolcook 2001, p. 16).
Similar views have been
expressed about the state of civil society in the analysis of authoritarian and totalitarian states.
It has been shown that people under communism have created cooperative networks in order
to alleviate the lack of opportunities and material support provided by their government
(Sztompka 1996).
One of the leading scholars of corruption makes a related argument about the positive
correlation between corruption and social capital. Della Porta’s claim is that in order to make
corrupt exchanges, one has to trust the others who are involved in corruption. Albeit “bad”
social capital, the idea is that corruption creates strong norms of reciprocity and trust between
those who are involved in corruption.
In all illegal system of exchange, a high degree of trust and reciprocity is necessary
among participants, so the internalization of some rules of the game is therefore
necessary. A good reputation for respecting the terms of the illegal exchange, which
participants often call ‘honesty’, is valued by the actors involved. (della Porta 2000, p.
223).
What has been acknowledged in these debates is that these types of ad-hoc co-operations and
niches of social interactions are not of a generalized character. Surely trust can thrive in such
particularized communities, but this type of trust cannot reach out to include various groups of
the population. The high degree of norm conformity that Della Porta depicts among those who
involve in corruption is plausible. But again, this is a specific type of trust that the “secret” of
corruption not be revealed to the outsider—it does not reflect generalized trust, which is the
aspect of social capital that interests us most. Moreover, people involved in corruption need
not really trust one another, because they are in a situation of “mutual deterrence”. By this we
mean that both stand to lose if the corrupt exchange is revealed as giving bribes and taking
bribes are both criminal offences in most political systems. Deterrence is not exactly the same
as the trust that the other does not defect.
When it comes to attitudes of a generalized nature, such as generalized trust that is allencompassing in its nature (see Stolle, forthcoming), our argument is that things work the
other way around. A deteriorating biased corrupt administrative system in general goes hand
in hand with low levels of social capital, particularly when measured as generalized trust. The
institutional theory of trust that we propose builds on Levi’s insight that an individual’s
15
perceptions of fair, just and effective political institutions and the fact that most fellowcitizens have similar beliefs, influences the individual’s generalized trust (cf.Rothstein 2002).
Government institutions generate social trust only if citizens consider the political institutions
to be trustworthy. In this respect it is important, according to Levi, that states enable the
establishment of contracts in that they provide information and monitor laws; enforce rights
and rules that sanction lawbreakers, and protect minorities (Levi 1998, p. 85ff).
The argument runs as follows. Institutions of law and order have one particularly important
task: to detect and punish people who are “traitors”, that is, those who break contracts, steal,
murder and do other such non-cooperative things and therefore should not be trusted. Thus, if
citizens think that these institutions do what they are supposed to do in a fair and effective
manner then they also have reason to believe that the chance of people getting away with such
treacherous behavior is small. If so, citizens believe that people have very good reason to
refrain from acting in a treacherous manner, and they will therefore believe that “most people
can be trusted”. However, we want to emphasize here that it is not just the efficiency alone
with which treacherous behavior is punished, but the efficiency paired with the fairness of
these institutions that matters for generalized trust.6 In sum, if citizens can trust the
institutional effectiveness and fairness of the judicial system and the police, then one’s
generalized trust in others can be facilitated.
Let us illustrate the logic with a few examples. If someone has done harm to you and you
want justice to be done, you have three options. One is personal vengeance, which may lead
to endless vendettas whose outcomes are uncertain. Secondly, if existent, you can go to your
local mafia Don and ask him for a favor (knowing that someday he will come back and ask
you for a favor in return). And third, you can go to the police and courts. The last option,
however, only makes sense if you can trust they will be fair, impartial and efficient. If there is
“common knowledge” that they are unfair, take bribes and are inefficient, there is no point in
approaching these government institutions. In this case, the lack of trust in such institutions,
the messages about bribery and corruption, as well as the resulting feelings of a lack of safety
will influence one’s generalized trust in other people as well.
6
Efficiency of law- and order institutions alone can lead to feelings of relative safety or protection from arbitrary
crime committed by other fellow-citizens, as the low crime rates in former communist countries of Eastern
Europe indicate, however, they cannot create generalized trust because of their lack of fairness and impartiality.
16
More casually, here is a “true story” that helps to illustrate our argument. Lonely Planet is one
of the worlds largest companies in the guide-book industry. This is how the Police is
described in its latest guide to the Yucatan peninsula in Mexico. “Be advised that the federal
police have been implicated in rapes and murders… so don’t turn to them for help if you have
been assaulted. Obviously, if you survive an attack and go to the police, only to recognize an
officer as one of your assailants, he won’t be likely give you the chance to identify him in a
court of law”. The point we want to make is that in a society where such a perception of
public officials is common, people will also trust other people in general to a much lower
extent. If public officials, who are supposed to provide citizens with protection, cannot be
trusted then what are the grounds for you to trust people in general? Even visitors from
countries where the population is known to have unusually high levels of trust in other people,
will quickly change their mind about how wise it is to trust other people, let alone the police.
In addition, they will of course also feel vulnerable and unprotected, which makes them fear
strangers even more. No wonder that the wonderful beaches at the Yucatan peninsula to an
astonishing degree are being occupied by “all inclusive resorts”, which is the name for “gated
communities” in the tourist industry. Of course, this delivers just a very crude measurement
of police corruption and fairness in Latin America, however, other statistics confirm the
“story” as we’ll show below.
There is also a positive twist to our argument, of course. There is ample evidence that the
citizens’ evaluation of the performance of the different types of government institutions with
which they interact influences their confidence in them (Kumlin 2002). Moreover, it can be
demonstrated that the contact with more universal types of welfare institutions—as opposed
to selective and means-tested (and therefore biased) institutions—is positively related to
generalized trust (Rothstein and Stolle 2002). We like to expand the argument here to include
the impartial and unbiased character of various types of institutions with which the citizens
get in contact, including the courts and police, and their positive facilitative influence on
generalized trust
The causal mechanisms that we are searching for are admittedly very difficult to observe
empirically because they concern how belief systems are generated – or in more ordinary
language: “what goes on in people’s minds.” What actually determines their view of that sort
of game they are playing? We would like to specify the deductive logic as composed of the
following four causal mechanisms.
17
[Figure 1 about here]
As indicated in Figure 1, we argue that the absence or presence of corruption, the level of
arbitrariness and bias of public officials in the police and court systems has two important
consequences that become influential on citizens in several ways: they influence the trust in
the institutional effectiveness and trust in institutional fairness. Surely, corruption does not go
hand in hand with trust in governmental institutions. It is obvious that the reason for offering
bribes is that one does not trust public officials to do what they otherwise are supposed to do.
We develop four different parts of this causal mechanism between institutional characteristics
and generalized trust. Institutional efficiency and fairness:
1. influence the individual agent’s perception of his/her safety and security. The absence or
presence of fear of others is obviously influential for the belief that “most other people”
ought/ or ought not to be trusted.
2. determine the individual agent’s inference from those who are given the responsibility to
guard the public interest to most people. For example, if those in position of responsibility
cannot be trusted, then “most other people” can surely not be trusted.
3. shape the observance of the behavior of fellow-citizens, as institutional fairness sets the
tone. The message of corrupt systems is, for example, that in order to get what one needs in
life, one has to be engaged in various forms corruption. Hence the individual agent will
witness the use of corruption amongst fellow-citizens, and will him or herself have to engage
in corrupt practices in order to get what she deems necessary in life. However, there cannot be
any generalized trust in those who just take advantage of others and the system.
4. cause experiences with these institutions when in direct contact with them. Corrupt and
unfair institutions, for example, might lead to experiences of discrimination and injustice,
which negatively influences generalized trust.
Our argument is certainly not that all forms of “generalized trust” are caused by experiences
with and trust in the impartiality and honesty of certain government institutions. There are
other important sources that are creating such social capital, for example the early childhood
experiences of trust relationships in one’s immediate family (Uslaner 2002). However, also
here we like to suggest that early childhood influences on trust might be parental experiences
with street-level order institutions as we presented it above. Our model helps to identify some
of the important dimensions of state institutions that are closely related to a significant aspect
18
of social capital, generalized trust, and we thus present an institutional theory of generalized
trust. Again, we consider these institutions as important influences on citizens’ views of other
people, because they 1) are permanent institutions that offer direct contact with street-level
bureaucrats in every-day settings, 2) exhibit important norms of society such as impartiality
and fairness, and 3) they deal with a valuable public good, personal safety.
5. Empirical Illustrations
Since there is no ideal data set to our knowledge in which we can test various aspects of our
argument and suggested causal mechanism, the section with empirical illustrations of the
causal mechanism and our broader argument proceeds in three parts. First, we explore
whether our general argument about varieties of institutional confidence and trust holds, and
whether certain types of institutions such as the legal system, the police and social welfare
institutions play a more important role for generalized trust than the clearly political
institutions. We will test our propositions at the macro level in a cross-national sample
provided by the World Values Survey, and at the micro-level in a Swedish national sample. In
the second part, we go a step further and move beyond this attitudinal approach to include
measurements of the institutions themselves. This test requires the merging of aggregate
statistical institutional measurements with aggregate public opinion data. Is it true that aspects
of institutional fairness, wide-spread corruption and institutional efficiency of the courts and
police are influential for generalized trust? Does the relationship hold in a multivariate model?
Third, since our argument and causal mechanism captures how institutions might influence
individuals, we need to test the relationship also at the micro-level. Are individuals who have
experienced corruption, unfair institutions, discrimination or the lack of protection also less
trusting?
Varieties of Institutional Trust—A General Exploration
We turn to the indicators of political confidence. Our previous discussion demonstrated that
there are at least two dimensions along which citizens judge political institutions: they expect
representatives of political, legal and social institutions to function as their agents; and at the
same time citizens expect neutrality, fairness and impartiality. Moreover, citizens expect more
agency and potential political bias from political institutions with elected offices, whereas, we
argue, citizens expect impartiality and an unbiased approach from order institutions. Our
claim is, of course, that the lack of impartiality of order institutions disturbs trust
developments within the population. Let us first have a look at the distinctions citizens draw
19
between various institutions. Is it really true that citizens distinguish their confidence in
various types of institutions?
[Table 1 about here]
We subject the aggregated third wave of the World Values Survey to a factor analysis.7 As the
results in Table 1 indicate, citizens from 50 countries make distinctions between types of
confidence in institutions in a list of nine.8 The factor analysis (principal component, with
varimax rotation) reveals that three different dimensions of institutions emerge. 9 Indeed most
political institutions with elected offices fall under the first dimension, such as confidence for
parliaments, governments, and political parties. A second dimension taps confidence in
institutions that are mostly control institutions that check power of institutions with elected
offices, and include the media and— a bit to our surprise—also the civil service. However,
confidence in civil service also loads on the other two dimensions, which clearly taps those
institutions that are expected to do their work in an unbiased and impartial way; they include
legal institutions, the police, and the army (see Table 1). In other words, citizens make
distinctions between institutions; they do not view all institutions in a similar way. It is clear
that the third dimension reflects the group of order institutions that are expected to function
with less political bias and in an impartial manner, even though the actual experiences in
authoritarian systems, for example, are sometimes very different.
[Table 2 about here]
A similar result emerges when using the SOM-SURVEYS from 1996 to 2000 which have
been conducted by the SOM (Society – Opinion – Media) institute at Göteborg University,
Sweden.10 This factor analysis is conducted with confidence values at the individual level, and
includes confidence in social welfare institutions. As the results in Table 2 indicate, citizens in
7
The third wave WVS contains the most complete battery of questions about confidence in a variety of
institutions.
8
The inclusion of labor unions, businesses and companies as well as churches does not change the extracted
factors. However, for the argument we like to make, the inclusion of the presented institutions is sufficient.
9
The results are confirmed in the WVS data set with individual cases.
10
The institute is managed jointly by the Departments of Political Science, Public Administration and
Journalism/Masscommunication at Göteborg University. For this project, questions about trust have been added
to the five surveys 1996 to 2000 with funding from the Swedish Council for Research in the Humanities and
Social Sciences. For information about sampling, response rates, etc. please visit www.som.gu.se or contact
[email protected]
20
Sweden make similar distinctions between different types of confidence in institutions in a list
of ten. The factor analysis (principal component, with varimax rotation) reveals that three
different dimensions of institutions emerge. Again, most political institutions with elected
offices fall under the first dimension, such as confidence in parliaments, regional
governments, and local governments. The second dimension here reflects the group of
impartial institutions that are expected to function with less political bias and in an impartial
manner, they include the public health system, the public school system, the police, legal
institutions, and defense. The third dimension here taps confidence in institutions that are
mostly control institutions that check power of institutions with elected offices, and includes
the media. This result is a nice confirmation of the WVS results at the individual level, and
this test revealed the same factors even with the inclusion of confidence in other public
institutions, such as institutions of the welfare state (see more about how our argument relates
to the structure of the welfare state in Rothstein and Stolle 2002). The question now is
whether these different types of institutional confidence also reveal differences in their
relationship to generalized trust. Furthermore, we will go beyond the attitudinal approach to
test whether the institutional characteristics of fairness, impartiality and corruption stand in
relationship with generalized trust in the section that follows this analysis.
Perceptions of Institutions and Generalized Trust—the Attitudinal Approach
Even more interesting in the light of our argument is the relationship between the three
dimensions of institutional confidence and generalized trust. In the large cross-national
sample, the correlation between confidence in political/ biased institutions, as well as between
confidence in power check institutions and generalized trust is negative and low. However, in
line with our expectations, we find a rather strong relationship between aggregate levels of
confidence in order institutions and generalized trust. The results support the claim that
societies in which the impartiality of the order institutions cannot be guaranteed, which is
expressed by lower citizens’ confidence in these types of institutions, also produce lower
generalized trust (and vice versa). See Table 3 and Figure 2. The multivariate analysis follows
below.
[Table 3 and Figure 2 about here]
In the Swedish data at the individual level, we find that the correlation between confidence in
political/ biased institutions, as well as between confidence in power check institutions and
generalized trust is lower at the individual level than the relationship between generalized
21
trust and trust in impartial institutions. However, all types of institutional confidence are
significantly related to generalized trust. Even though the distinctions are not as sharp at the
individual level, the evidence points to the fact that trust in order institutions is more
influential for generalized trust (see Table 4).
[Table 4 about here]
However, causal relationships cannot be just tested in a cross-sectional way. Surely the
development of our causal mechanism ensures a causal logic that underlies our empirical
analysis, yet if institutions are in any way responsible for social capital in the form of
generalized trust, then we ought to see a connection longitudinally as well. In other words, if
institutions become more bias or less impartial over time, we would expect a negative effect
on generalized trust. Similarly, if institutions become fair and impartial we would expect a
positive effect. There is not too much longitudinal data that contain these indicators, however,
we can have a very preliminary look at the World Values survey and at Swedish national data.
[Table 5 about here]
For this step of the analysis, we estimated positive and negative trends in trust in two
important order institutions, the police and legal institutions between the three waves of the
WVS.11 Not all of these distinctions between positive and negative trends in order
institutional trust mattered for trends in generalized trust. However, our finding is that
extreme loss of institutional trust in order institutions was also accompanied by loss in
generalized trust. Generally, in countries with a loss of 10 percent in order institutional trust in
this period had on average a 6 percent loss in generalized trust. A positive or stable trend did
not lead to significant positive changes in generalized trust (see Table 5). This results hints at
the idea that negative institutional trends will be noticed in generalized trust, whereas it is an
open question that positive trends have an equally positive effect.
[Figure 3 about here]
11
For the exact trend estimation, we subtracted trust in order institutions of previous waves from more recent
waves. Since not all countries were included in all three waves, three sets of subtractions occurred: OIT –wave3
minus OIT-wave1; OIT-wave2 minus OIT-wave1; OIT-wave3 minus OIT-wave2. OIT=Order Institutional trust.
22
A second look at longitudinal data is possible through the Swedish surveys that inquired about
different types of trust from the mid-1980’s. We need to add here that Sweden is of course
one of the countries that has consistently exhibited high levels of generalized trust and other
forms of social capital. Merging the Swedish national data with the first wave of the WVS
gives us a fairly long time series of various types of trust, including generalized trust. Figure 3
presents those types of trust for which we have the longest time series and makes various
points. First of all, the Figure indicates that like generalized trust specifically order
institutional forms of trust and trust in the welfare system are also fairly high and consistent,
which includes particularly trust in the public health care system, the police, in public schools
and to a certain degree trust in the defense system/army as well as trust in universities and
courts (not all results shown). Trust in political biased institutions is generally low such as
trust in the government and the parliament, in the Cabinet, political parties, the EU
parliament, and local government is in comparison much lower (not all results shown). Taking
the 2001 average for what we call the five implementation branches of political
institutions(health care, police, schools, courts, and army) we receive a score of +37. If we
take the average for the confidence in the political representation bodies (parties, Parliament,
Cabinet, Local Government and EU-Parliament), our average comes to -12. This is a
difference of almost 50 points on the opinion balance scale. Generalized trust falls like trust in
implementation institutions into this higher level. The second point is that there is much more
fluctuation in the political forms of trust, however, such as trust in government and trust in the
parliament, probably much depending on who is in power. Moreover, trust in biased and
political institutions is clearly diminishing, which is no secret in Swedish society. Given the
first and last measure on our time scale, trusts in parliament and the cabinet have fallen at
least 22 percentage points, and have like trust in the EU parliament and trust in local
government, etc. been much in the minus field of the scale. The same decline cannot be
observed for trust in order institutions and those that implement public policy. Given this very
rough longitudinal analysis, we can conclude that again, trust in order institutions and public
policy institutions is much more related to generalized trust than confidence in political types
of institutions.
We have now established that we can distinguish between various types of institutional trust,
and that cross-sectional and longitudinal methods of analysis revealed at least to a degree
generalized trust is more closely related to trust in order institutions and institutions that
implement public policy than the other types. It is now the task of the test of our causal
23
mechanism to explore which institutional experiences exactly relate to generalized trust. Our
causal mechanism entails that important components of confidence in order institutions are
aspects of institutional efficiency in terms or protection and safety as well as institutional
impartiality and fairness. Particularly, citizens’ feelings of safety and protection, citizens’
inference from elites’ and other citizens’ behavior, as well as their experiences with
discrimination contribute to the shaping of generalized trust. If this is correct, we should see
that citizens are less able to trust when experiencing wide-spread institutional corruption,
unreliable police and crime, arbitrariness and bias of courts, as well as discrimination by
police and courts. We will test some of these propositions at the macro and micro-levels
below.
Institutional Experiences and Generalized Trust—Macro Results
For this part of the analysis, we use perceptions of institutions and institutional characteristics
and their relationship with generalized trust. We utilize aggregate data from the three waves
of the World Value Survey, the International Crime Victim Survey (ICVS), 1989-1997,12 as
well as aggregate statistical indicators, such as the corruption index from Transparency
International. For various steps of the analysis, the number and selection of countries might
differ.
[Table 6 about here]
The International Crime Victim Survey includes a variety of interesting indicators regarding
people’s perception of security and safety, the experience of actual crime, the experience of
actual corruption, however, no indicators of social capital such as generalized trust. Therefore
we merge the data at the aggregate level and explore bivariate relationships. The syndrome
presented in Table 6 is fairly clear, our measures of crime experience in forms of heavy crime,
corruption or fraud as well as feelings of safety and protection are undoubtedly related to
institutional trust of order institutions. The inclusion of these institutional experiences allows
us to get closer to our causal mechanism as—contrary to several other analyses on
institutional trust— we are therefore able to disentangle much more how exactly institutional
distrust/trust is shaped. Moreover, all of these institutional experiences relate significantly to
generalized trust measured in the same time period but different sample. Our argument is that
the differences in institutional structures are responsible for the different experiences in crime
12
Note that the CVS samples mostly in larger cities of each country, a fact that needs to be taken into account in
future analyses.
24
or corruption and the variance in institutional trust, which in turn influence levels of
generalized trust.
Moreover, one important behavioral expression of institutional trust is the reporting of crime
(see Malone forthcoming). If citizens experience crime, but do not bother to report it to the
police or courts, for example, this means that citizens do not trust the police with the task of
protection and safety. The high correlations between reporting crime or corruption and
institutional trust (see table 6) indicate that the reporting to the police is not fashionable in
countries where institutional trust is low. This sets into motion our causal mechanism, either
citizens feel unprotected, and therefore distrusting in other fellow-citizens. Or citizens
experience institutional corruption, and infer that elites and other citizens are biased and out
for their own good, which also makes them distrusting in others. In countries where only up to
50% of those experiencing any kind of crime report to the police, about 23% have generalized
trust in others. In countries where the percentage is above 50% police report (and therefore
police trust), citizens trust others an average of 39% (difference significant at the p=.003
level). The relationship does not hold between the percentage of reporting to the police on
fraud and corruption and generalized trust. Perhaps because not many citizens report on
corruption and fraud; the lack of this relationship needs to be explored further.
In sum we showed that institutional experiences of safety/protection or the lack thereof, as
well as experiences with corruption are strongly linked with institutional trust/distrust, and in
turn with generalized trust. However, in order to fully gauge the causal relationship we need
to test this connection in a multivariate macro model, which will be the next step for future
analysis.
Micro Results
No causal test is complete before it is also performed at the micro level. Ideally we like to
undertake a longitudinal analysis in counties or communities, for example that experienced
some sort of corruption scandal. The purpose would be to follow how indicators of social
capita, and particularly of generalized trust changed under the influence of corruption or
institutional change. A similar quasi-experiment can be conducted during the time of
institutional reform as attempted in selected Latin American countries (Malone 2000,
forthcoming). As we do not have the data available at this point, we test the individual level
variable of trust in order institutions in a multivariate setting.
25
[Table 7 about here]
Table 7 shows two different models in which we test the micro-relationship between
institutional/corruption experiences and generalized trust. The models include various other
predictors that have been shown to be important for generalized trust, such as socio-economic
resources, attitudes, associational membership, and variables that depict our causal
mechanism. Many socio-economic resources, predominantly education, but also individual
associational membership, attitudes such as life satisfaction emerge as important factors for
trust. Associational local density does not facilitate generalized trust. Model 1 includes trust in
order institutions which—controlled for all these other variables—emerges as a very strong
predictor. We take this as a confirmation of our theoretical insights. We also included a
variable that measures whether the respondent is a Swedish citizen or not, and at the
aggregate level the percentage of immigrants per county. The thought here is that despite
many integration attempts from the side of the Swedish government, immigrants might
experience discrimination in the Swedish system. Alternatively, immigrants might come from
countries with biased institutions that lack impartiality. As a first confirmation, we find that
immigrants score significantly lower on generalized trust than Swedish citizens, but the effect
cannot be found at the aggregate level.
The second model shrinks the pooled 5-year pooled sample to a one-year sample alone,
because it includes indicators that have only been asked in one year. One indicator measures
whether the respondent thinks that corruption is widespread in Sweden. Second, a further
variable measures recent corruption scandals in Swedish communities (distinguishing those
communities as dummy variables). Finally, we included a variable that measures whether
civil rights are respected in Sweden—an indicator very much at the heart of our argument.
Someone who does not consider the Swedish order institutions to be impartial would not
answer this question in the positive. All of these predictors came out as significant for
generalized trust, but their power has to be re-analyzed in a larger sample. This means that the
perception that civil rights are respected in Sweden is positively related to trust, whereas the
view that corruption is wide-spread negatively influences generalized trust. Interestingly,
citizens who live in counties where people experienced a corruption scandal within the last
decade, also score lower on trust in this smaller sample, which hints at the fact that the
experience of corruption influences how people think of each other.
26
Finally, our yet strongest support for our argument is delivered by an analysis of corruption
and its effects in Latin America. Mitch Seligson found not only that the experience of
corruption significantly erodes the legitimacy of the political system, but in addition,
significantly reduces interpersonal trust (measured as generalized trust), see Seligson 2002:
428 ff.). The advantage of his data set, the Latin Barometers, is that citizens have been asked
both about the experience of corruption as well as various institutional and social trust
questions. The findings point exactly to what we would expect from the developed causal
mechanism in this paper.
6. Conclusion
We have developed here an institutional theory of generalized trust. Our argument is that the
structure of contemporary institutions is an important and overlooked factor that matters for
the generation of generalized trust. In particular, we develop a causal mechanism which
explains and specifies the causal flow from impartial, un-biased and un-corrupt, just
institutions responsible for the implementation of public policies to generalized trust. The
impartiality and efficiency of these institutions influences basically citizens’ institutional trust
and more specifically (1) how they experience feelings of safety and protection; (2) how
citizens make inferences from the system and public officials to other citizens, (3) how
citizens observe the behavior of fellow-citizens, and (4) how they experience discrimination
against themselves or close others.
In our empirical part we have shown that these causal mechanisms are at work. Citizens make
distinctions between various types of institutions, and trust in order and implementation
institutions is more important for generalized trust than other types of institutional confidence.
Citizens do make strong connections between the impartiality of institutions and generalized
trust at the micro and macro levels. Citizens develop different levels of trust dependent on
their institutional experiences. And finally, citizens, who have experienced discrimination are
significantly less trusting.
Most discussions about the sources of social capital have so far been located at the arena of
civil society. Moreover, there is no successful theory of social capital that links aspects of
civic life and trust at the micro and macro level. The theoretical discussion and findings in our
27
paper intend to situate the concept of social capital more squarely in the realm of public
institutions. More importantly, our institutional theory of generalized trust encompasses
macro and micro links which are supported by empirical evidence. Whereas the direct causal
arrow of the relationship cannot be proven at this point, our causal mechanism and developed
theoretical insights suggest that parts of generalized trust can be influenced by the institutions
in which it is embedded.
28
Figure 1
Structure of Every-Day Bureaucracies
Fairness and
Bias
Effectiveness
Determines the
effectiveness of state
institutions to punish
those who violate rules
and cooperation
Determines that institutions
function in impartial way (or
not)
Trust in institutional fairness
Trust in institutional effectiveness
Experiences of
safety/Insecurity
 fear of or safety
with others
Attitudinal
Extension to
everyone else
(Generalization)
Actual Behavioral
Influence on
Fellow-Citizens
(and themselves)
Actual
Experience of
discrimination or
fair treatment
(particularly for
minority
groups).
Generalized Trust in other people
29
Table 1
Confidence in Various Institutions
(WVS Third Wave, Number of countries=50)
Rotated Component Matrix(a)
Component
Confidence in Parliament
Confidence in Government
Confidence in Political Parties
Confidence in the Press
Confidence in TV
Confidence in the Civil Service
Confidence in the Police
Confidence in the Army
Confidence in Legal Institutions
Factor:
Factor:
Factor:
Political/
Power
Neutral
Biased
Checking and Order
Institutions Institutions Institutions
.919
.288
.902
.175
.110
.896
.285
.163
.163
.959
.184
.929
.480
.536
.428
.119
-.188
.870
.119
.106
.761
.477
.272
.717
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser
Normalization. a Rotation converged in 4 iterations.
Table: 2
Varieties of Institutional Trust in Sweden (SOM data)
Rotated Component Matrix
Political Trust
Trust in
(Institutions Impartial
with elected Institutions
Officials)
Trust in Government
.876
.161
Trust in the Parliament
.874
.204
Trust in the Local
.672
.254
Government
Trust in the Police
.198
.733
Trust in the Health System
.743
Trust in the Defense System
.159
.625
Trust in Schools
.130
.527
Trust in the Legal System
.353
.531
Trust in Newspapers
.145
Trust in TV
.153
Trust in
Control
Institutions
(Media)
.100
.191
.287
.156
.815
.833
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser
Normalization. a Rotation converged in 5 iterations
30
Figure 2
Table 3: Correlations Between Various Types of Institutional Confidence and
Generalized Trust (WVS)
Factor Political/Biased Institutions
Factor Power-Checking Institutions
Factor Neutral/Order Institutions
Pearson
Correlation
N
Pearson
Correlation
N
Pearson
Correlation
N
-.07
50
-.170
50
.534**
50
*p <.05; **p< 0.01 level (1-tailed).
31
Table 4: Correlations between Various Types of Institutional Confidence and
Generalized Trust (pooled SOM)
Political Trust
Generalized Trust
.170**
12629
Pearson Correlation
N
Trust in Impartial
Institutions
Trust in Control
Institutions (Media)
Pearson Correlation
.201**
N
12629
Pearson Correlation
.078**
N
12629
*p <.05; **p< 0.01 level (1-tailed).
Table 5: Trends in Institutional and Generalized Trust
Average
Generalized trust
trend in countries
with negative
institutional trend
(10% and over)
Average
Generalized trust
trend in all other
countries
-.06
N=6
.001
N=34
32
Figure 3
33
Table 6: Bivariate Results: Institutional Experiences and Trust
Percent
victimized
by heavy
crime
Percent
victimized
by
corruption
or fraud
Mean
feeling
safe after
dark
Correlation
with
-.506(**) -.794(**) -.738(**)
Institutional
Trust (Order
Institutions in
all three waves)
Significance
Level
.002
.000
.000
Number of
countries
30
26
26
Correlation
with
-.434(**) -.379(*)
-.387(*)
Generalized
trust
In 1995
Significance
Level
.006
.021
.019
Number of
countries
33
29
29
** Correlation is significant at the 0.01 level (1-tailed).
* Correlation is significant at the 0.05 level (1-tailed).
Percentage
of those
who
experienced
crime and
Report it to
the police
Percentage of
those
experiencing
corruption
and fraud and
reporting to
police
-.761(**)
.667(**)
.478(**)
.000
.000
.007
30
30
26
-.405(**)
.519(**)
-.032
.010
.001
.435
33
33
29
Mean
expecting
future
break-in
34
Table 7: Micro Regression results for the Swedish Data
Variables
Constant
Socio-Economic Resources
Education
Married
Unemployed
Average Income per county
(kommun)
Related Attitudes
Life Satisfaction
Left Right Placement
Model 1
Unstandardized
Coefficients
(Standard Errors)
5.65****
(.249)
Model 2
Unstandardized
Coefficients
(Standard Errors)
6.025****
(.783)
.136****
(.01)
.152***
(.047)
-.432****
(.094)
.0015**
(.001)
.057*
(.031)
0.06
(.150)
-.647**
(.305)
.0007
(.01)
.587****
(.035)
-.105****
(019)
.634****
(.113)
.078
(.058)
Associational Variables
Number of Associational
.974****
Involvement
(.121)
Participation in Study Circles per
0.0002
county (kommun)
(.000)
Variables that relate to our causal mechanism
Being a Swish Citizen or not
.316***
(.110)
Proportion of foreign citizens per
-0.011
county (kommun)
(.007)
Institutional Trust in Order
.605****
Institutions
(.026)
Corruption is widely spread
Counties with recent corruption
scandals
In Sweden Citizens’ Rights are
well respected
Adjusted R square
N
.124
11250
.973***
(.369)
.0008
(.001)
.511*
(.305)
-0.019
(.021)
.370****
(.084)
-.141****
(.028)
-1.306**
(.515)
.144****
(.028)
.173
1140
35
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