As of Dec 18
WORKING DRAFT ONLY
Practical Responses to the Paradoxes of Maintaining Trust:
Towards a System of Integrity
David P. Shugarman
Introduction: Does Trust Matter?
It is almost unthinkable to be living in a world without important elements of trust. We
assume we’ll have a bed to sleep in tonight, that the bed, the room, the structure we’re in
won’t disintegrate while we sleep; that we won’t be attacked while we sleep, that when
we wake up there won’t be padlocks on the door keeping us in; and that there will be
food available for breakfast Without thinking about it we trust construction workers,
designers of beds and buildings, electricians, the police, grocers, delivery services, in
other words, all kinds of people we don’t know, and may not see. We require others to
meet our needs, to influence our daily lives and we tacitly consent to their doing so and
expect them to. It is also true that many people across the globe can’t make a number of
these assumptions but still manage to get on.
In what follows the meanings of trust and their paradoxical nature are explored and
attention is especially directed to the fiduciary obligations of democratic representatives
and to some examples of the way those obligations can be encouraged and monitored.
Maintaining them is key to the workings of democracy. Fulfilling fiduciary obligations is
closely linked to principles and practices of accountability which in turn have much to do
with acting responsibly, appreciating the importance of publicity (or transparency) and
sustaining honest relationships among people within the rule of law. But first I want to
take a slight detour by reporting on what I think are some lessons to be learned as a result
of doubts about the existence and importance of trust in a reasonably well – functioning
democracy, one whose strengths and weaknesses I know most about.
In two recent random samples of Canadians a substantial number of those interviewed
expressed the view that their governments and political system generally are corrupt. A
Leger poll taken in April 2002 found that almost 70% of Canadians interviewed held that
both their federal and provincial political systems were corrupt. A follow-up survey by
another pollster indicated Canadians were evenly split - 45% on each side, the rest saying
they couldn’t say - on the question of whether the governing Liberal government was
corrupt. The difference in the poll results, taken within a month of each other, indicates,
at the very least, the difficulty of accurately assessing people’s attitudes on questions like
this and, assuming the polls were carried out scientifically, the fickleness of people when
it comes to assessing politics and politicians’ performances.
What is remarkable about these figures, whether we accept the high distrust level or the
moderate one, is that in various party preference polls taken around the same time more
people expressed support for that same governing party than its competitors.
Furthermore, in a just released comparative survey of political opinions by the PEW
Centre - “What the World Thinks in 2002” - a majority of Canadians indicated they are
relatively happy – “satisfied” was the operative term used in the questionnaire - with their
lives and their country. It is as if one were to say, “the people running the country can’t
be trusted, but I’m doing OK, the country’s OK and I’ll probably vote the devils back in.”
This seems to fly in the face of Immanuel Kant’s maxim (which, like all his “ought”
statements, he took to be both theoretically and practically sound) that “honesty is better
than any policy.” It appears to run counter to John Stuart Mill’s view that trustworthiness
is crucial “to civilization, virtue, [and] everything on which human happiness
…depends” (Mill, Utilitarianism, On Liberty… Government, 1910, 21). At first glance it
would appear that despite low levels of political trust life goes on flatteringly for
Canadians. A majority of them are leading comfortable lives. For the past several years
Canada has had one of the highest GNP percentage increases and job creation rates
among G-7 countries, despite North America stock market drops and a weakening
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American economy. How is this contentment in the absence of political trust to be
explained? The economistic answer is simple: it’s the economy stupid. Ergo, concerns
about public trust and integrity are academically precious but superfluous. According to
neo-liberal economic views that have been on the ascendancy over the past twenty five
years, if the marketplace is functioning there is no need to look elsewhere, save to reduce
the role of government which engenders waste and distrust anyway,
Let me try - no surprise coming from an ethicist with a political theory background provisionally and perhaps provocatively to suggest why the simple, reductionist answer is
a simplistic one. What is missing in the economistic response is any appreciation of an
array of political activities and institutions that are both supportive of and resistant to
business practices. In the supportive category I would include the state’s role as a
regulator of market activities, regulatory oversight that contributes significantly to
investor confidence and fair competition, which in turn contribute further to trust in the
market place. A state committed to deregulation and a laisser faire approach risks,
permits or invites fiascos like Enron and WorldCom.
In the latter category - what I have referred to as the area resistant to business practices are a number of principles and practices that, as ethical values, are foundational to
democracy. What comes to mind immediately is the rule governing possession of the
right to vote in the electoral process: one person, one vote. This is clearly at odds with
corporate decision-making principles, where voting power is directly related to how
many stocks one owns; it is also counter to capitalist beliefs that there is no limit to how
much of anything of value one should be able to possess. One of the main reasons
Canadians (and Americans) have expressed distrust in their politicians and worry about
corruption has to do with the perception that the de facto power of money trumps the
legal, formal equality principle so crucial to democracy. The worry and distrust are about
political leaders being too attentive to those who fund political parties, finance election
campaigns and might provide lucrative positions to politicians once they leave the
political scene. Here what needs emphasis is that the distrust isn’t about the value of the
equality principle. It is rather that that principle is being flouted. An example is
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Canadians’ support of their national health care system which has been confirmed again
and again by public surveys (and most recently in a national report, the Romanow Report,
commissioned by the Federal Government). Underlying all the criteria and principles of
health care, including universal accessibility and portability across provincial boundaries,
is the importance of equality, the notion that each Canadian is entitled to the highest
standards of health care the country can offer and that no person's health and life is worth
more attention on account of their social status or wealth than anyone else's. In short, the
distrust of political leaders indicated in recent opinion surveys hasn’t crossed over or led
to a distrust of publicly administered services or to a rejection of the key principle of
social equality.
Infrastructural Supports and a Democratic Political Culture
Let us return for a moment to a partial list of the items and activities that people largely
take for granted. My example again is Canada, but the implications I’m concerned to
draw out would apply to any functioning liberal democracy. Canadians have a court
system that functions, and a Charter of Rights which huge numbers of people believe
afford them protections; their fire-fighting and police services are effective, the national
health care system remains functional and accessible; there is a free press and a wide
variety of radio and television stations providing information, commentary and
entertainment; there are national and provincial parks; a good public school system
operates smoothly in all the provinces, homes are heated, petrol stations have plenty of
fuel and grocery stores can be counted on to have full shelves of things most people seem
able to afford. All these items and experiences provide factors of trust in everyday needs
being met. But what is involved here is not only about experiences. For in many cases the
trust referred to, especially with respect to the provision of public goods is based on
abstract assumptions. Most people, after all, have not experienced sitting in court rooms
or on jury trials or needing to assert their rights before a judge; most haven’t experienced
having to be rescued by the fire department or police. So there are certainly assumptions
and hopes connected to expectations. What is a shared understanding is the sense that
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there are private sector and public sector services that can be relied on when the need
arises.
This shared understanding about the various “deliverables” citizens can rely on in is
parallelled by a generalized, abstract understanding of the workings of democracy that is
foundational to citizenship and the expression of political trust. Part of this abstract
understanding has to do with the legitimacy of democracy. That legitimacy has much to
do with the selection process, the representativeness of those selected and their
accountability, People in democracies expect that their societies will be moved one way
or another by legitimate authorities –representatives who have been elected in fair and
regular elections for definite terms – who are responsive, responsible and replaceable and
who understand their role as trustees of the public’s interests. These representatives are,
therefore, duty-bound to meet the needs and collective preferences of a participative
citizenry in a procedurally open and fair manner.
Furthermore, the trust that citizens must have in the democratic process, in contrast to the
trustee-like obligations of elected representatives and public servants generally is not that
THE right or best decision is guaranteed through elections. It is, rather, that with respect
to both process and policy, there is a possibility for review and change, enabling “losers”
the chance to win next time. This openness to change – hope on the part of losers – is a
most reasonable way of working out disagreements and preferences, avoiding turning
debate and shouting matches into war. In contrast then, to ritualistic declarations by
losers on election night that the people are always right, they aren’t of course. But the
point is that they, as a majority or plurality, have the right to be wrong with respect to the
determination of policy alternatives and agenda setting, whereas no other person or group
does. And this acceptance of a wrong result, being outvoted and sidelined, even when
one is sure one is right, depends on a person’s (or the minority’s) trust that wrongs can be
corrected, that others can be brought around to a different appreciation of the correct path
the next time. Because, as well, one trusts that others will respect differences and not
obliterate the interests of losers. In the short run there are always winners and losers in
respect to election results, public policy preferences and developments. But there is a
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long term trust that is crucial - not unlike the trust investors are asked to have, that in the
long run the stock market will right itself and equities will be a good investment again.
In the long run everyone – excepting gangsters, thugs, psychopaths and ideological
zealots - is a winner insofar as institutions of governance are open and receptive to
alternatives, committed to the public interest, deliver goods and service on an equitable,
transparent basis and function in accord with a system of peaceful law and order that is
sustained principally by mutual respect and trust, rather than by arms or special favours.
Two Liberalisms in Tension
For at least a hundred years there have been two liberalisms struggling with one another
for dominance in liberal democratic polities. One owes much to Locke and has found
reinforcement in the 18th century Scottish Enlightenment, the mid-19th century
Manchester school of politicians in the United Kingdom and in the works of Ludwig Von
Mises, Joseph Schumpeter, Freidrich Von Hayek, Milton Friedman and Robert Nozick.
This branch of liberalism – economic liberalism - focuses on the liberalization of
individual, and corporate economic pursuits. Another branch of liberalism - political
liberalism - makes much more of an affirmative role for government and ties the political
significance of liberalism to further developments in democracy. It owes much to J.S.
Mill, and Leonard Hobhouse in Great Britain and to Presidents Franklin Delano
Roosevelt and John Kennedy and thinkers like John Dewey, John Rawls and Robert Dahl
in the United States.
For political liberals trust in democracy may have some parallels with confidence in the
market, but the democratic state must not be seen as synonymous with a stock exchange
or corporation. If it is seen as principally an arena or mechanism facilitating investment
or private pecuniary interests then it will be subject to competition for control based on
purchasing power and market transactions by people on the outside who want to be
inside. It thus risks being treated as both a candy factory and a dispensary of favours and
flavours by those on the inside. Dealing with government officials then, whether elected,
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appointed or in a career civil service, would become a matter of expecting returns on
one’s investment. The state government would be turned into a corporation.
For economic liberals too, corporate business principles are in tension with democratic
ones especially when the latter are pressed too far, too “idealistically” in government, or
too interferingly in the world of business. Decision making legitimacy for economic
liberals is based on ownership. The more shares you control the greater your number of
votes; the more of the market you control the more economic and social power you can
exert. And the economic liberal is sympathetic to the businessman’s expectations of
governmental responsiveness which are in many ways inimical to those of the average
voter: the more taxes you pay, the more important one’s company or investments are to
“improving” society through market activities, hiring workers and adding to the GNP,
then the more influence you should have on how public monies are spent. What you get
is a function of what you can afford, what you're willing to pay and/or what you can get
others to pay for what you have to offer, and whether you can get as much as you want
before others get theirs. Investment priorities and the distribution of economic and social
resources should be left to those who make business decisions and the intersection of
goods and services in market transactions. In operating and expecting services in these
two realms the citizen is faced with altering his criteria of trust. In the one it is based on
market acumen and financial success, in the other it is matter of the delivery of public
goods, promises and societal infrastructure.
Different Kinds of Trust
I want to briefly sketch three commonly used understandings of trust and then refer to
several paradoxes attached to such understandings. One understanding– the fiduciary
relationship - I think holds particular promise for the newly emerging democracies.
There are others that are connected to social and religious aspects of trust – charisma and
deference to elites – that I think they should avoid.
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1. The OED ( Online, Second Edition, 1989) describes trust as a synonym for
confidence, reliability and faith. You trust someone, something, some place when you
have confidence in that person, thing or place. In the case of persons,
i) that they care for you and about you, will be loyal to you, stand behind you, not
let you down;
ii) that their judgement can be relied on.
With respect to the first sense of trust, what is interesting is that it isn’t really questioned;
those trusted aren’t expected to have to prove their trustworthiness or be policed. When
an intimate’s trust is broken there is often little that can be done to re-establish it. Quite
the opposite is the case with political and economic trust relationships. They require more
elaborate institutional mechanisms to garner compliance and insure the relationship.
When the trust is broken there are then options available to transfer the trust, though that
assumes there is a larger trust relationship existing in the background which provides a
foundation for the one that involves a transfer and assumption of responsibilities.
Thomas Hobbes pointed out (and the OED has followed him) that trust, faith and
confidence amounted to the same thing and depended on an assumption of the honesty of
the person being trusted. Then he noted that people are also quite capable of trusting
people who don’t know what they are talking about.
“To have faith in, or trust to, or believe a man, signify the same thing; namely, an opinion
of the veracity of the man: but to believe what is said signifieth only an opinion of the
truth of the saying” (Ch VIII, Leviathan).
“From the same it proceedeth that men give different names to one and the same thing
from the difference of their own passions: as they that approve a private opinion call it
opinion; but they that mislike it, heresy: and yet heresy signifies no more than private
opinion; but has only a greater tincture of choler”.(Ch XI).
“ignorance of the signification of words, is want of understanding, disposeth men to take
on trust, not only the truth they know not, but also the errors; and which is more, the
nonsense of them they trust: for neither error nor nonsense can, without a perfect
understanding of words, be detected.”(Ch. XI).
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2. A second meaning of trust is close to respect, with connotations of reciprocal relations
as well as a notion of the duty to respect a person as an end in himself. Trust here is
closely connected to mutual respect:
i) in the sense that one believes that the other person(s) will act reasonably not
underhandedly or injuriously towards you because they assume your actions take
account of their interests;
ii) you expect others to conduct themselves in a manner similar to the way you
expect they expect you to behave towards them and others; but you do so
irrespectively of their actually doing so.
3. Trust is also understood as conveying a fiduciary relationship
i) whereby someone is acting on your behalf in your interest and NOT their own.
The third has grown out of the common law. In political thought it owes much to Locke.
What is especially interesting here is that fiduciary understandings apply in both private
and public sectors of activity.
Trust in the first sense often stems from intuitive and experiential relations: you trust
loved ones and close friends because of your experiences relating to them through
unwritten understandings and expectations.
The second sense refers to cultural norms which undergird social and political conduct
and institutions, so that the citizen is a beneficiary of other citizens’ willingness to share
or provide things through a government to him/herself. It also includes a version of
remarkably virtuous individuals.
In the third, trust is usually a matter of contract, whether express or tacit, involving the
equivalent of a professional-client relationship; there is an institutional/legal framework
maintaining the trust relationship. The trustee generally is licensed and regulated,
authorized to act as a trustee, in the first instance by a third party, in the second by the
client. However, an explicit contract is not required to constitute the relationship. “A
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fiduciary” in the words of an expert on U.S. trust law, “is a person who undertakes to act
in the interest of another person”. And “it is immaterial whether the undertaking is in the
form of a contract…[or] is gratuitous”.
(A.W. Scott “The Fiduciary Principle” (1949), 37 Cal. L. Rev. 539 at 540, as cited by
McCamus, (McCamus,1999, Meredith Lectures, 193).
There are two criteria of what traditionally has constituted a fiduciary relationship as it
has developed in the common law. The first criterion lists types of relationships in law or
social practice that have a fiduciary character: “principal and agent, solicitor and client,
executor and beneficiary, director and corporation, promoter and investor, partners, joint
venturers, guardian and ward and parent and child” (McCamus, 192).
The second criterion has to do with the nature or conditions that tell when fiduciary
obligations are involved. Fiduciaries have obligations of loyalty to the person whose
interests are to be defended. And this has meant generally that the fiduciaries are not to
personally profit from their position and ought not to be in a conflict of interest situation
where their own interests could conflict with the principals. What this enjoins is the
avoidance of self-dealing(McCamus,197-198).
Paradoxes of trust
Here it will be useful to briefly discuss some paradoxes of trust: things that seem to be at
odds but in fact go together.
Trust that needs no institutional network of oversight when assumed by intimates needs
such protections in the public arena.
While trust for some means loyalty through personal connections and special attention, it
also is understood by others (and sometimes by the same people) as the expectation, the
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predictability that those in uniforms or offices can be depended on to treat everyone
equally without discrimination or special compensation.
Persons who are trusted shouldn’t be asked to prove that they can be trusted, that their
trust is deserved; if they have to demonstrate their trustworthiness that indicates there is
some doubt as to whether they can be trusted. Often when such a person is subject to a
screening they no longer feel the same way about themselves or the people who subjected
them to questioning as they once did.
Ethical persons are persons who keep their promises…their words are their bonds. Do we
need incentives or threats to make sure people keep their word, and if that is so then what
does that do to the meaning of the ethical person? Do we need to assume people cannot
be trusted unless they see that it is in their interest not to betray a trust? If this is true it
may be worth it to betray a trust, especially if the rewards are great. Is the person in a
trust relationship then akin to the hypothetical criminal in the prisoner’s dilemma?
Trust seems to generally make sense when it is given for good reasons, when the person
deemed trustworthy is so because of that person’s reliability: one trusts or banks on
persons doing something because they have come through before or they at least give the
impression they are the kinds of people who will come through. But trust insofar as it is
used as a positive attribute of relationships cannot simply be equated with reliability or
predictability: alcoholics can be predicted to get drunk, cigarette smokers to get some
forms of lung or heart disease.
But trust in someone’s special capacities as a saviour, or in God isn’t really like trusting
based on reliability. One never really knows if God will come through or not. The not so
hypothetical danger involved in people looking to extricate themselves from corrupt
environments and lawlessness is the turn to
leaders with seemingly magical or godly capacities to right the world. Distrust in
authority is transformed into total trust in a commanding saviour with charisma.
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Building Trust Out of Mutual Distrust: The Contract Theorists
The contact theorists of the 17th and 18th centuries - Thomas Hobbes, John Locke and
Immanuel Kant - struggled with the need to provide scope for the entrepreneurial
activities of individuals on the one hand and the need for a system of constraints provided
by government to constrain the predatory inclinations of those same individuals on the
other. Each believed a society based on law and order – a civil society - was founded on
the need to move beyond a “natural” fractious state of mutual distrust What also marked
this period in Great Britain and many European states was a breakdown in the strength
and legitimacy of traditional governing authorities. This too considerably influenced the
thinking of these theorists. The connection between theorists concerned to provide space
for market activity amidst a political climate chilled by weakened states and pervasive
distrust of state authority and the situation of many post communist societies should be
clear.
Moving from communist authoritarianism to liberalization of social
structures and practices is not unlike the transition from monarchical, feudal
societies in the west in the seventeenth and eighteenth centuries to liberal
democratic capitalism in the twentieth. As Bruno Frey notes (“Direct
Democracy”, p.5),
In the Transition Economies the state may still be intervening all over,
but at the same time it is weak in the sense that it is not able to
guarantee the rule of the law. In particular, the property rights are not
well established and private contracts are enforced only at high cost,
or not at all. The state is weak because it is no longer dictatorial but
trust has not (yet) emerged. This holds both for the trust of citizens in
the state and the trust of political actors in the citizens. In the
perception of the people, and in reality, democracy is not (yet)
working well.
For Hobbes, distrust, which he spoke of as diffidence, was a major element in the natures
of possessive and competitive creatures.
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[I]n the nature of man, we find three principal causes of quarrel.
First, competition; secondly, diffidence; thirdly, glory.
The first maketh men invade for gain; the second, for safety; and the
third, for reputation. (Hobbes, Leviathan, Ch. XIII)
To get beyond the precariousness of pervasive invasiveness and the mutual
distrust associated with it men ( and Hobbes, like Locke and Kant, only
thought of political decision makers as men) would, if rationally selfinterested, agree to establish and obey a state governing authority with
irrevocably sweeping police powers that they could then trust to protect
themselves from each other.
Recognition of the precariousness of life pervaded by mutual distrust was a key factor
motivating people to seek out new social relations and a new order based on trust which
would still permit those naturally fractious individuals to pursue liberties without
cheating or killing each other. It should not be forgotten that under Hobbes’ all –powerful
sovereign individuals would still have substantial liberties: what would still be
“praetermitted” i.e., permitted, passed over, would be
The Liberty to buy, and sell, and otherwise contract with one another; to choose
their own abode, their own diet, their own trade of life, and institute their children
as they themselves think fit; & the like
(Hobbes, Leviathan, Ch.XX1).
For Hobbes, the sovereign, unlike anything before, is entrusted with power: a sovereign
“be it a monarch or an assembly… is obliged by the law of nature” to secure an end and
therefore, is trusted with power in order to procure that end which is “the safety of the
people; this is accomplished through a “general providence” and “the making and
executing of good laws”(Ch. XXX).
To Locke, the enjoyment of freedom in the state of nature “is very uncertain and
constantly exposed to the invasion of others; for all being kings as much as he, every man
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his equal, and the greater part no strict observers of equity and justice, the enjoyment of
the property he has in this state is very unsafe, very insecure. This makes him willing to
quit this condition which, however free is full of fears and continual dangers; and it is not
without reason that he
seeks out and is willing to join in society with others …
(Second Treatise, sec123 Emphasis added).
Locke’s very similar (to Hobbes’) creatures too recognized they couldn’t trust
themselves in the absence of a powerful government, but their distrust was not to be set
aside but rather carried over to the new government. People anywhere, if not checked,
and if they could get away with it, would be tempted to break rules and overreach.
Therefore, the right to remove a government that violated its fiduciary obligations was a
crucial safeguard for people instituting governments. It shouldn’t be forgotten that when
ambition and luxury…aided by flattery, [have] taught princes to have
distinct and separate interests from their people, men found it
necessary to examine more carefully the original and rights of
government, and to find out ways to restrain the exorbitances and
prevent the abuses of that power, which they having entrusted in
another's hands, only for their own good, they found was made use of
to hurt them
(Locke, Second Treatise, sec 111).
And Locke set out what those constraints needed to include:
These are the bounds which the trust that is put in them by the society
and the law of God and Nature have set to the legislative power of every
commonwealth, in all forms of government. First: They are to govern by
promulgated established laws, not to be varied in particular cases, but to have one
rule for rich and poor, for the favourite at Court, and the countryman at plough.
Secondly: These laws also ought to be designed for no other end ultimately but
the good of the people. Thirdly: They must not raise taxes on the property of the
people without the consent of the people given by themselves or their deputies.
And this properly concerns only such governments where the legislative is always
in being, or at least where the people have not reserved any part of the legislative
to deputies, to be from
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time to time chosen by themselves. Fourthly: Legislative neither must
nor can transfer the power of making laws to anybody else, or place it
anywhere but where the people have (Locke Second Treatise, sec142).
For Kant the moral politician could be brought to the fore and move his fellows to act
consistently and compassionately, but only in a context where the principles of right were
paramount, where, that is, rules and laws were effectively followed and enforced., and
that could happen only after people had removed themselves from a condition of mutual
distrust.
Kant’s paradox of political freedom, as Hans Reiss sums it up, is that man’s freedom is
only ensured when he submits to legally exercised coercion, a transgression of individual
freedom (Reiss, Intro to Kant, Political Writings, Second Edition, New York: Cambridge
U. Press,1991, p.26), This is paralleled in the treatment of trust by Hobbes, Locke and
Kant. The paradoxical relationship between trust, distrust, cooperation and coercion has
recently been nicely summarized by Susan Dimok who notes that trust is necessary to
secure a system of civil order and cooperation and “ a system of coercive rules is
necessary to secure trust…” (“Retributivism and Trust” p.45.)
Without an organized state and a proper government no person is secure, says Locke.
Each individual,
having ordinarily but his own single strength, hath not force
enough to defend himself from injuries or punish delinquents. To avoid these
inconveniencies which disorder men's properties in the state of Nature, men unite
into societies that they may have the united strength of the whole society to secure
and defend their properties, and may have standing rules to bound it by which
every one may know what is his. To this end it is that men give up all their natural
power to the society they enter into, and the community put the legislative power
into such hands as they think fit, with this trust, that they shall be governed by
declared laws, or else their peace, quiet, and property will still be at the same
uncertainty as it was in the state of Nature (Locke, Second Treatise, sec 136,
emphasis added).
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Locke is concerned to warn his readers that, while extricating themselves from
unproductive and precarious distrust, they not move from the fry pan into the fire. What
provides a check on the ambitions and manoeuverings of government is a fiduciary
understanding of the power of representatives: “the legislative being only a fiduciary
power to act for certain ends, there remains still in the people a supreme power to remove
or alter the legislative, when they find the legislative act contrary to the trust reposed in
them”(Locke, sec. 149). And the constraints of the fiduciary relationship apply to the
executive as much as they apply to the legislature.
Locke holds “The power of assembling and dismissing the legislative, placed in the
executive, gives not the executive a superiority over it, but is a fiduciary trust placed in
him for the safety of the people in a case where the
uncertainty and variableness of human affairs could not bear a steady fixed
rule (Locke, sec 156,emphasis added).
With respect to recommendations for strengthening ethical standards in public office Ian
Greene and I elsewhere have discussed the value of several different but complementary
routes to both check corruption and encourage ethical conduct in government (Greene
and Shugarman, 1997). I will briefly highlight some of our concluding suggestions since
they are apposite to the preceding discussion. We called for ethics commissioners – not to
be confused with special prosecutors - who are independent of government once
appointed and report to the legislature on breaches of codes of conduct and ethics
legislation. We argued for the usefulness of ethics legislation setting out rules governing
lobbying activity, and party and election funding that place limits on contributions as well
as spending and rigorous reporting rules; we supported statutory whistleblowing
protection; codes of ethics for political parties; and we argued that certain direct
democracy measures such as referenda and recall possibilities could encourage voter
awareness of issues between elections and more sensitivity to accountability requirements
on the part of leaders. We also noted the importance of educating the public about their
own civic responsibilities and the importance of conveying a foundational value such as
mutual respect and the democratic principles and processes that it informs. And we
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referred positively to John Dewey’s emphasis on the importance of an education that
contributes to the development of democratic character throughout society. One of the
sub themes of our book was the importance of finding ways of shoring up accountability
requirements and practices.
In this presentation I have been focusing on the importance of fiduciary relationships as
a crucial institutional and personal requirement of maintaining public trust. I now want to
look at two means for redressing abuses of trust and restoring accountability where
fiduciary obligations are not being met. The two recourses are whistleblowing and public
inquiries.
Confronting Abuses of Trust
Whistleblowing:
One response to ethical misconduct by people aware of transgressions, whether or not
they have official responsibility in the area, and who have attempted unsuccessfully to go
through internal channels to halt the abuse, is whistleblowing.
And for many the practical as well as theoretical paradox involved here has to do with the
sense that reporting/informing on one’s colleagues and/or friends or “washing dirty linen
in public” amounts to a betrayal of trust that one expects of one’s friends and
organization. It seems as if the maintenance of trust depends on breaking it. The loyalty
sensibility, combined with the institutional reflex that a few bad apples or some
questionable practices cannot be permitted to tarnish the reputation of the system or
organization; results in a defensive, “circle the wagons” posture and strategy of denial.
Public relations, personal reputation, how it will affect the market, the party, the
government, are all considerations that figure either overtly or more subtly in
constraining whistleblowing, treating it as disloyal, disruptive, personality –problem,
behaviour. Here two versions of loyalty confront each other; loyalty to friends, colleagues
and one’s institution versus loyalty to a more abstract notion of the public interest.
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For many people emerging out of the experiences of a police state the notion of a high
calling on ethical grounds that could be seen as snitching to authorities on one’s friends
and fellow-workers may be too much to ask. What some of the transitional societies may
want to consider is introducing a system somewhat like the UK 1999 Public Interest
Disclosure Act, which is an amendment to their Employee Rights Act. While still too
early to tell if it will be a useful measure to stop waste and misconduct the point of the act
is to protect the confidentiality of the whistleblower, make the process an acceptable one
using third party investigators and tribunals. The focus furthermore, is not on reporting
on friends to state authorities but rather on developing a complaints system against state
authorities as one way of protecting the rights of workers on the job, whether it is in the
public or private sectors.
Public Inquiries
In a representative democracy, coverage and questioning of public policy are most often
left to the adversarial give and take of opposing political parties in the legislature, and
investigative reporting by the press. It is also expected that political competition,
principles of ministerial responsibility and a watchdog media will either guard against or
expose ethical and administrative lapses. Studies by independent scholars, and research
institutes, pressure from individual, aggrieved citizens and social movements, and whistle
blowing by those inside corridors of power are additional means of exposing problems in
the maintenance of democratic procedures and fiduciary responsibilities. As a last resort,
we rely on the courts to provide answers to questions of unlawful practices by public
servants. However, between the courts and the other avenues of political participation and
pressure lie public inquiries.
Inquiries both contribute to the public policy environment and help fill in gaps in
governmental accountability by collecting and publicizing information that has generally
not been readily accessible to the public. A good example is provided by the inquiry that
examined the Westray Mine disaster in Nova Scotia, Canada. On May 9, 1992, just nine
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months after the mine opened, an underground explosion killed 26 miners. Shortly
thereafter the provincial government appointed Justice Peter Richard to conduct a public
inquiry into the tragedy. Principals of the Westray ownership group who lived outside
Nova Scotia refused to cooperate with the inquiry and went to court to exempt
themselves from having to answer subpoenas to testify. Nevertheless, over the course of
the inquiry into the explosion, testimony by miners, safety supervisors and safety experts
made it clear that standard safety practices and conditions were neglected.
What the inquiry also disclosed was that prior to start-up the mine's development was
strongly opposed by federal bureaucrats with expertise in the coal mining field as well as
other coal industry producers. Serious doubts were expressed about both the mine
company's viability and the need for a new mine, given the over supply of coal on the
market. But Westray was politically and financially supported by both the provincial and
federal Conservative governments as a result of efforts and commitments of key
ministers. The two governments provided in excess of 20 million dollars in subsidies to
the mine's owner as well as a loan guarantee that covered 85% of the company's $100
million bank loan. The federal public works minister who was one of the mine's chief
supporters was also the MP for the riding where the mine was constructed. In addition to
the company management's insufficient attention to mine safety, what the inquiry brought
to light were the lax supervision of occupational health and safety standards by provincial
inspectors, the indispensable support for the mine's opening that was provided by two
governments, the role that politics and political leaders played in the company's viability,
and the fact that a Nova Scotia government official removed records relating to the mine
so they could not be accessed through the province's freedom of information law because
they were thought to be "politically embarrassing.”
Two recent studies have provided persuasive arguments and evidence that public
inquiries in both Canada and the U.K. have been very useful tools for reminding
politicians and the public of the importance of the democratic obligations to provide an
accounting – answers - for what those entrusted with power do with it. (The studies are
by Rob Centa and Patrick Macklem on Canada and by A.W. Bradley for the U.K., they
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are both in A.S. Manson and David J. Mullan eds. Commissions of Inquiry – Praise or
Reappraise. Toronto: Irwin Law, 2003. They are reviewed there by the present author).
The moral and professional obligations of politicians to act in the interests of their
constituents and to be accountable to them, in addition to the legal requirements to do so,
are central. Ascribing blame, establishing personal responsibility for political decisions
has not traditionally in common law liberal democracies meant the same as alleging or
finding someone criminally liable or sued for breaking a contract or betraying a trust.
Inquiries that indicate a politician has lied or betrayed his or her trust by breaking
promises or violating procedural fairness have not been seen as venturing into areas
reserved for the courts. Nevertheless, as Dennis Thompson ( 1987, 82-87) has suggested
it may be a useful innovation to extend the penalties for abrogation of fiduciary
responsibilities and misconduct to go beyond public embarrassment and rejection by
voters. Abuses of trust for Thompson include (85) two broad categories of malpractice:
Failure to refrain or prevent criminal activities that one is aware of and that take place
under ones’ jurisdictional purview and official obstruction of the democratic process.
The penalty for political leaders authorizing abuse of trust and then compounding the
wrong by refusing to be accountable for what was done whether it involves lying about
the spending practices in one’s department, concealing information that ought to be in the
public domain or preventing citizens from being able to register complaints or queries
should perhaps be seen as analogous to penalties in the financial arena for concealing
information from investors or obstruction of justice in criminal investigations.
Deception and/or the refusal to disclose what the public has a right to know, even when it
is meant to serve the greater good - as dirty hands practitioners and theorists would have
it - breeds distrust and cynicism among large numbers of citizens. ( Rynard and
Shugarman, 2000). It also contributes to a contagion effect that erodes mutual respect and
community solidarity: if "he" or "she" or "they" fudge the truth, refuse to answer, why
can't "we" or "I"? In public life we ought to require those in positions of trust to maintain
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that trust, and if necessary to acknowledge when they have betrayed it or to be exposed
by others.
Trust is fickle, fragile, often attached to personalities, parties and groups irrationally,
emotionally, based on a leader’s charisma and magical feats; it is also there when there is
a perception of probity, and delivery of what is wanted, what has been promised, a sense
that those who have been entrusted to do x know what they are doing and can deliver x.
Conclusion
I have found it useful to draw on the wisdom of Hobbes, Locke and Kant when
addressing the need to bring peace, order and good government to bear on fractious
situations marked by distrust and lawlessness. Despite their many differences (which I
have largely passed over) they all start from the assumption that people’s natural
inclinations are such that they are not to be trusted. And they held that people who want
to live and prosper in fact recognize the dangers and despair of living with mutual
distrust. The contract theorists all were concerned to address the need for limitations on
unacceptable social conduct which only government could bring, and, in their own ways,
also emphasized the importance of integrity and impartiality in government. Though
none of them were decidedly democratic they seem to have seen the problems of
civilizing those bent on possessive and competitive lives and channelling the urge for
accumulation and dominion.
In that sense they speak to the issues of finding an accommodation between
the demands of democracy and those of the marketplace. They were also aware of the
importance of those in power keeping to the reasons for their being entrusted with
authority to begin with. Locke was as concerned about the dangers of governmental
abuse of trust as he was of individuals.’ His notion of fiduciary obligations on the part of
leaders was a way of circumscribing discretionary powers so they would be directed to
serve the expectations of citizenry.
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The contract theorists assumed that without a way of ensuring trust a society would
founder on lawlessness and civil war. That way of ensuring trust was through reliance on
a government providing law and order. The distrustful nature of human beings, they
assumed, would in the absence of government prevent people from enjoying economic
liberties and prospering. There is a paradox here: in order to institutionalise trusting
relationships among individuals they need to be assumed to be distrustful. Whether or not
they were right about our natures they seem to be speaking to the precariousness affecting
many of the post communist societies.
Developing democratic sensibilities and practices, a democratic political culture, involves
encouraging every member of society to see the role of government as a network of
institutions and people that exist to protect and promote their interests and be accountable
to them for public policy. It involves, as Kant emphasized, people committed to and
exhibiting respect for one another as persons. It also means impressing upon those in any
arena of authority the responsibilities of democratic office: the need to conduct
themselves in a manner that upholds their fiduciary obligations – their duties to maintain
the trust relationship between themselves and citizens they serve. Building such a culture
requires avoiding corruption and sustaining a comprehensive system of national integrity.
Many of the new democracies are burdened by histories of corruption and
mistrust. Their experiences and “fallible memories” as Michael Freeman
puts it in “Past Wrongs and Liberal Justice”( 201, Ethical theory and Moral
Practice 5 201-220) certainly weigh on people’s perceptions of their
various options and their investment in institutional and personal trust.
However, as Susan Rose-Ackerman has recently put it, citizens’ level of trust in
government and their expectations “are not just historically determined”; they are also
“responses to their everyday experience in dealing with government officials” and with
people’s perception of the state’s competence (and its reliability to deliver what is
promised or expected). In this regard “trust in government is related to actual
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performance”(Rose-Ackerman, “Public Participation in Hungary and Poland” Draft Nov
6, 2002, 1).
The difficulties of holding those who occupy positions of power, whether in
the public or private sector, to their fiduciary obligations and making them
accountable for their actions are serious challenges for post communist
societies. Neither of these practices was much in evidence during communist
rule. But these are also continuing problems for all western democracies
with market economies. Central East European countries may have the
benefits of borrowing what works from the west, avoiding what doesn’t and
charting their own courses to build trust and improve accountability.
Whether most post communist societies will be able to accomplish in a few
years what took western societies three hundred remains an open question.
In grappling with widespread disorder and mutual mistrust there is a very
real danger that pressures will build to return to a Hobbesian solution, but
this time on a model of Chile under Pinochet or the new China. A failure to
curtail terrorism adds to the probability of a non-communist Leviathan being
instituted.
If they are to be democratic the new transitional societies will have to find
ways of accommodating features of both economic liberalism and political
liberalism. There have long been tensions between these two branches of
liberalism. They continue to this day. It is mistake to think the question
comes down to an either/ or question of , trust the market or trust
democracy? For the foreseeable future it will have to be both, with close
attention paid to all the ways it is practicable to encourage and monitor the
fiduciary responsibilities of people with power in both sectors. As Hobbes,
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Locke and Kant went to some length to emphasize, what that means is that it
makes sense to assume that without stringent attention and accountability
measures the movers and shakers amongst us ought not to be trusted.
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