- Trust fuels economic development and a lack of trust slows it.
- The current breakdown in trust reflects deep social challenges.
- Building trust requires making our institutions and ourselves worthy of trust.
Trust has been called the glue of healthy societies and the grease of economic productivity. Its presence often goes without notice. But its absence is hard to miss.
In the United States, the death of George Floyd at the hands of police, the “alternative facts,” and the QAnon conspiracies passed as truth in the recent election make clear that the incoming administration will need to rebuild trust in US government officials and institutions. And today, civil society movements around the world are fomenting similar reckonings; notably, Nigeria’s #endSARS campaign, #StrajkKobiet in Poland, demonstrations against Belarus’ Alexander Lukashenko, and the #MilkTeaAlliance in Southeast Asia.
To say that we have arrived at a pivotal moment for trust-building globally, one that social entrepreneurs, private sector leaders, and government officials must rally to support, may sound like a squishy call to arms. It is not. Here’s why rebuilding trust needs to be at the top of the agenda for us all:
Researchers working to understand the impact of trust have found that where trust is lacking, families, communities, and entire countries cannot flourish. Indeed, geographies where trust is lacking are the least economically advanced, as this next graphic illustrates.
Trust fuels economic development and a lack of trust slows it. As American economist, mathematician, political theorist, and Nobel laureate Kenneth J. Arrow once wrote, “Virtually every commercial transaction has within itself an element of trust [and]…much of the economic backwardness in the world can be explained by the lack of mutual confidence.”
Trust is a foundation for more than economic well-being. High trust is also connected to less violence, more political stability, and better health outcomes.
These connections between trust and well-being should lead us to consider a new interpretation of the classic: divide between the “haves” and the “have nots.” The “haves” are those fortunate enough to exist in a world of trust and the “have nots” exist in a world where trust is lacking.
Where fears and distrust have displaced hopes and dreams
Unfortunately, today, none of us need travel far afield to find communities that suffer from a lack of trust. In Seattle, where I now live - and likely in your locality - there are marginalized communities who have not been treated fairly by a multitude of overlapping and reinforcing systems. Communities that do not feel adequately protected by the police, served by the schools, or included in the banking system. Poorly functioning, unjust, biased, or broken institutions sow distrust.
Here’s the rub. While communities are often right to mistrust systems that have historically done them a disservice, their distrust of systems and institutions can undermine their ability to collaborate on problem-solving in the town square, in the marketplace, or on the factory floor. In this way, a lack of trust is both a symptom of a larger problem and a problem in and of itself. It can send communities into decline and prevent social and economic progress by eroding one key resource – collective effort.
How to rebuild trust
The decline of trust must be addressed on multiple levels: by building “trust equity” in governments, in our economic system, and in each other. Building that trust equity requires making our institutions and ourselves worthy of trust.
As a starting point, we must recognize that to establish trust and trusted partnerships we must act with both high integrity and high competence in our personal and work lives. As IREX President and CEO Kristin Lord explains in a recent article, we must be intentional not only about our goals, but also about our methods and process.
The OECD has identified four key behaviors for governments working to restore trust: they must act with reliability, be responsive, open and inclusive, and work with integrity. These are not goals for governments to achieve on their own. We must support shifts in government capacity and culture toward increased transparency, accountability, competency, capacity, good policies and regulatory frameworks, reliable service delivery, and the rule of law.
Too often, when governance systems fail to live up to these ideals, NGOs, private sector leaders, and philanthropists look for work-arounds. They establish parallel systems of service delivery -- think private schools, NGO-led health clinics and programs etc. However, these systems are fragile in that they are forever dependent on outside support and rarely reach scale. A more sustainable and impactful approach is to engage with committed government officials to help governments establish competency and capacity.
A few champions in this field include Open Government Partnership, which partners with governments to improve transparency and harness technology to increase accountability; Open Contracting Partnership, which works with governments to drive substantially improved value for money, public integrity and service delivery by shifting government contracting from closed, corrupt processes to digital services that are fair, efficient, and “open-by-design”; and The Abdul Latif Jameel Poverty Action Lab, which collaborates with committed government officials to build data-driven, evidence-based culture within governments.
Such partnerships can be transformative. Consider for a moment the recent fortunes of Liberia. Less than 20 years ago, the country was recovering from two devastating civil wars. The health care system was in ruins. Only one-third of the country’s health facilities still functioned, supported by a few dozen remaining doctors who lived and worked in only six of the country’s 15 counties – leaving a significant portion of the country’s residents with no access whatsoever to primary health care. To many Liberians, it felt like their government didn’t care about providing health, undermining trust.
The devastating cost of this loss of public trust became apparent when Ebola spread to Liberia in 2014. Health authorities’ pleas and guidance were viewed with suspicion, undermining early efforts to stop the spread of the epidemic. Government officials recognized that they needed to deliver basic health services to establish trust. Last Mile Health partnered with Liberia’s government to develop, pilot, and scale a national government-led community health worker program which today delivers basic healthcare to more than 700,000 Liberians across the country. The program has increased treatment for pneumonia, malaria, and diarrhea by more than 40 percent and increased trust – helping the government more effectively control today’s COVID-19 pandemic.
There is increasing recognition among funders that governance is a powerful pathway to trust and a lever worth doubling down on. My organization, the Chandler Foundation, recently joined a funder collaborative called the Transparency and Accountability Initiative , a small, but growing group of committed philanthropists that includes the Ford Foundation, the William and Flora Hewlett Foundation, Luminate, the MacArthur Foundation, the Open Society Foundations and the United Kingdom Department for International Development. Together, we are supporting long-term investments in improving government transparency and accountability.
Philanthropists often have a harder time seeing a role for themselves working to establish trust in the marketplace. However, to build an economy that facilitates broad prosperity, we need an economic system that is more open, inclusive, fair, and reliable. This requires a business culture that goes beyond short-term profit-seeking, and, importantly, a set of enabling conditions that is typically established or facilitated by government: fair competition; contract enforcement; secure and accessible property rights; and rule of law – to name a few.
To build a market that exhibits integrity and facilitates positive social impact, philanthropists can engage with business sector leaders, such as the B-corp movement or The B Team . Philanthropists can also support organizations such as Landesa, CIPE, or eGov Foundation that work with governments to build the necessary systems and structures for a fair and vibrant marketplace. They can also serve as bridge to make the market more inclusive by helping women or other historically disadvantaged groups overcome the barriers that have systematically excluded them from business opportunities.
Trust is contagious
When governments and the market have earned the trust of citizens, that trust tends to spill over to create greater trust in society as a whole, among individuals and groups. Simply put, trust is contagious.
Now is the moment for us to work together in uncommon alliances, across business, philanthropy, government, and civil society, toward achieving our common goal: spreading the most valuable currency for sparking and sustaining broad-based prosperity – trust.