India doesn’t lack trust, but Indians trust narrowly
Hindustan Times · Ramanan Laxminarayan ·
Whether anonymity builds trust between strangers over time or simply lets people transact without ever needing to trust is still an open question for India
Whether anonymity builds trust between strangers over time or simply lets people transact without ever needing to trust is still an open question for India
What makes some societies more successful than others? Is it something about culture, the education system, or scientific prowess? Underneath many of these measurable attributes is trust, which economist Kenneth Arrow called the lubricant of the social system. Trust both lowers the cost of every exchange or interaction and is associated with higher economic growth.
As one example, societal trust limits how large firms can grow. In fact, a study of Indian textile firms by Stanford professor Nicholas Bloom and colleagues found that the number of male family members was among the best predictors of how large a firm became. Through most of history, business ran this way. In India, Marwari, Gujarati and Chettiar merchants ran successful trading networks built on kinship, reputations and trust.
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