Michal Lehuta and Kristina Stefanova
Prof. Jens Beckert
Intermediation, Networks and Social Capital
International University Bremen
Spring Semester 2003
June 6th, 2003


Trust – Definition, Importance
The question of trust is particularly crucial for countries going through transition from communism to democracy and free market. Before starting a discussion about the development of trust in the post-communist countries the term “trust” needs to be defined and explained in all of its variations. Susan Rose-Ackerman recognizes three types of trust that are caused by different factors. Generalized trust, which expresses a background psychological attitude, has been used recently as an indicator to measure the health of a society. The results, however, are very difficult to interpret because there are not well-specified links between generalized trust and the performance of government and market institutions. In countries experiencing transition it is even more problematic to understand this measure because interpersonal trust often diverges from trust in institutions. Findings suggest that generalized trust and democracy support each other, but do not imply that the development of general trust will generate strong democracies. The next kind of trust that is distinguished is one-sided reliability, where person A decides whether to trust or not person B on the basis of information about incentives, motives and competence. An example is the market of “lemons” where the seller anticipates the buyer’s behavior, but the buyer is the only one who needs to exhibit trust. B depends on A’s estimation of B’s trustworthiness. The third type is the reciprocal trust, under which links may be established on the base of mutual calculations of others’ interests, on feelings of personal affection and responsibility, or on shared values. Trustworthy behavior is influenced by the degree of trust and trustworthiness expressed by others.

Why is trust important in the establishment of a democracy?
Modern societies are extremely complex systems requiring a host of formal organizations to act collectively on behalf of individuals and often also in the interest of society as a whole. What’s even more important, trustworthy organizations are crucial for the orderly transition from authoritarianism to democracy.