What is Trust?
We’ve already looked at some of the reasons why relationships characterized by trust tend to produce more social capital. Trust is even used as a proxy indicator of cognitive social capital by the World Bank Social Capital Initiative. But what exactly is trust, and how do we measure it? Bart Nooteboom tackles these questions in his paper Social Capital, Institutions and Trust, and we think his discussion is a helpful lens through which to look at social capital.
Merriam-Webster defines trust as “assured reliance on the character, ability, strength, or truth of someone or something,” or “one in which confidence is placed.” In his paper, Nooteboom references two definitions of trust from literature that are more nuanced:
- Trust is a type of behavior: actions that increase one’s vulnerability to another whose behavior is not under one’s control and in a situation where the penalty one suffers if the other abuses that vulnerability is greater than the benefit one gains if the other does not abuse that vulnerability (Deutsch 1962)
- Trust is an underlying disposition: a type of expectation that alleviates the fear that one’s exchange partner will act opportunistically (Bradach and Eccles 1984)
These definitions support the broader idea that trust reduces relational risks and increases the likelihood of relational benefits. It has this effect whether the relationship is a personal relationship between individuals, a business relationship between organizations, or even an impersonal relationship between an individual and an institution.
The World Bank’s Social Capital Initiative set a precedent for measuring trust with its Social Capital Assessment Tool. The Household Questionnaire includes a full section devoted to trust with questions surrounding community members’ reliability in lending and borrowing, willingness to care for each others’ property or family during an emergency and interest in each others’ welfare. But Nooteboom suggests that questions like these may not be as precise as we would like. He suggests that trust has to do with two facets of another person’s behavior:
- Trust in competence (ability to conform to expectations)
- Trust in intentions (performing in good faith according to the best of competence)
Trust is difficult to measure because people are focused on one facet or the other depending on the context.
For example, all of the questions in the SOCAT questionnaire are focused on understanding perceptions of community members’ intentions. In a given community these scores could be quite high, but the community could actually have very low trust because there is a low perception of competence. More specifically, if I trust that someone in my community would be willing to take care of my property in an emergency (intentions), but I don’t trust that they would do a good job (competence), I wouldn’t ask them for help.
If we are just examining perceived intentions we miss out on information about competence. If we ask a generalized question about trust, we will get some answers based on an analysis of intentions and others based on an analysis of competence. So a good measure of trust must explicitly incorporate analysis of both intentions and competence.
Trust vs. Reliance
To solve this inherent ambiguity with questions surrounding trust, Nooteboom proposes a differentiation between reliance and trust.
Reliance is rooted in extrinsic factors such as control and self-interest. For example, I rely on you to do your job well because I know you are governed by your organization’s policies. Or I rely on you to pay your bills on time because I know you will face a loss in revenue if you have to switch to another vendor.
Trust is rooted in intrinsic factors that go beyond control and self-interest. For example, I trust that you will take good care of my kids while I am gone because you have a moral obligation to do so. Or I trust that you won’t take advantage of me as a contractor because we have shared values.
This differentiation leads us to the question: do reliance and trust both produce social capital? We think they can. You might have a business relationship with someone who you believe is primarily motivated by extrinsic factors, and your reliance on that person has led to resource exchange and reciprocity. But relationships based only on reliance are not as likely to be long-lasting because extrinsic factors can change more easily than intrinsic ones. It’s also likely that they aren’t as strong as relationships characterized by true trust.
We plan to differentiate between reliance and trust moving forward as we look at sources of social capital and methods for measuring it. It’s a great way to analyze your own personal relationships, too!