The dynamics of trust

What do we mean when we speak of trust? What are its foundations and implications?

 
The notion of trust is rich and slippery, and evokes much misunderstanding that needs to be set right. What is trust, who may be trusted, in what aspect of behaviour, and on what basis? A first definition of trust might be: “I am vulnerable to the actions of another but I believe that no significant harm will be done.”
Who is the trustee, the one trusted? One can trust individuals, organisations, institutions and systems. For example, in the financial crisis distrust concerning banking may concern individual bankers, banks and their policies, supervisory institutions (such as central banks), or financial and labour markets. One may trust people one is dealing with, but this is not enough, because whether they can honour commitments depends on their position and role in the organisation. One can trust an organisation, e.g. on the basis of its reputation, but this does not by itself ensure that one can trust the people one is dealing with. That depends on the procedures of supervision, control, reporting and culture of the firm. Whether an organisation can honour its commitments depends on external pressures of competition and the state of the economy.

Bart Nooteboom

Bart Nooteboom is professor of innovation policy at Tilburg University. His research includes innovation, entrepreneurship, organisational learning, inter-firm collaboration, and trust. He has published ten books and 300 papers. He is a member of the Royal Netherlands Academy of Arts and Sciences, and was awarded the Kapp prize for his work on organisational learning and the Gunnar Myrdal prize for his work on trust. He is ranked among the top 30 Dutch economists and listed in Who‘s Who in Economics and Who‘s Who in Management Science