Trust and the Effectiveness of Public Policy

Abstract

Trust is the most pressing and yet least discussed problem confronting Latin America and the Caribbean. Whether in others, in government, or in firms, trust is lower in the region than anywhere else in the world. The economic and political consequences of mistrust ripple through society. It suppresses growth and innovation: investment, entrepreneurship, and employment all flourish when firms and government, workers and employers, banks and borrowers, and consumers and producers trust each other. Trust inside private and public sector organizations is essential for collaboration and innovation. Mistrust distorts democratic decision-making. It keeps citizens from demanding better public services and infrastructure, from joining with others to control corruption, and from making the collective sacrifices that leave everyone better off. The good news is that governments can increase citizen trust with clearer promises of what citizens can expect from them, public sector reforms that enable them to keep their promises, and institutional reforms that strengthen the commitments that citizens make to each other. This book guides decision-makers as they incorporate trust and social cohesion into the comprehensive reforms needed to address the regions most pernicious challenges.