TRUST AND INTERFIRM RELATIONS IN DEVELOPING AND TRANSITION ECONOMIES

The role of trust in facilitating economic growth has been highlighted in previous contributions to this journal. In order to take this deba te forward , this article argues (1) that move attention needs to be g iven to the relationship between sanctions and trust, and (2) that it is worth distinguishing between the minimal trust for making markets e ffective and the extended trust required for deeper kinds of inter-fir m co-operation to work. The article goes on to ask why minimal trust i s lacking and so hard to construct in the republics of the former Sovi et Union. It then examines how extended trust grows or can be made to grow in industrial supply chains and clusters in developing countries.