The political economy of trust

There has been a considerable rise in discourses concerning trust from a ra nge of academic disciplines and perspectives. Unfortunately, many of these literatures have talked past, rather than to, each other. This paper develo ps an analysis of trust in economic activity through a dialogue between the disciplines of economics and sociology It outlines the relationship of tru st to economic co-operation and identifies a number of types of trust. The potential benefits of these different types of trust to advanced capitalist economies are identified. Consideration is given to the processes of trust creation and destruction in market economies. Particular emphasis here is on how far trust can be symbiotic with, or contradictory to, power and the market. With an analysis of the key properties of individual agents which m ake them more or less prone to trusting behaviour, the paper is then able t o identify the critical factors likely to underlie high-trust and low-trust economies. This has important public policy implications given the potenti al benefits which trust can have for advanced economies.