Posts tagged: trust

Absolving the Six Deadly Sins of the Trust Literature: Reply to Nowrasteh and Forrester

Last week, Alex Nowrasteh and Andrew Forrester published a Cato working paper arguing that the empirical trust literature is so rife with weaknesses that we can’t learn much from it. Their central finding is that sub-regional trust levels in the United States don’t correlate with economic output, despite trust theorists arguing that trust promotes economic growth (primarily, probably, because trust lowers transactions costs, increasing the amount of exchange, and because of better policy implementation through a more trustworthy civil service).

My sense from the trust literature is that many of these concerns have been amply addressed. I’ve spoken with some trust researchers I know and thought I’d blog some of the responses. The basic worry is that Nowrasteh and Forrester are sort of selective in the papers they feature. The trust literature is actually pretty self-reflective, and have addressed a number of these worries.

Here are what Nowrasteh and Forrester claim are sins in the literature. SIN 1:

The first deadly sin of the trust-growth literature is that it contains no macroeconomic growth model that incorporates trust, either in its micro-foundations or otherwise (Beugelsdijk and Maseland, 2011, p. 213). Furthermore, the trust-growth literature does not contain a formal theory of social capital formation broadly or one of trust specifically (Guiso, Sapienza and Zingales, 2011, p. 469). Most trust researchers aggregate assumed effciencies at the microeconomic level up to the macroeconomic level and assume that trust creates economy-wide growth: an illegitimate leap in the logic of micro- to- macro functioning (Beugelsdijk and Maseland, 2011, p. 208). The relationship between an individual’s trust and income may not be true for society and cannot be aggregated up to form a truthful representation of the whole (Beugelsdijk and Maseland, 2011, p. 208).

Response: the authors don’t engage with the part of the trust literature that explores transmission mechanisms, writing just a bit about theoretical models in pp. 1-2. A number of papers, including this one, find that human capital and the quality of judicial-bureaucratic institutions are the two main transmission channels. In the US context, the first is hard to pinpoint because people often don’t work where they were educated. The second is also a problem since much institutional quality is defined at the federal level.

Another difficulty Nowrasteh and Forrester cite is supposedly that the literature “contains no macroeconomic growth model that incorporates trust.” Apparently this is false. If the likely transmission mechanisms are through institutions and human capital, there are plenty of growth models illustrating such effects. What the formal models miss is how to explain how trust affects institutions and human capital. However, see this paper, this paper, this paper, and Zak and Knack’s highly cited investment driven model. Oh, and this paper and this paper too. On to SIN 2:

The second deadly sin of the trust literature is that the trust question itself does not produce internally valid responses. Recall, the trust question is: \Generally speaking, would you say that most people can be trusted or that you need to be very careful in dealing with people?” There is no universal measure of trust because, in part, its meaning is culturally and contextually specific (Beugelsdijk and Maseland, 2011, p. xvii). The responses to the trust question are \Most people can be trusted,” \Can’t be too careful,” and \Depends.” The meaning of those responses is also unclear.

It’s not true that the trust question doesn’t produce internally valid responses. The primary argument they give is a twenty-year-old quote from Robert Putnam. But a number of studies do show that the generalized trust question does rather well: here, Sapienza 2013 which the authors cite but not on this point, and a Naef and Schupp 2009 working paper using the GSOEP dataset all show clearly that the question produces valid responses. Even Nannestad’s well-known 2008 review notes that the trust question has excellent test-retest stats. Now SIN 3:

The third deadly sin of the trust literature is that responses to the trust question do not generally predict trusting behavior in real-world micro-level experiments or in trust games.

The papers above also address this deadly sin, such as the Sapienza paper, which the authors cite, but, again, don’t draw the right conclusions from. Here’s another paper connecting trust responses and actual behavior. SIN 4:

The fourth deadly sin is that many of the major papers in the trust literature are contaminated by various types of sample biases.

The main findings in the literature can be replicated using much larger samples. And trust scores are so stable over time that slight demographic changes like those they describe are not relevant. SIN 5:

The fifth deadly sin is that even if the trust question were free from measurement error or sample selection bias, trust may be a proxy measurement for other deeper causes of economic development.

The trouble here is that the literature hasn’t found any examples of this. It’s also a bit of a cheap shot because that can be used as an argument against pretty much all findings in the empirical growth literature. SIN 6:

The sixth deadly sin of the empirical trust literature is that sub-national level data in the United States that is collected under better conditions do not indicate a robust positive relationship between trust and growth.

The sixth sin is only a problem if you think that regional trust should cause regional growth. But it might be that the different regions are sufficiently economically integrated with each other that isolating trust and growth in each region doesn’t tell us much.

In sum, Nowrasteh and Forrester seem to have missed some important papers that I think weaken their argument. It will be interesting to see how their paper develops once they take these papers into account. I think they’ll probably need to stop framing the paper in terms of identifying deadly sins, though.

Why Democrats Should Try to Restore Political Trust

The final question at the Democratic debate last night concerned the Ellen-W friendship and invited candidates to talk about a surprising friendship they have with someone across the political isle. Many viewers complained about the question, but I thought is it was appropriate and informative. A number of the candidates talked about the importance of restoring lost bipartisan trust. I appreciate that because bipartisan trust is inherently valuable. But I also think it makes political sense for Democrats. The societies that have the most extensive welfare states tend to be the most trusting, and that’s likely because high trust populations are more likely to support extensive redistribution. It is no coincidence that nation-states developed extensive social insurance following two world wars. Wars with other countries tend to unite nations, and create the solidarity necessary to convince richer and more powerful citizens to allow limits on their economic self-interest.

This is why restoring trust and lowering polarization is really important for Democrats’ policy goals, since they want large expansions of the welfare state. When Democrats act to increase polarization and sow distrust, they will often make their social democratic aims less politically feasible.

Unfortunately, Republicans lack the same incentives.

Beto Makes Politics War

Last night, Beto O’Rourke said that religious institutions that refuse to accept same-sex marriage should lose their tax-exempt status. That’s a sure fire way to make politics war: use the federal government to stigmatize half the country. Every conservative mosque, synagogue, and church in the country would be tarred by their own government as bigoted and fined for what they believe. Note that even the most committed judicial leftists would not revoke the tax-exempt status of mosques, synagogues, and churches, just certain non-profits and universities. And even that remains a distinctly minority position.

Comments like this are why many people of faith don’t trust the left to protect their liberties. The worry is that Beto let slip what most politically and socially powerful leftists believe in their hearts. I hope that’s not true, but in a country riven by polarization and mistrust, it is natural to wonder.

And yes, it’s a cliche, but a true one: this is how you get Trump. What are conservative people of faith supposed to do if this is what Democrats would do in office?

 

Operationalizing the French-Ahmari Debate by Measuring Trustworthiness

I think the recent intra-conservative French-Ahmari debate can be partially resolved by determining the extent to which secular progressives can be trusted to protect robust freedom of religion for religious traditionalists with conservative views about human sexuality.

If secular progressives are trustworthy, at least by and large, then French’s strategy of working within liberal democratic institutions makes sense. Conservatives should hold secular progressives to a constitutional order that they accept in general, but chafe at in certain cases. Secular progressives cannot always be trusted to uphold robust freedom of religion, but they’re trustworthy enough not to fundamentally undermine Christianity in the United States. They will obey liberal democratic norms on the whole; conservatives just have to fight to keep them honest.*

However, if secular progressives aren’t trustworthy, then Ahmari’s approach starts to make sense. Secular progressives will tend to undermine robust protections for freedom of religion in a systematic way, and so ignore constitutional constraints whenever they can get away with it. In that case, politics is war regarding freedom of religion, and conservatives may be permitted to respond in kind. Perhaps the liberal legal settlement is therefore unstable because the left cannot be trusted to uphold it, and so the only truly feasible arrangement is cultural and political victory in the fight against the left. There’s no peace and no middle ground because the other side isn’t trustworthy, and so can’t be trusted to keep a liberal democratic peace.

Social scientists have ways of measuring trust and trustworthiness in society and in institutions (I discuss them here), and we could probably use these tools to figure out the extent to which secular progressives can be trusted to protect robust freedom of religion. It would involve trying to systematically determine the extent to which secular progressives respect freedom of religion when they hold enough political power to violate it. At present, I’m not sure we have enough data to know for sure. There are certainly warning signs that make Ahmari’s position attractive to some, but I think we are far from the point where it is clear that we must overturn our liberal democratic peace.

* Yes, yes, conservatives need to be kept honest too.

Interviewed at 3:16 AM on Must Politics Be War?

Richard Marshall interviews me at 3:16 AM, a popular site for discussion of new work in philosophy. We primarily discuss my book, Must Politics Be War? (which you can buy from a link on the right of the blog or at the link), but we also talk about American politics, my biography, and my work on the proper role of religion in the public square. My work on religion in the public square can be found in my first book, Liberal Politics and Public Faith: Beyond Separation.

Must Politics Be War? in 500 words

My recent book, Must Politics Be War? Restoring Our Trust in the Open Society, argues that liberal democratic order has the unique capacity to avoid a war-like politics. Here’s a summary of the problem and my solution.

The problem of political war: low social and political trust leads to a war-like politics. But high trust is generally infeasible in societies with diverse perspectives on moral matters.

Why? People disagree about what is of value and what morality requires, so it is hard for them to appear trustworthy to one another. What one person counts as trustworthy behavior, another may count as untrustworthy. And when people have deep evaluative disagreements, we tend to see rejection of our views as evidence of an intellectual and/or moral vice on the part of those who disagree.

How do we overcome distrust? By motivating socially trustworthy behavior, behavior that multiple perspectives can see as evidence that one another are trustworthy. Distrust is overcome, then, by observing, or being able to observe, social trustworthiness.

To get social trustworthiness, we need people to comply with social norms that all can see themselves and others are having reason of their own to endorse and internalize as their own. In this way, we need compliance with social norms that diverse perspectives can converge upon. A public justification requirement thus naturally arises from a concern to sustain trust among diverse perspectives. If we want trust in a diverse society, we need to ensure that the social norms to which we are all subject can be justified to each (somewhat idealized) members of the public.

The public justification requirement also applies to legal and constitutional norms. If we organize our legal and constitutional norms according to which norms are justified for each person, we can drive socially trustworthy behavior, which in turn can sustain trusting attitudes even in the face of deep evaluative disagreements.

However, in a diverse society, it is hard to publicly justify non-neutral laws and policies, since people who reject the laws and policies as violent impositions of alien values will have defeater reasons for those laws and policies. This means that the unjustifiably coerced will see no reason to be trustworthy with respect to those laws and policies, and so will disobey when they can get away with it.

Once we throw out all the non-neutral laws and policies, we will be left with a system of rights (civil, economic, and political) that protect a large measure of liberty for each individual or group to live their own lives in their own way. We will end up with an open society. For this reason, an open society has the unique capacity to sustain trust between diverse perspectives, rendering high levels of trust feasible even under diverse conditions, solving the problem of political war.

Sweden, Venezuela, and Socialism

Now that socialism* is no longer a dirty word in American politics, we’re starting to argue about what socialism in the United States would look like. Conservatives and libertarians argue that American socialism will make us more like Venezuela, whereas progressives argue that American socialism will make us more like Sweden. I think both arguments have strengths and weaknesses.

I. Welfare vs Regulation

To see why, let’s distinguish between the welfare state and the regulatory state. The welfare state provides various kinds of transfers, tax-funded social programs that typically take the form of social insurance. The regulatory state intervenes in markets to fix various purported flaws, say through imposing price controls, providing subsidies, restricting the activities of business, creating unstable property rights regimes, and the like.

Substantially expanding the American welfare state is probably not going to lead us to become more like Venezuela.** The freest countries tend to have extensive welfare states. But substantially expanding the regulatory state runs that risk. If we look at the most influential economic freedom index, which is comprised mostly of measures relating to the regulatory state, Venezuela ranks 179th out of 180. Sweden, by contrast, is in the top 20. And if you remove government spending from the economic freedom index, Sweden should climb even higher, and further away from Venezuela. Sweden has one of the freest and most stable market economies in the history of the world, whereas Venezuela is riddled with constant, desperate market manipulation. The Venezuelan nation-state messes with the economy far too much, and that has led to massive dislocations and to tyranny. The Swedish economy, by contrast, redistributes a lot of wealth, but Swedes deliberately moved away from a heavy regulatory state a few decades ago, and it’s done them a world of good.

Here’s how this point can improve our political discourse. Bernie Sanders stands above all the other Democratic presidential contenders in his enthusiasm for the regulatory state, and has proposed dramatic expansions of the welfare state. When Bernie talks about expanding the regulatory state, such as supporting nationwide rent control, pointing to Venezuela is fair game. But when Bernie talks about expanding the welfare state, pointing to Sweden (today) is perhaps more appropriate.

That’s not to say that an extensive welfare state is justified. The point is that expanding the welfare state doesn’t set us on the road to Venezuela, while expanding the regulatory state very well might.

II. Trust Matters Too

Both sides should also bear in mind that social trust plays a huge role in explaining how well a society’s political and economic institutions work. Venezuela is a low trust society, whereas Sweden is a ridiculously high trust society, with the United States in between (trust data).

For instance, in the mid 90s, nearly 60% of Swedes said most people can be trusted, 35% of Americans said most people can be trusted, and 14% of Venezuelans said most people can be trusted. Sweden continues to hover around 60-65%, the US around 35-40%, and Venezuela around 13-15%. If you don’t trust most people, transactions are harder, including transactions with the civil service. The programs that work in Sweden may work worse in the US, and will tend to work worse still in Venezuela. So it’s important to recognize social trust as a variable in policy efficacy.

This limits the claims of both sides. Progressives shouldn’t expect that Swedish policies will work as well in the US, and conservatives and libertarians shouldn’t expect that Venezuelan policies will work as badly in the US.

* Here “socialism” refers to an extensive social democratic state, not government ownership of the means of production.

** Unless the social programs are funded with unstable resources subject to great government control, like revenue from government-run oil companies, as this mixes the welfare state and the regulatory state.

Trump, Trust, and Impeachment

The greatest danger Trump poses to the country is norm erosion. All free and democratic societies depend on norms beyond the law itself in order to function well. In particular, they rely on social norms, patterns of behavior that are not only backed by empirical expectations (people think most others will follow the norm) but by normative expectations (people share a belief that we think others think we ought to follow it). So social norms are publicly recognized rules that are seen to be in effect and normatively binding. Social norms are one of the key sources of social order. In many cases, if laws contradict social norms, they will simply be ineffective.

Democracy depends on political officials following social norms like, well, don’t use your office for personal gain. These are acts that researchers call “grand corruption,” and they are probably the greatest threat to trust in government. What’s worse, corruption is one of the few factors that clearly negatively impact social trust, a precious resources that makes just about every institution work well. When an elected official, usually a very high status person, violates an anti-corruption social norm, they therefore not only facilitate the harm the social norm discourages, they undermine the basis for social cooperation itself.

Ordinarily, social norms are enforced through sanctions – blame and punishment – where violators are held accountable by members of their community, and most importantly by high status members. The hope is that the sanction, or the prospect of sanction, motivates compliance with the norm, and some kind of repentance by the norm violator. The primary aim is to impose costs on the violator, which will include the moral emotions of guilt and shame, and drive compliance. If the violator can’t be successfully punished, the aim is to discourage others from violating the norm in the future.

Impeachment might not cost Trump, who I think welcomes it, but it can impose costs on future violators, since most officials have a capacity for guilt and shame and don’t want to be remembered for being impeached. So I think it makes sense to move forward. However, I also worry that Trump may benefit from the impeachment process, especially because failing to remove him can be spun as exoneration, and Trump can easily control the media narrative throughout the trial. If he benefits from this sanction by creating a counter-sanction, that may embolden not only him, but future officials.

For this reason, it is essential that Trump be successfully sanctioned. But successfully sanctioning someone who feels no guilt or shame, and who is a master media manipulator, is hard. It will require skillful political maneuvering. If it succeeds, we may preserve the precious resources of social and political trust. If it fails, God help us all.

 

Trust Papers Series #1 – Trust and Monarchy

Trust makes reconciliation possible. That’s what’s led me to my research on trust and society-wide trust, often called social trust. There are a massive number of papers in political science and economics that try to establish the causes and consequences of social trust. I’ve spent the last few years reading them. In light of my work, I’m starting a series of posts on my favorite trust papers, and I hope to share new papers as I read them. If any trust researchers are reading this post, please send me your papers. I can’t promise to post them all, but I’d love for this blog to become a place where you can share your work.

I’ll begin the series by sharing one of my favorite trust papers. I like it in part because it contains a really weird result – monarchies are more trusting than non-monarchies.

The paper explores the determinants of generalized trust across countries. The findings suggest that only few variables can be considered significant. Social polarization in the form of income inequality and ethnic diversity reduces trust, Protestantism and having a monarchy increases trust while post-communist societies are less trusting than other. The findings also provide support for the use of a standard indicator as a stable measure of generalized trust and emphasize the importance of taking endogeneity seriously.

My sense is that monarchy promotes trust because it provides people with a high status, non-partisan person. So people can unite around someone who seems to transcend some salient social cleavages.

The paper has other interesting results too. Protestantism promotes trust. I think the reason is that Protestant countries tend to break up large families, since large families can tempt people to only trust their clan and not their institutions or people from different walks of life. Post-communist societies are less trusting, and here my guess is that communist countries have secret police, so you never know if you can trust someone not to report you and get you sent off to Siberia.