Trust: a scarce commodity in Latin American societies

I have received a recent report from the Inter-American Development Bank (IDB) on Latin America, which details that our region faces an enormous challenge related to the levels of trust in all sectors of society. Although it may seem to be a matter of individual values or beliefs, the absence of trust limits economic growth, innovation, entrepreneurship and institutional consolidation. In the last ten years, according to IDB, this indicator has been reduced by 11% in the entire region, remaining at very low levels, which could be expressed in the fact that only 1 out of 10 people has confidence in other individuals, groups and institutions.

Let me share some thoughts on this interesting document.

Trust refers to the ability to believe in others, that they will act in good faith, without being opportunistic or advantageous; on the contrary, they will act in function of a collective, of a greater good that will result in the well-being of all. “It is faith in others: in their honesty, reliability and goodwill”[1]. Something very far from reality, when we analyze the levels of corruption, violence or crimes such as swindling. Let us analyze some of the consequences of its absence, taking government, business and citizens as central actors.

Public policies play a fundamental role in analyzing the issue of trust. They determine the what, how and should be of a society. But the challenges in their formulation, implementation and, above all, in their evaluation of real impact, cause the region’s social and economic growth to advance slowly. Corruption, unfinished or poorly formulated policies and misinformation to citizens, lead to the fact that social problems mutate and transform much faster than the institutional solutions that seek to address them. This contributes to a decrease in trust, as citizens perceive a state that is not capable of addressing the challenges ahead.

Consequently, in the region there is a generalized impossibility of achieving coherence in political action in a sustained and effective manner. From the analysis conducted by the IDB, public institutions are the ones that generate the lowest level of trust in people; only 3 out of 10 citizens trust their government. The reason for this is that a culture of accountability is not developed, which explains why the less demanding accountability is, the more prevalent opportunistic behavior is.

Against this backdrop, people are prone to not abide by the rules, not pay taxes and not be willing to make individual sacrifices for collective projects. “When trust and civic-mindedness are low, public policies offer fewer benefits to citizens as a whole and relatively few to small groups”[2]. As a consequence, social cohesion tends to disintegrate because the state’s targeting is unequal, generating generalized discontent.

One way out is to train public officials. Public mechanisms must be created to promote a coherent language connected to actions. To send a clear message, to deliver what is promised and to be accountable are concrete realities that are fundamental from an institutional and state point of view. This is materialized in people who can contribute daily to the improvement of trust in thousands of public institutions that meet the main demands of society, such as education and health.

On the other hand, the absence of trust also affects the relationship between the company, the state and the employee. If companies distrust government regulatory policies, they are less likely to adopt them and to achieve the benefits they propose in principle, for example, in terms of wages, working hours or workers’ compensation. This, in turn, affects the levels of public confidence in both companies and the state, requiring the latter to over-regulate the activity of organizations. The result, on the one hand, is the promotion and validation of informality as a way for labor relations, and, secondly, a profound difficulty to innovate, expand or extend new business models, as well as goods and services.

It can be established that the consequences of the absence of trust are multiple and impact all levels of a country’s ecosystem. An inefficient public sector, an entrepreneurial network that is committed to informality and a citizenry that demands both systems to solve their material living conditions. But the reflection is more complex if we look at the causes. Colonial, slave-owning and natural resource transactional pasts have prevented the forging of common projects and, on the contrary, have encouraged values, beliefs and attitudes that foster opportunistic and advantageous action. In our region “individuals know that trustworthy behavior is not rewarded and untrustworthy behavior is not punished. They are more likely to believe that others will take advantage of them”[1] which generates apathy, biases and irreconcilable positions that lead to two poles that prevent solving the problem.

The solution lies in socially punishing opportunistic and corrupt behaviors that are detrimental to social development, generating incentives for companies, and training public officials to be the first guarantors of a system based on trust, based on clear information processes, efficient procedures and accountability supported by traditional and alternative means of communication. Likewise, actions must be promoted so that citizens trust their peers on a daily basis. The concrete challenge is how?

And you, how do you promote trust in your environment?

[1] Ver BID https://publications.iadb.org/publications/spanish/document/Confianza-la-clave-de-la-cohesion-social-y-el-crecimiento-en-America-Latina-y-el-Caribe-Resumen-ejecutivo.pdf

[2] Ver BID https://publications.iadb.org/publications/spanish/document/Confianza-la-clave-de-la-cohesion-social-y-el-crecimiento-en-America-Latina-y-el-Caribe-Resumen-ejecutivo.pdf

[3] Ver BID https://publications.iadb.org/publications/spanish/document/Confianza-la-clave-de-la-cohesion-social-y-el-crecimiento-en-America-Latina-y-el-Caribe-Resumen-ejecutivo.pdf