or would repeated interaction in any group, such as a bowling club, be suffi-
cient? The impact of group membership and participation has been widely
discussed, in particular since Robert Putnam famously argued in a 1992 book
that civic engagement gives rise to social capital – the networks, norms and
trust that can then facilitate coordination and cooperation for wider economic
benefit. Putnam showed that the intensity of civil society or social capital
(measured by him as the vibrancy of associational life, newspaper reading and
other indicators of political participation) in different parts of Italy has been the
principal determinant of government performance.
Trying to explain the general causes of trust is more difficult than general-
izing from a single case study. Group membership may build trust by facilitat-
ing repeated interaction and familiarity between individuals independently of
the nature of that group, whether sporting or religious. One may be less likely
to cheat someone in business if one is going to be meeting them at the bowling
club next week. But, it may be that more trusting and cooperative individuals
are more inclined to join clubs. Greater social and income inequality may
reduce feelings of social cohesion and reduce trust by increasing the perceived
distance between ourselves and other groups of people (Wilkinson and Pickett,
2010). Strong legal institutions may reassure people that individuals will
behave (even if they secretly want to take the money and run) in a trustworthy
manner for fear of the legal consequences. Knack and Keefer (1997) test these
hypotheses and find that income, secondary education and checks on the oper-
ation of executive power have a positive impact on trust; income inequality and
the degr ee of ethnic and linguistic divisions a nega tive effect on trust.
Urbanization,population density and government size, they found, had no
impact on trust. Protestantism was associated with significantly greater trust
and Catholicism and Islam had negative but only weak relations to trust. There
is a strong effect of ethnic origin. Relative to an American of British ancestry,
there are higher levels of trust among those from Japan, Norway, Finland and
Sweden,and much lower levels among African Americans, Indians or
Africans. There is also evidence that trust is closely and positively related to
levels of trust within a person’s country of origin. This result is consistent with
the idea that trust is based on a prior cultural endowment which is transported
during migration and continues to operate in a different country among differ-
ent people (Guiso et al., 2006).
There is a debate about whether these positive effects benefit just the
members and in what way they impact on outsiders. Social capital for some
necessarily implies social exclusion for others (Harriss and Renzio, 1997).
Caste in India, for example, can act in ways that benefit members by solving
problems of information and contract enforcement in a traditional economy.
Individuals are born into a particular caste and (traditionally) into a hereditary
occupation. Interacting with fellow caste members, through dining, kinship
networks and in the workplace can stimulate relations of trust and facilitate the
acquisition of skills. Being able to observe the behaviour of individuals
combined with the gossip of relatives ensures the group is well informed about
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