Download Bo Rothstein (born 1954) holds the August Röhss Chair in Political

Trust, Social Dilemmas and Collective Memories
Bo Rothstein
Abstract
What does it take to move a society from an inefficient equilibrium, characterized by low
social capital, distrust and inefficient legal and political institutions, to the opposite situation?
The starting point is a discussion of solutions to the “social dilemma” problem presented in
rational choice theory, which are found wanting. Without norms of trust, the “tragedy of the
commons” is unavoidable. An institutional mechanism is identified which implies that trust
can be established “from above”, that is, the trustworthiness of “efficient” institutions creates
interpersonal trust, which in its turn make the “production” of social capital in civil society
possible. It is argued that the theory of “collective memories” can serve as the missing link in
the theory of social capital and game-theoretical explanations of cooperation. The advantage
of this approach is that it brings action and power into the theory of social capital and social
dilemmas.

Forthcoming in the Journal of Theoretical Politics
A Story from Moscow1
In November 1997, I was invited to Moscow to lecture about the Swedish civil service for
academics, politicians and bureaucrats. The topic given to me was, “How To Control the Civil
Service”. After the talk, I had the opportunity to speak with one of the top officials in the
Russian tax authority. He was very interested in what I had to say because he had learned, in
Sweden, taxpayers are actually paying their tax bills. That is, of the total amount of taxes that
people are suppose to pay, according to tax authorities, ninety-eight percent also reaches the
government. The tax official told me that, at that time, the equivalent level in Russia at that
time was twenty-six percent. Again, we are talking about the taxes the government knows its
citizens are suppose to pay according to the tax laws, thus, excluding the “black” and “gray”
parts of the economy. When we talked about this huge difference and how to comprehend it,
he gave me the following explanation for the situation in Russia. He argued that it was not the
case that most Russians did not want to pay taxes or were especially dishonest, instead, the
problem, he explained, was that of a classical “social dilemma” (Dawes 1980, Ostrom 1998).
Most Russian citizens actually wanted to pay what they were supposed to because they
cherished the things that would be done with their tax money (health care, education,
pensions, defense, etc.). But, they would only be willing to pay their tax bills on two
conditions, which were both never fulfilled. First, they rightly did not believe that all “the
other” taxpayers where paying their taxes properly, so it was really no point in being “the
only one” who acted honestly. The goods (public, semi-public or private) that the government
was going to use the money to produce, would simply not be produced because there were too
little taxes paid in the first place. Secondly, they believed that the tax authorities where
corrupted, so that even if they paid their taxes, a significant part of the money would never
reach the hospitals or schools, etc. Instead, the money would fill the pockets of the tax
bureaucrats. In both cases, trust in others was in extremely short supply.
I then asked if this was true, and was told that “yes”, there is a significant amount of
corruption in the huge Russian tax bureaucracy, consisting of more than 100,000 persons.
But, again, the problem was explained to me as a standard “social dilemma” (or very large npersons “prisoners dilemma”). I was told that most of the bureaucrats did not really want this
corruption to continue. They were willing to stop taking bribes and stealing tax money, if they
could be convinced that (almost) all the other bureaucrats were also willing to comply with
the rules. The problem was, so far, top officials in the tax authority had found no way of
convincing the lower level bureaucrats that corruption would come to an end. Again, this was
a case of lack of interpersonal and institutional trust.
I told him that I could very well believe his argument, that the reason Swedes were
willing to pay their (high) taxes was not least that they a) thought that most other citizens paid
what they were supposed to pay, b) that the degree of corruption was very low. In fact, there
is pretty good survey research on tax-evasion in Sweden that confirms that citizens belief in if
other citizens complied with the tax rules had great influence on their own willingness to pay
their taxes, (cf. Rotter 1980, Laurin 1986). Moreover, the story also seemed to confirm the
survey based research about tax paying in the United States by Scholz and Lubell, who
concludes that “citizens will meet obligations to the collective despite the temptation to free
ride as long as they trust other citizens and political leaders to keep up their side of the social
contract,” (Scholz and Lubell 1998: 411). This was, I told him, variations in political behavior
that social scientists had excellent theoretically sophisticated models to explain (Levi 1988).
In the words of Bardhan: “corruption represents an example of what are called frequently1
Thanks to Madge Spitaleri and Eric Wanner at the Russell Sage Foundation for providing an excellent
environment for research. Special thanks also to Paola Cesarini and Piotr Swistak for very helpful comments on
earlier versions.
dependent equilibria, and our expected gain from corruption depends crucially on the number
of other people we expect to be corrupt” (Bardhan 1997: 1331). In other words, the more
people that we think are corrupt, the more people will be corrupt. The sad news is of course
that especially a non-efficient equilibrium of the kind existing in the Russian tax system,
seems to be very robust (Bendor and Mookherje 1987, Bendor and Swistak 1997).2
The question I then got from the Russian tax bureaucrat, and that had to admit I could
not answer, was the following: “How do you go from a situation such Russia’s to the situation
which exists in Sweden?” That is, how do you move a society (or an organization) from a low
trust situation with massive tax fraud and corruption, to a high trust situation where these
problems, while existing, are much less severe. In the words used in game-theory, what does
it take to move a society from a stable, but inefficient, equilibria, to a stable efficient
equilibria?3 Examples of this problem are easy to find. An expert on the economic problems
in Latin America, recently interviewed in the New York Times states that, “I don’t think there
is any more vital issue in Latin America right now….It’s a vicious cycle that is very hard to
break. People don’t want to pay taxes because they say government doesn’t deliver services,
but government institutions aren’t going to perform any better until they have resources,
which they obtain when people pay their taxes.” (Rother 1999). What is the interest of the
individual citizen in such a situation is not so clear because it depends on what they think
other citizens will do. As Margaret Levi has argued, in political and social situations such as
these, “there is nothing comparable to the economics dictum of getting the most for the least
for one’s money in the marketplace” (Levi 1997: 24).
Generalized Trust and Trust in Government
I think this is a very important problem for both theoretical and political reasons. Simply put,
I think we know quite a lot about the “statics” in this area. Field research, historicalcomparative research, formal game theory and experimental psychological research now seem
to have reached a point where very different types of equilibria can be explained when it
comes to establishing more or less efficient solutions to social dilemmas (Bates, de Figueiredo
Jr et al. 1998, Ostrom 1998). It is not difficult to understand or explain the social mechanisms
that make the agents, such as the Russian taxpayers or tax bureaucrats, when stuck in an
equilibria , choose to act in ways which reproduce that equilibria, even if it is collectively
irrational for them to do so. In popular language, we know why “once the system gets there, it
stays there”.4 As it has been formulated by Fritz Scharpf:
If actors were able to choose their orientations (…), they would be better of, in purely
individualistic terms, if they could opt for solidarity - and could trust others to do
likewise. But the ability to trust is of course the crucial problem. If one party acts from a
solidaristic orientation while the other is motivated by competitive preferences, then the
trusting party would be left with its own worst-case outcome… In other words, being
able to trust, and being trusted, is an advantage-but exploiting trust may be even more
advantageous (Scharpf 1997: 86f).
2
For analyses of how moves from inefficient to efficient equilibrium in tax policy have been made, see
Levi (Levi 1988), Berentzein (1996) and Thorp (1996).
3
I thank Piotr Swistak for reminding me that every important problem in the social sciences may have an
explanation, but they may not have a solution that we like.
4
Technically there are many different types of equilibria. When the term is used here, it refers to what is
known as a Nash-equilibrium: “a pair of strategies that are best replies to each other on the equilibrium path”
(Morrow 1994: 351). It is a situation where non of the players can do better by making a unilateral change of
strategy.
From a political economy point of view, it has been forcefully argued by Mancur Olson and
Douglas North that it is the lack of efficient institutions that explains why so many countries
remain poor, despite growth in the world economy. As North recently has argued: “historical
experience makes clear that efficient institutions are the exception” (North 1998: 494).
Without efficient institutions, agents can usually not produce public goods and the transaction
costs in economic exchange can become detrimental to economic growth. Buying private
protection to protect ones property rights is usually both expensive and an uncertain
investment (North 1990, Olson 1996). To quote Mancur Olson’s last published article:
the large differences in per capita income across countries cannot be explained by
differences in access to the world’s stock of productive knowledge or to its capital
markets, by differences in the ratio of the population to land or natural resources, or by
differences in the quality of marketable human capital or personal culture. Albeit at a
high level of aggregation, this eliminates each of the factors of production as possible
explanation of most of the international differences in per capita income. The only
remaining plausible explanation is that the great differences in the wealth of nations are
mainly due to differences in the quality of their institutions and economic policies
(Olson 1996: 19).
The human costs, from Sierra Leone to Kosovo, from Rwanda to Palermo, for the people
living in societies without efficient institutions, are immense (Bardhan 1997). Thus, the
problem we face is to explain the dynamics, that is, under what circumstances a system is
likely to move from the one situation to the other. How can Palermo become Milan, and how
can Moscow become Stockholm? And what does it take for Stockholm to become Moscow?
As Elinor Ostrom has argued, “the really big puzzle in the social sciences is the development
of a consistent theory to explain why cooperation levels vary so much and why specific
configurations of situational conditions increase or decrease cooperation in first- or second
level dilemmas” (Ostrom 1998: 9). If it is some form of trust that is needed, and as I will
argue below there seem to be good arguments for this, then how can trust be created? It is
well known from field and experimental research that placing persons in small groups where
they have to talk to one another, is beneficial for creating trust and collaboration. Talk, or
personal communication, or engaging in mutual discourse of common problems, can build
trust. “Cheap talk”, as is the game theoretic expression, turns out to be not so cheap (Sally
1995). But we can not put 100,000 Russian tax bureaucrats in a room for face-to-face
communication, not to mention the entire Russian population. Deliberative democracy, for all
its sophisticated theoretical elegance, seems to be difficult solution for simple reasons of
practicality (cf. Gutmann and Thompson 1996, Elster 1998). Interpersonal trust, and trust in
societal institutions and in other citizens whom you do not know, are two very different things
(Levi 1998, Rothstein 1998).
While the “discourse” solution is ruled out in such large-n situations, the simple
answer to the Russian bureaucrat would have been that they should introduce “the rule of
law” type of institution. Corrupted bureaucrats and tax-cheating citizens would then be caught
by the police and punished by the courts. By “fixing the incentives” in this way, standard
economic theory tells us that the problem would be solved. It’s simple, just increase the
negative pay-off for cheating and corruption (including the risk of being caught) to a point
where the fear of being caught would be higher than the greed that leads agents to engage in
tax fraud and corruption. When society is constructed so that fear is larger than greed, things
go well.
But as have been argued by e.g., Pranab Bardhan, Michael Hechter, Mark Lichbach,
and Gary Miller, accomplishing this is not an easy thing to do, because constructing such an
institution is in itself a collective action problem (Miller 1992, Bardhan 1997). Presuming
standard utility maximizing self-interested agents, where do you find the uncorrupted judges,
bureaucrats and policemen in a society where corruption is rampant? Most judges and
policemen may reason like the Russian tax bureaucrats above, perfectly willing to act
honestly, but only if they trust most other policemen and judges to do the same (Hechter
1992, Weingast 1993, Lichbach 1995). Comparing four different solutions to this problem,
(markets, hierarchies, norms and contract enforcing institutions) and writing from within a
game-theoretic approach, Lichbach has stated that: “The major difficulty with every solution
to the Cooperator’s Dilemma is that each presupposes the existence of at least one other
solution. All solutions to the Cooperator’s Dilemma, in other words, are fundamentally
incomplete. This is, of course, quite troubling” (Lichbach 1995: ix). It should be added that
(from a rationalistic point of view), it is the efficient “Stockholm” type of solution to
problems of social dilemmas that are difficult to explain (Molander 1994, North 1998). What
is most likely to happen with the “homo economicus” type of players is that they end in
“social traps”, i.e., the “worst for all” outcome predicted by the famous prisoners’ dilemma
game (Platt 1973). As Michael Hecther has formulated the problem, if agents act from the
standard self-interested rationality, it is most likely that “the agents will outsmart themselves
into supoptimal equilibria” (Hechter 1992). Adam Smith’s famous ‘invisible hand” can not
run an efficient market economy by itself, because the institutions needed to prevent
“opportunistic” behavior will not automatically be produced by self-interested utility
maximizing agents (Ben-Ner and Putterman 1998: 4). The standard solution presented in
game theory to this problem, known as “iterated play”, may work in two-persons’ games, but
does not hold for n-persons’ games (Bendor and Mookherje 1987). It has even become
doubtful for two-persons’ games because of the “shadow of the last game”. If the agents know
that there will be an end-game where it will be in the interest for the one who has the last
move to “defect”, this will make the player with the next to the last move, “defect”, and so on
(Rapoport 1987).
Furthermore, regarding the standard “rule of law” solution, Weingast have made a
very important comment, namely that “(a) government strong enough to protect property
rights is also strong enough to confiscate the wealth of its citizens” (Weingast 1993:287). If a
government has the power to establish the institutions to implement a “rule of law” system,
they would abuse that same power to break the “rule of law” (i.e., infringe on property rights)
if acting as agents in game theory are supposed to act (cf. Molander 1994). Without a very
long time horizon, and lacking sophisticated knowledge of the relation between incentives,
investment and economic growth, governments are not likely to respect “the rule of law”.
How to understand the existence of the “rule of law’ and other similar efficient
institutions from within a rationalistic perspective is complicated. Weingast’s analysis of the
role of the U. S. Supreme Court in the New Deal era is an interesting example. The story is
well-known – in order to stifle the Court’s resistance to his New Deal policies, President
Roosevelt wanted to increase the number of judges in the Court. The new judges he would
appoint would be expected to vote against propositions which deemed the New Deal
legislation unconsitutional. In his analysis of why this strategy to “pack” the Court failed,
Weingast falls back on the following, fairly non-rationalistic, normative argument: “(b)ecause
it constituted a direct assault on the constitutional principle of the separation of powers, large
number of citizens, including many of the intended beneficiaries, viewed the plan as
illegitimate” (Weingast 1997:254). Thus, Weingast seem to argue that even if it was in their
instrumental interest to support Roosevelt’s strategy to pack the Court, for the majority of
Roosevelt’s supporters, the norm against tampering with the constitution took precedence.
According to Weingast, Roosevelt’s supporters did not withhold their support because they
thought would gain something. Instead, they simply viewed the plan as “illegitimate”. If this
is the case, then Weingast’s ambition to explain the “rule of law” from within rationalistic
theory is incomplete, because if agents act against their instrumental interests, the
assumptions of the theory are violated.
Another case in point is Gary Miller’s and Thomas Hammond’s discussion of the use
of the so-called “city managers” as a successful way to get rid of corrupt party-machine
politics in American cities during the interwar period. These where highly trained civil
servants known for their high moral standards and for being disinterested, selfless servants of
the public good. They had a reputation, that as a rule, they could not be bribed. But as Miller
and Hammond state, “(t)o the extent that such a system works, it is clearly because city
managers have been selected and/or trained not be economic actors” (Miller and Hammond
1994: 23). And, of course, there is then no collective action problem in the first place, because
it is “solved” by blurring the assumption about human behavior on which the model is built.
Due to what is known about bureaucratic discretion, the possibility to solve this problem by
implementing controls from above is very limited ( cf. Miller 1992, Brehm and Gates 1997).
Miller and Hammond’s advice to our Russian friend mentioned above is thus very simple,
namely: “to find out how such disinterested altruistic actors are created, and then reproduce
them throughout the political system” (Miller and Hammond 1994: 24). Well, what more can
you say, than “good luck”.
Apparently, without strong ethical norms against self-interested behavior, the “rule of
law” can not work as a trust enhancing institution (Dagger 1997, pp.105-116). Douglas North
has recently argued that while formal institutions can help to create trust, “it is the informal
constraints embodied in norms of behavior, conventions, and internally imposed codes of
conduct that are critical” (North 1998, p 506, my emphasis). Without such internally imposed
codes, the first uncorrupted judge or civil servant would not have seen the light of day, given
the assumptions made within rationalistic theory (Miller and Hammond 1994). Thus, the
question is: How can the government, or any other powerful actor, establish credibility and a
reputation for trustworthiness so that other actors (citizens, firms and organizations) believe
that state officials will honor their commitments in the future? (Levi 1998). The argument is
that it is not formal institutions, per se, that can solve this problem of credible commitments,
but instead the actors “cognitive maps” about how trustworthy the actors are in operating
these institutions. This is, by and large, an effect of the institutions historical record of being
trustworthy or not (Rothstein 1998). As Williams et. al. have stated this problem:
Credible commitments are sticky - hard to establish and hard to change - because they
are based on a long history of past policies. Jump-starting capitalism, with the
importation of institutions, thus looks problematic. The beliefs to support capitalism
must evolve with institutions’ longetivity. … For those societies without a policy
tradition of respecting property rights, the perceptions of credible commitment may
therefore be all but possible to establish. Institutions can be changed almost at will, but
political memories are long and hence belief systems relatively entrenched.” (Williams,
Collins et al. 1995: 18)
It is not the formal institutions as such, but the perceived history of how these institutions
have acted, that matters (Bardhan 1997: 1333). That is why exporting a formal institution
from one setting to another usually fails to have the expected positive effects. Institutions as
such do not automatically change values and behavior, because they do not operate in a
history or context free environment (Katznelson 1998). In game theoretic parlance, “history of
play” matters. As Fritz Scharpf writes in his Games Real Actors Can Play, “(t)he fact that two
actors have a memory of past encounters as well as an expectation of future dealings with
each other is assumed to have an effect on the individual interactions” (Scharpf 1997: 137). If
this is correct, then rationalistic theories need to be combined with a theory of how this
“memory of the past” is determined.
The problem stated above, how individual and collective rationality comes into
conflict, is the major theoretical problem within this approach. And I agree with Elinor
Ostrom when she argues that this is the major problem in political science (Ostrom 1998).
However, as I hope to have shown, it can not be solved within an approach where agents are
presumed to act solely from self-interested utility maximization. The temptation to free-ride
will, sooner or later, overwhelm such agents (Dagger 1997: 107). This occurs because as soon
as the payoffs are high enough, they will engage in opportunistic behavior and thus destroy
what credibility and trust there is (Miller and Hammond 1994). As Ziegler has recently
argued: “In a strategic trust game there usually is an incentive for the trustee to misuse trust”,
(Ziegler 1998:445). Obviously, something other than pure self-interested utility maximization
is needed to solve the problem of collective action which game theory so forcefully has put
forward (Ben-Ner and Putterman 1998). This is probably the reason why there is an
increasing interest in “non-rationalistic” variables such as norms, signs, history, culture. etc.
within the game theory approach in political science (Levi 1998, Ziegler 1998).
What is Trust?
If trust is what is needed to move from a non-cooperative to a cooperative situation, we need a
definition of what it is. Here, I will limit myself to contrasting two different approaches. One,
which has been presented by Russell Hardin, strives to keep the concept within the
rationalistic instrumental paradigm (Hardin 1998). This means, A will trust B, if A believes
that B’s incentive structure is such that it is in B’s interest to fulfill A’s expectations in a
particular exchange. According to Hardin, we do not trust people generally, but only in
specific exchanges.
The question is if such a narrow definition captures the essence of trust. For example,
as soon as B’s incentive structure changes, she will betray A if her utility increases by doing
so. If so, this puts a heavy burden on A, because in order to deal with B, he needs to know B’s
incentive structure very well, and also be aware of sudden changes in that incentive structure.
The amount of information A needs in each an every moment, when A must decide whether
of not to trust B, must be very high. While this definition is very precise, and has the
advantage of simplicity, I doubt if it can capture trust between agents as it takes place in the
real world. Do agents really make such complex calculations each an every time they decide
whether or not to trust? Probably not, and in any case, the time and resources they would need
to gather that type and amount of information about B, would make trust very rare (i.e., the
transaction costs would prevent a lot of cooperative exchanges).
For example, even in New York, in the middle of the night, people jump into a taxi,
driven by a person they know nothing about. Furthermore, if according to Hardin, A will trust
B as long as A assesses that it is in B’s self-interest to act as to be trusted, then trust would be
very infrequent because B would only pretend to be trustworthy but choose to “free-ride” on
A’s trust as soon as it pays to do so. If strictly an “homo economicus, this B personality would
try to mimic trustworthiness until A decides to trust him with something really important or
valuable, and then (s)he’d deceive A. In such a word, trust would be very infrequent. It can
also be argued that such an instrumental model of social ties leads to more fundamental
problems. Granovetter has e.g., argued that “a perception of others that one’s interest in them
is mainly a matter of ‘investment’ will make this investment less likely to pay off; we are all
on the lockout for those who only want to use us” (Granovetter 1988: 115).
Definitions must not only be precise, elegant and simple (as is Hardin’s), they must
capture the essence of what we want to communicate when we use a specific term. As Robert
Wuthnow concluded from his thorough empirical research about trust based on survey data:
“For most people, trust is not simply a matter of making rational calculations about the
possibility of benefiting by cooperating with someone else. Social scientist who reduce the
study of trust to questions about rational choice, and who argue that it has nothing to do with
moral discourse, miss that point” (Wuthnow 1998). The result from experimental research
also seem to show that the calculative notion of trust does not conform to empirical findings
(Rapoport 1987, Tyler and Degoey 1996). Recent overviews of the field states that
experimental research simply refutes the standard behavioral assumptions of game theory
(Ledyard 1995, Sally 1995). Psychological research shows that trust is linked with norms
against opportunism such as lying, cheating and stealing (Rotter 1980). From the perspective
of contract law, Deakin and Wilkinson have argued trust between economic actors “cannot be
merely calculative. This is because the complexity of the environment is such that complete
contracting over future contingencies is impossible” (Deakin and Wilkinson 1998: 154). From
this, I draw the same conclusion as Elinor Ostrom: At the end of the day, there must be limits
to how unrealistic assumptions social scientists can work from and still pretend to have
something important to say about real world problems (Ostrom 1998).
Furthermore, Hardin’s definition seems to be difficult to use in order to understand
why the willingness to trust other individuals (and societal institutions) varies so markedly in
different societies. Survey and other types of data seem to indicate that there are different
“cultures of trust” around the world. When it comes to who and what you can trust, what is
taken for granted in some societies is highly dubious in others (Sztompka 1998). This would
indicate that in societies with a “low” culture of trust, the rationalistic definition would be
suitable, while in societies with a “high” culture of trust, in most cases people use other things
than rationalistic calculation. The conclusion is that we need a more open definition of trust,
for example the one suggested by Piotr Sztompka: “trust is a bet on the future contingent
actions of others” (Sztompka 1998, p 20). The question to answer is then how people arrive at
such bets. They can use rationalistic calculation, but as I will argue below, in most cases,
people use something else.
As should be clear by know, I agree with Elinor Ostrom’s argument that political
science is in desperate need of a more realistic behavioral theory of human agency than the
pure rationalistic instrumental homo economicus. How bad is the present state of affairs?
Using results from psychological research, Eckel and Wilson have stated that “it might be
argued that the rational agents in standard game theoretic models are autistic: that is, they
only require an actor to assume the other is seeking the same advantage as himself” (Eckel
and Wilson 1999). They refer to psychological experiments with small children which show
that they can usually detect signals from other persons and make inferences about their
intentions. However, children suffering from autism have difficulties doing this, and usually
can not detect intentions other than their own which complicates their ability in social
exchanges (cf. Baron-Cohen 1995). This argument may sound a bit harsh with respect to
game theory, yet the argument is very compelling. As economists Ben-Ner and Putterman
have recently argued:
being, by assumption, bereft of concern for friend and foe as well as for right or wrong,
and caring only about his own well-being, homo economicus cannot, by construction,
be at the center of a meaningful theory of how and when behavior is influenced by
ethics, values, concern for others, and other preferences that depart from those of
standard economic models. (Ben-Ner and Putterman 1998).
Thus, there are two problems that need to be solved. One is how to incorporate norms into our
models of human behavior. The other, is how to build our models from a somewhat more
realistic assumption about the agents’ capability to handle and process information and act
consistently upon this information. The first problem can be handled by thinking of agents as
having “dual” utility functions in social dilemma situations. That is, they want to “do the right
thing”, that is, abstain from opportunistic behavior, but they do not want to be the “only ones”
who are virtuous, because there is usually no point in being the only one who is virtuous. As a
result of the information that others will only act according to their “myopic” self interest,
they are likely to do the same (i.e., “autistic” action). But, if agents have information that “the
others” have a normative orientation (or some other reason) that makes it likely that they will
cooperate for the common good, the norm-based utility function will usually “kick in” (Levi
1991). Agents can get information about this from their social interaction with others, from
the media, or from government institutions (Levi 1988). Be that as it may, what is needed to
solve social dilemmas of the kind discussed above are agents who can play more than one
instrument. That is, they can be motivated by self-interested when they act in market
relations, but when elected or appointed to a public position, they recognize that they are in a
different situation and obey the laws rather than ask for bribes (Ben-Ner and Putterman 1998:
5). If the “public choice” approach would be correct when that agents in public office can be
expect to behave according to the same instrumental rationality as agents on the market, there
is no possible solution to social dilemmas of the kind discussed here (Rothstein 1996).
In regard to the problem of using a more realistic approach about human behavior than
the “autistic” standard model, I think that Peyton Young’s approach on modeling agency in
evolutionary game theory may be very promising. His conception of how we should
understand human agency is that:
agents are not perfectly rational and fully informed about the world in which they live.
They base their decisions on fragmentary information, they have incomplete models of
the process they are engaged in, and they may not be especially forward looking. Still,
they are not completely irrational: they adjust to their behavior based on what they think
other agents are going to do, and these expectations are generated endogenously by
information about what other agents have done in the past (Young 1998: 6)
There are several advantages with this view of agents compared to the standard rationalistic
model. Most important is the realistic view of what type of (limited) information agents have,
the importance agents give to history (i.e., experience) when judging other agents, and that
what they finally do, is based on what they think “other agents are going to do”. A reasonable
interpretation of the results from experimental studies and field studies about behavior in
social dilemma situations, is that it is very likely agents do not only take into consideration
the incentive structure of the “other agents”. On the contrary, they are likely to take into
account what is known about the moral standard, professional norms, and historical record of
these “other agents”. For example, do civil servants take bribes or not, do professors usually
discriminate people of different race or gender or not, do judges the follow or violate legal
rules, do union leaders honor agreements, or not, etc. In other words, agents take into account
what they think is the “logic of appropriatedness” of the other actors (March and Olsen 1989).
The question then, is where does this view of “the others” come from? In small groups
it can of course come from personal knowledge and communication. Experimental research
gives strong support for the importance of communication as a way of increasing cooperation
in social dilemmas (Sally 1995). But, in large n settings, the problem is very different. No
agent can have knowledge about all the other agents or groups of agents. Who are the judges,
the tax-collectors, the policemen, the politicians, the civil servants, the social welfare workers,
the other tax payers, the welfare clients, the unions, etc? What sort of people are they? What
is known about their trustworthiness and their moral standards? Can these people be trusted,
and if so, with what can they be trusted? If agents “adjust to their behavior based on what they
think other agents are going to do” (Young 1998: 6), these are the type of questions agents,
who think about whether to trust or not, must try to answer. The stakes, if trust is misplaced,
can be very high. As Braithwaite has stated “(t)he key to linking value systems and trust
norms lies in the way in which ‘the other’ is construed” (Braithwaite 1998: 45). If this is so,
we need a theory of how “others” are constructed.
Where does Social Trust Come From?
The most important lessons so far are is that a) information is a problem and b) agents are
likely to act based on what information they have about “the others.” In certain economic
setting, such as a spot market, information is free, general, accurate and immediately
available. No agent can hide what he or she is willing to pay or to sell for from other agents.
In politics, things are usually very different. Information is not free, almost never generally
available and seldom accurate. Yet, agents have to act on whatever information they possess
(Mailath 1998). This information problem creates a demand for agents that are “information
entrepreneurs”. This is usually political leaders or intellectuals who engage in producing or
reproducing ideas and system of ideas (i.e., ideology). What they do, to a large extent, is to
produce ideas about whom and what can be trusted. In a potential social dilemma situation,
what are the actors’ interests can not be taken for granted, because it depends on what ideas
they think other actors have.
In her work about the importance of ideas in major policy choices made by different
European Social Democratic parties in the inter-war period, Berman argues that “actors with
different ideas will make different decisions, even when placed in similar environment”
(Berman 1998: 33). From a rationalistic perspective, the argument is similar: “ideas matter
because they affect how individuals interpret their world via the likelihood they accord
different possibilities” ( cf. Scharpf 1997: 60, Bates, de Figueiredo Jr et al. 1998).
If so, the solution to our problem must be found in who controls what information (or
ideas) agents will use when deciding how to act (Berman 1998, ch. 2). The problems are, 1)
where does ideas come from and, 2) what or who determines which ideas that will dominate
most agents. As Mailath puts it in his discussion about the realism in the approach known as
evolutionary game theory: “(t)he consistency in Nash equilibrium seems to require that
players know what the other players are doing. But where does this knowledge come from?”
(Mailath 1998). One answer, of course, is that this is given by the “Culture”, or the
“Dominant Ideology”, or “History”. It is in the American political culture to “hate the
government”, while Scandinavians, for example, put enormous trust in their political system
and gladly pay more than half of their income in taxes (Rothstein 1998). Russians have of
course very good reasons to be distrustful of their government institutions, as do most citizens
of Latin Europe and Latin America. According to Robert Putnam (Putnam 1993), the reason
Northern Italians trust each other can be traced back to political traditions established in the
medieval city states, while southern Italians have much less social capital, because no such
“horizontal” political culture ever got started5.
The problems with all these explanations are well-known. First, they reduce the agents
to, more or less, cultural or structural “dopes” (Giddens 1984). Instead of being able to chose,
they have no choice at all, and instead of having perfect information, they are “doped” by the
culture (or history, or ideology) in which they, by no choice of their own, happen to live in.
Second, cultural explanations have difficulties in getting at our main problem, namely how to
explain change. If the culture is strong, then change in values is less likely. But if the culture
I admit that this is a very unfair caricature of Robert Putnam’s sophisticated argument, but think of it as
an “ideal-type” instead, that usually makes things easier for social scientists.
5
is weak, change is possible but then other things than culture come into play (Laitin 1988).
This is the difficulty, in order to explain why social dilemmas can sometimes be
solved, rationalistic theories must be completed with theories about how the agents come to
embrace norms, ideas, or culture that make them refrain from self-defeating myopic
instrumental behavior (Denzau and North 1994). But this must not lead us into the other
extreme, i.e., viewing agents as determined by a cultural hegemony produced by anonymous
historical or political forces (cf. Lichbach 1997). The whole notion of “social dilemmas”
serves to remind us that groups do not always have the norms that would be most functional
for theirs needs or interests. On the contrary, the rationalistic approach’s focus on the
discrepancy between individual and collective rationality, implies that we should usually
expect the opposite to be the case. Norms or culture should thus not be seen as something
inherited and stable beyond strategic action. Instead, as Bates et. al have argued, “the struggle
over subjective worldviews should itself be treated as a strategic process” (Bates, de
Figueiredo Jr et al. 1998).
This is where real-world politics kicks in, for the simple reason that it is very much a
struggle over which “subjective worldviews” that shall dominate in a certain group (cf.
Hardin 1995). Recent work by, for example, Berman and McNamara about the importance of
dominant ideas in major policy choices, point in the right direction, because which ideas that
will dominate are fought about by strategically acting political agents (Berman 1998,
McNamara 1998). What political leaders do, is very much trying to communicate notions of
who are “the others”, and most especially, if these “others” can be trusted (Bates, de
Figueiredo Jr et al. 1998). “Others” can be ethnic groups or nations (the Serbs, the Croatians,
the Tutsis), professional groups, “the bureaucrats in Washington”, “the unions”, “the
employers”, and so on. And within this strategic approach, when providing answers to the
type of questions above, political leaders are at the same time providing an answer to the
question of the identity of the group they represent: the “who are we” question (Hall 1993,
Ringmar 1996).
In the more empirically oriented research, there are basically two arguments about
how trust between citizens is produced. The first one comes from Robert Putnam’s already
classic study about variations in democratic efficiency between the Italian regions. The main
thrust of his argument is that “what makes democracy work” is trust, or social capital, and this
is produced if citizens engage in horizontal voluntary organizations such as choral societies,
PTAs and charities. In this Tocquevillian notion of the social order, it is a vibrant civil society
where citizens’ engage in local grass root organizations, that they learn the noble art
overcoming social dilemmas. At the aggregate level, Putnam is able to show very impressive
correlations between the density of the world of voluntary organizations and democratic
efficiency (Putnam 1993). There is also an argument that countries which historically have
had strong popular grass-root organizations, such as the Scandinavian countries and the
Netherlands, score high on the survey question used in the World Value studies to measure
generalized trust (Inglehart 1997).
At the micro-level, however, things look quite different. While there seem to be
empirical support for the thesis that the more organizations people are members of, the more
likely are they to trust other citizens, it is difficult to get a grip at how the causal relations
works. Is it agents who already trust other citizens who join many organizations, or is it the
activity in the organizations that increases trust? Recent work by Dietlind Stolle seems to
confirm the former thesis more than the latter. From her very interesting micro-level data, she
concludes that “(p)eople who join associations are significantly more trusting than people
who do not join”, and “(i)t is not true that the longer and the more one associates, the greater
one’s generalized trust” (Stolle 1998: 521).
The other major argument about trust among citizens is that it can also be created
“from above”. Political and legal institutions that are perceived as fair, just and (reasonably)
efficient, increase the likelihood that citizens will overcome social dilemmas (Brehm and
Rahn 1997, Levi 1998, Newton 1999). If our friend, the Russian tax official, could make
Russians believe that his tax bureaucrats would be honest and that they would have means to
make sure that (almost) all other citizens paid their taxes, most Russians would pay there
taxes. Several such instances of creating “trust from above” in tax policy have been analyzed,
for example Levi on Australia in 1980s and Rosemary Thorp on Peru in the 1990s (Levi
1988, Thorp 1996). It should be added that although Putnam’s analysis by most commentators
has been connected to the organic Tocquevillian understanding of trust, there are important
parts of his book that take this more institutionalized causal relation into consideration. Be
that as it may, Swedish survey data seem to give some support to this “statist” argument about
how trust is created.
People were asked whether they had very high, high, middle, low or very low
trust/confidence in different political and societal institutions such as the banks, Parliament,
the unions, the police, the courts, etc. (see table below). The measure on this five-scale
question of trust in institutions was then correlated with a ten-scale question asking people:
“in general, do you think you can trust other people”. The question we wanted to get at was
whether there is any correlation between horizontal trust (i.e., trust in other people) and
vertical trust (i.e., trust in political and societal institutions). Table 1 below shows correlations
between these two types of trust:
Table 1. Correlation Between Horizontal and Vertical Trust
TYPE OF
INSTITUTION
Police
Courts
Public Health Care
Parliament
Government
Local Government
Royal House
Public Schools
Church of Sweden
Unions
Banks
Major Companies
Armed Forces
PEARSON’S r
0.18
0.18
0.16
0.15
0.13
0.13
0.10
0.10
0.10
0.08
0.08
0.08
0.08
Source: SOM 1996 survey. N= 17076
Even though all of these correlations are weak, they all point in the same positive direction
The more people trust other people, the more they tend to have confidence in the societal and
political institutions. But again, the difficulty is to understand in what direction the causal ling
goes. One noteworthy result here is that the two strongest correlations in the table above are
the ones between horizontal trust and trust in the institutions of law and order, that is, the
courts and the police. At a first glance, there seems to be no reason why there should be a
causal mechanism between trusting other people and trusting these two particular institutions.
On the contrary, you could argue that if you trust other people, you don’t need the services
provided by these two institutions.
One possibility on how to understand this is that the causal link runs the other way
around; the more you trust the institutions that are supposed to keep law and order, the more
reason you have to trust other people. The argument, inspired from non-cooperative game
theory, runs as follows. In a civilized society, institutions of law and order have one
particularly important task: to detect and punish people who are “traitors”, that is, those who
break contracts, steal, murder and do other such non-cooperative things and therefore should
not be trusted. Thus, if you think (i.e., if your cognitive map is) that these particular
institutions do what they are supposed to do in a fair and effective manner, then you also have
reason to believe that the chance people have of getting away with such treacherous behavior 7
is small. If so, you will believe that people will have very good reason to refrain from acting
in a treacherous manner, and you will therefore believe that “most people can be trusted.”
Psychological and survey research confirms that social trust acts as a constraint on immoral
6
Confidence in institutions was measured on a 1-5 scale, and trust in other people was measured on a 010 scale. The SOM surveys are conducted yearly by the SOM Institute at Göteborg University. The Institute is
jointly managed by the Department for Journalism and Mass Media, the Department of Political Science and the
School of Public Administration. The data are from mailed questionnaires to 2.800 randomly selected
individuals between the ages of 15 and 80 (see Holmberg and Weibull 1997)
7
Game theorists usually use the term “opportunistic behavior”, which I think is a much too nice term to
describe what this is all about.
behavior. People who believe others are trustworthy, are themselves less likely to lie, cheat, or
steal (Rotter 1980, Laurin 1986).
If the above reasoning is correct, then trust in other people may have more to do with
the way in which the political institutions of this type are operating. If people believe that the
institutions that are responsible for handling “treacherous” behavior act in fair, just and
effective manner, and if they also believe that other people think the same of these
institutions, then they will also trust other people. However, it should be added that it is
probably not the formal institution as such that people evaluate, but its historically established
reputation in regard to fairness and efficiency. What matter is the collective memory about the
actual operations of the institutions. The wordings of Joseph Stalin’s extremely democratic
constitution from 1936 did probably not increase trust in the Soviet society. Again, it is the
“history of play” more than the formally enacted rules of the institutions that matter.
Trust as Collective Memory: A Research Program
While there are now several good analyses regarding the importance of ideas in politics, there
are fewer that are useful on the production of ideas and ideologies, and especially, why some
ideas come to dominate over others (Berman and McNamara 1999). Many theories on this
topic are unfortunately not very helpful because of their strong functionalist tendency.
Whichever ideology or norm is “needed” to secure the established configuration of power in
society is also “produced” because there is such a “need”. The critique of such functionalist
logic in the social sciences for its lack of microfoundations is well known and doesn’t need to
be repeated here (Elster 1983, Hedström and Swedberg 1998). But as argued above, there
seem to be a risk that when economists and rationalistic scholars in political science approach
questions about norms, culture and ideas, they fall into a functionalist trap, taken these
phenomena as just givens. But we can not accept that if what we want to explain is not
captured by instrumental rational agency, it’s must be beyond explanation, or just a subjective
interpretation, as good as any, of a given culture. To take the argument about the rule of law
given by Weingast (see above), we need to know why the U.S. constitution had become such
a sacred thing even among his followers that he could not, or dared not, tamper with it even
though they would “increase their pay-offs” by doing so. Surely, this is not the case with all
constitutions in democratic societies. In a very similar situation in the 1930s, concerning
increasing government support to agriculture, the Swedish government could tamper with the
constitution without hardly any opposition (Rothstein 1992). Although what they did was
definitely unconstitutional, almost none thought it illegitimate.
Thus, we need a theory about what culture, norms or ideas that prevail in the “mental
maps” of the relevant actors that does not fall into the functionalist or teleological trap. An
approach, which I have found very helpful, is the literature on collective memory. Compared
with many other approaches to the study of the impact of ideology, culture and history, it has
the advantage of viewing the creation of ideas and social norms as a strategic political
process. This research tradition, established in the late 1940s by the French sociologist
Maurice Halbwachs, argues that collective memories are not something given by “history”, or
created because the present society “needs” a specific social construction of the past
(Schwartz 1991, Coser 1992). Instead, what is emphasized in this literature is that “collective
memories” are deliberately created by strategically acting political entrepreneurs in order to
further their political goals and ambitions.8 In other words, a group’s or a society’s collective
memory is contested ideological terrain, where different actors try to establish their particular
interpretation of the past as the collective memory for a particular group.
An excellent recent study in this tradition is Nachman Ben-Yehuda’s book on the
8
I’m grateful to Fredrick C. Harris, for pointing me to this literature.
creation of “The Masada Myth” in Israeli politics. Ben-Yehuda shows convincingly that “The
Masada Myth” is a “fabricated moralistic claim” that was produced in the 1940s to spur
national pride among young Israelis, in particular. The myth was established by “the central
Israeli regime, as well as by key political, social, military, and academic figures” (BenYehuda 1995: 30). Ben-Yehuda’s analysis shows that the collective memory (Jews in ancient
times fighting heroically against much stronger Roman forces and, when defeat could not be
avoided, chose a honorable death instead of loss of freedom and slavery) is according to
generally available historical sources a genuinely false story.9 This is not the place to
recapitulate Ben-Yehuda’s very interesting analysis, but it will serve as an argument for the
importance of using the concept of “collective memory” to solve the problem of how to
explain the theoretical puzzle laid out previously. A fine summary of the role played by
“collective memory” in politics is given in Baker’s analysis of pre-revolutionary France:
Politics in any society depends upon the existence of cultural representations that define
the relationships among political actors, thereby allowing individuals and groups to
press claims upon one another and upon the whole. Such claims can be made intelligible
and binding only to the extent that political actors deploy symbolic resources held in
common by members of the political society, thereby refining and redefining the
implications of these resources for the changing purposes of political practice. Political
contestation therefore takes the form of competing efforts to mobilize and control the
possibilities of political and social discourse, efforts through which that discourse is
extended, recast, and - on occasion - even radically transformed (Baker 1985).
The purpose of trying to combine the analysis of (large n) social dilemmas/collective action
problems, with the analysis of collective memory, is to offer an explanation for when there is
a change from sup-optimal to optimal equilibria (or vice versa), that is, when collaboration for
mutual benefit is possible. Thus, what does it take for a society to move from “Palermo” to
“Milan”, or from “Moscow” to “Stockholm”? The hypothesis is that what is needed is a
change of the collective memory concerning three questions. 1) who are we, 2) who are the
others, 3) and what can these others be expected to do if we choose to trust them. Within
rationalistic theory, Bates et. al. have argued that different forms of cultural or interpretavist
theory would serve to fill this function because “(p)olitical transitions seem to defy rational
forms of analysis”. I agree in part when they argue that “(g)ame theorist often fail to
acknowledge that their approach requires a complete political anthropology”. My argument is
that the theory of collective memory is superior to their use of cultural theory, because ideas,
norms and culture are not taken just “shaped by history”. Instead, these are themselves to be
seen as part of strategic political action, albeit on a different societal level (Bates, de
Figueiredo Jr et al. 1998, pp. 222-244). When they argue that the problem with existing
theories of the role of ideas is that they do not explain why one idea gains prominence over
others, my argument is that the collective memory approach can help us explain this crucial
point.
Such a research program may serve to avoid the often sterile discussion in political
science about the relevance of rational choice versus more historical explanations. As KarlDieter Opp recently has argued, both the “narrow” and the “broad” conceptions of rational
choice theory are in need of empirical evidence about how preference formation actually
occurs (Opp 1999). For the historical-institutionalist approach, such a research program
Another very good analysis of collective memory is Yael Zerubavel’s Recovered Roots: Collective
Memory and the Making of Israeli National Tradition (University of Chicago Press 1995). It may come as no
surprise that in a newly established nation state like Israel, the demand for a common “collective memory” has
been particularly high, and therefor also more easy to analyze for social scientists.
9
would serve two solve two crucial questions. One is to point at which type of institutions and
institutional change that are interesting to study (i.e., the ones that create or solve social
dilemmas). Secondly, what more precisely it is in the myriad of historical events that the
analysis should focus on (i.e, the strategic construction of collective memories about political
institutions). Thus, from game theory, we take the general law-like nature of the theory of
social dilemmas/collective action, which points us to expect a stable but suboptimal
equilibria. From historical institutionalism, we argue that the existing variation in the ability
for groups to handle social dilemmas, can be found in the variation of the collective memories
of the agents.
Efforts to find a general law-like explanation for the variation in groups’ ability to
solve social dilemmas, for example through experiments, evolutionary psychology or ever
more refined formal mathematical work in game-theory, are likely to fail. The reason is
simple: if we were able to find such a true law of human nature, we could still not explain
what is most interesting, namely the enormous variation in groups or societies ability to find
solution to social dilemmas (North 1998, Ostrom 1998). My argument is that research in the
historical strategic construction of collective memories is a promising strategy because it can
lead us to ask questions about under what conditions different cognitive maps can come to
dominate in different societies and thereby give rise to different “cultures of trust” (Sztompka
1998).
Collective memories are always historical constructions, but can not merely be
constructed by political agents. Our understanding of “our” history is neither given, nor (a
some postmodernist would have it) just a “construction” (Booth 1999). Using historical
explanations in political science, the most common problem is to take the outcome as given
and then only look for variables that led to this particular outcome (Katznelson 1997). If the
development is path-dependent, we just follow the path backwards and the explanation
becomes more convincing the longer we are able to trace the path. This often gives historical
explanations a structuralist and deterministic bias, what happened simply had to happen
(Thelen 1999). The insight from game theory about the possibilities for “multiple equilibria”
(the so called “folk theorem”), should serve as a warning flag against such an understanding
of the role historical explanations should play. If history is path dependent, this should be
understood as an institutional explanation, meaning that when an institution, for whatever
reason, has been established, it can create a feed-back mechanism which serve to reinforce
behavior along a certain historical path (Pierson 1998).
This feed-back mechanism can of course be a certain selective incentive that
changes what the agents view as a rational or reasonable behavior, which in its turn, at the
aggregate level, reinforces the strength of that very institution (Rothstein 1992). But this feedback mechanism can also be a certain collective memory, the very “belief system” that
Douglas North recently argued is the underlying determinant of the establishment and
evolution of institutions (North 1998: 494). Tentatively, this may work as follows: At time t1,
a specific notion of “who are the others,” is successfully established by political leaders (this
“others” can very well be a political institution). This creates a certain type of behavior among
the masses, which at t2 serves as to reinforce their political strength of the political leaders so
that they can, with even more resources, work to strengthen that particular collective memory
at t3. Thus, in order to explain a particular outcome of a social dilemma, we should therefor
not take the collective memory as something given by “nature” or “culture”. Instead, we
should look for the particular moments in history when political leaders actively and
strategically seek to change the collective memory.
In order to solve a social dilemma, it is necessary for the agents have accurate
information about “the others”, if they will betray trust, or if they will be trustworthy. My
argument, which is inspired by the literature about collective memory, is that the answer to
these questions is not something given by “culture” or “history” in any historically
determined or functionalist way. Instead, this is a field for strategic action by political leaders,
they fight over what is to be our collective memory of ourselves and of “the others”. One
advantage with this approach compared to game theory and historical theories about path
dependency, is that political power and power resources come into play. Central questions in
such a research program at the macro level would be: Which social agents have the resources
to make an impact on the collective memory? What mechanisms are used to influence the
collective memory. What role does collective memory play when groups move from conflict
to cooperation (e.g., ending civil wars or industrial disputes). A particularly interesting
question is of course how much of a groups collective memory can be “constructed” by
political leaders. At the micro level, questions about how individuals “mental maps” are
informed by “history of play” are of course important, as is the question under what
circumstances individuals are influenced by centrally placed agents attempt to change their
understanding of history, especially (as stated in evolutionary game theory), the “information
about what other agents have done in the past” (Young 1998: 6).
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