Francis Fukuyama reveals the unique importance social capital, and trust in particular, plays in economic relations.
Francis Fukayama, Trust: The Social Virtues and the Creation of Prosperity, New York: Free Press Paperbacks, 1996
by Francis Fukuyama reveals the unique importance social capital, and trust in particular, plays in economic relations.
As Fukuyama shows empirically, trust reduces societal transaction costs. As a result, its absence hinders firms and organizations from expanding beyond familial ties.
In high-trust societies like the United States, Germany, and Japan, large and complex multi-national corporations can develop because trust acts as a lubricant for transactions between unrelated actors.
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