Abstract

This chapter starts from recent research results showing that the state, by virtue of its legality, impartiality and accountability, is critical to producing macro-level social trust in society. Such trust, which is a central component in social capital, has been shown to be important for a large number of social outcomes that are usually deemed important such as economic prosperity, tolerance and population health (Zmerli and Newton 2008, Rothstein and Stolle 2008, Herreros 2009). While microlevel trust is seen as a requirement to reduce transaction costs and thus to support economic growth, it is suggested here that macro-level trust is a requirement for the legitimacy of the state and therefore critical to democratic governance (Gilley 2009). In this, institutional trust is the key link between citizens and the state for creating legitimacy (Rose-Ackerman and Kornai 2004). In a recent study based on the World Value Study survey data from 72 countries, Bruce Gilley concludes that that ‘general governance (a composite of the rule of law, control of corruption and government effectiveness) has a large, even overarching importance in global citizen evaluations of states’. According to Gilley, governance factors are more important than democratic rights when citizens express their opinions about the legitimacy of their states (Gilley 2009: ch. 2). Although low levels of trust do not necessarily cripple government – there are plenty of examples of efficient governments despite low levels of institutional trust – they raise transaction costs and complicate the process of governing (Braithwaite and Levi 1998).