The Global Crisis In Trust

Trust is the cornerstone of any successful, functioning society. Without it, corruption, apathy, and exploitation reign; institutions across both the public and private sectors become ineffectual, as people have difficulty working together or relying on one another’s expertise or knowledge.Unfortunately, the results of the 2015 Edelman Trust Barometer suggest that a lack of trust — and the subsequent consequences of it — will become one of the most pressing issues of the 21st century.

Half the countries surveyed were classified as “distruster”, in which the overall level of trust among informed members of the public is below 50 percent. This distrust is directed towards all institutions in society — government, business, news media, and even non-government organizations (such as think tanks, charities, civil society groups, etc.)

Many of the countries with a high rate of distrust include stable and robust democracies such as Ireland, Japan, Sweden, Spain, and the U.K. Unsurprisingly, each of these countries is facing some sort of national crisis or other, ranging from pervasive economic stagnation to difficulty responding to the migrant crisis.

Other developed and free societies such as the Australia, Canada, France, Germany, and the U.S. were “neutral” — that is, with roughly equal numbers of people trustful and distrustful towards institutions — but still below the global average. These countries are often politically polarized, with citizens split on a range of national issues.

Perhaps most interesting is the minority countries with a high level of public trust, which include autocracies such as the United Arab Emirates and China, semi-democracies like Singapore, new and/or fragile democracies like Indonesia (and arguably India), and highly prosperous countries such as the Netherlands.

These results go to show that trust is a fickle thing, contingent on a range of factors beyond whether a society if free or democratic (which has long been considered the primary prerequisite for building social cohesion and public trust). Some autocracies manage to have a lot of trust directed towards their governments (or more likely their private sector institutions), others do not; some robust democracies continue to earn the trust of citizens, others continue to disappoint (regardless of their success elsewhere).

The Economist offers some additional insights:

First, trust in institutions in the developing world—currently 12 points higher than in the developed world—will decline as economic growth slows and corruption is revealed. Severe drops can be expected in Brazil, China, Indonesia and Mexico. To stop the erosion, developing markets will need to address inequality, poor environmental standards and lax regulation.

Second, CEOs will see the need to take a broader view of their mandate in society beyond short-term gains and new-product launches. In our survey, 81% of respondents believe that business can pursue its self-interest while doing good work for society. For example, Paul Polman’s vision at Unilever (an Edelman client) is to double the size of the business while reducing its environmental footprint and increasing its positive social impact. Recently, the company announced that its most sustainable brands accounted for half its growth in 2014 and grew twice as fast as the rest of the business.

Third, the concern about the pace of innovation, and the motives behind it, will heighten. Technology remains the most trusted industry, but, for the first time this past year, trust in the sector ebbed in most markets. This spring, 87% of consumers polled in a related survey said they would refuse to buy a new product or service due to concerns that included the risks to data and the environment. Expect stronger regulation of sharing-economy companies, including privacy and security mandates, safety provisions and quality control.

Fourth, the mainstream media will see a further decline in their central role as the credible source even as more companies and governments become storytellers, creating their own content for consumers via short, sharable and visual pieces of content. Respondents for the first time rated online search higher than television and newspapers as their first source of credible information. This reflects a more general dispersion of authority in which peer-to-peer communication is trusted over the traditional top-down model. The most credible sources today, respondents say, are an academic, a technical expert, a regular employee and “a person like myself”—all more trusted than CEOs.

Fifth, the hot political issue of 2016 will be equality. In a related study in 12 countries last year, 88% of respondents said they believe government should work to reduce the rich-poor gap and 74% thought that wealthy individuals have too much political influence. This weight of public opinion will translate into a push for higher taxes on the wealthy and the end of exemptions.

In short, just about every institution will need to work hard to earn the trust of the citizens they serve, engage with, or market to. For that matter, humans in general need to do a better job at being honest, cooperative, incorruptible, and more competent — though these are issues as old as humanity itself.

Indeed, the high rate of distrust — even in societies that are otherwise the most peaceful, stable, and prosperous in human history — may say more about the higher standards that people have come to expect from one another (in particular from those in positions of prominence and authority) rather than an actual, absolute decline in trustworthiness; after all, it is not as if our ancestors were any more open, honest, and progressive as we are. The idea that any institution owes something to society at large — whether it is accountability, respecting civil liberties, etc. — is a radical new concept in human history.

Put another way, all this distrust is, oddly enough, a sign of progress, of people now expecting better from the powers that be, and applying recent centuries of progressive thinking to how they ought to be governed and treated.

Such a positive spin aside, cynicism and distrust is undoubtedly a big problem, especially at a time of tremendous challenges — vast global inequality, climate change, stubbornly high rates of poverty and disease, etc.

Government is now the least trusted institution: the gap between trust in government and business is 19 points or higher in countries such as the United States, Mexico, Brazil, South Africa, Malaysia and Italy. Yet over half of those surveyed want more governmental regulation of business, especially in financial services, energy and food. And the corporate world cannot afford to gloat. Even as trust in business has recovered, trust in CEOs has declined by ten points since 2011 to a mere 31% in developed markets; trust in business is at 50%. Non-governmental organisations are also losing trust as they are perceived as ineffective.

In short, trust is at a tipping-point. Having plunged as a result of the global financial crises, trust showed some signs of recovery, but then plummeted again in 2015. For leaders of both government and business, 2016 needs to be a time for actions that achieve both economic growth and a fairer world.

Something tells me this will take some time to remedy, and it is likely to always remain a problem to some degree. But humanity has come a long way since spending millennia being governed by repressive, strictly hierarchical, and highly unequal power dynamics. I for one remain optimistic, though not too sanguine, about how far we can transcend our proneness to corruptibility, venality, and opaqueness. What are your thoughts?

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