Paper short abstract:

Generalized and particularized trust impact human development, bonding and bridging social capital and crises. To overcome CA research gaps regarding trust, we use a rich CA-related database to empirically estimate drivers and interdependence of particularized and generalized trust for South Indian villages and discuss related effects on social capital, human development, capabilities, and agency.

Paper long abstract:

In the last years, the great importance of interpersonal trust, comprising of generalized and particularized trust, for societies, economies, political systems and human development has been emphasized repeatedly (Algan 2019). Further, generalized and particularized trust are foundations of bridging and bonding social capital (Zheng, Wang, Zhang 2023).

Bonding social capital is shaped by particularized trust inside small networks who know each other personally, e.g. families or castes. Bonding social capital can tie ingroup members together and create ingroup loyalty, but also cause outgroup antagonism. Bridging social capital builds on generalized trust of most people, including strangers. Bridging social capital is essential for social cohesion and cooperation beyond specific groups which are prerequisites for overcoming crises, fostering capabilities, collective agency, human development and economic growth (Algan 2019).

The majority of research on interpersonal trust has focused on OECD countries; less studies analyze developing countries. Methodologically, some non-official surveys have very small sample sizes (e.g. ca. 1,000 per country); often studies take insufficient account of regional differences (Algan 2019, 392-396).

From a CA perspective, Amartya Sen (1999: 263) emphasizes the importance of trust as a prerequisite for any exchange economy. According to Sen (1999: 266-267), trust is particularly decisive in developing countries, where a high proportion of informal transactions and weak law enforcement prevail. At an individual micro level, trust is essential for any capability and agency that humans cannot achieve in complete social isolation.

Given the great importance of interpersonal trust for social, economic and political issues from a CA perspective, it is surprising to find hardly any CA research on interpersonal trust. Exceptions include research on "relational capabilities" by Giraud et al. (2013). However, they do not analyze specific determinants and effects of trust in a capability framework. Recently, drivers of generalized trust for capabilities and agency have been investigated by Strotmann and Volkert (2023). They find that generalized trust correlates with various dimensions of human well-being and agency. However, that study does not consider particularized trust as a major part of interpersonal trust and bonding social capital.

To close these mentioned research gaps, the aims of the paper are:

1. To empirically analyze potential CA-related drivers of particularized trust in the regional context of rural India and to compare the findings with the potential drivers of generalized trust. The analyses are based on a large representative regional CA database for human development of individual villagers, households, and communities.

2. To empirically assess the interplay of particularized and generalized trust, e.g. how persons with a certain degree of particularized trust have or have not developed generalized trust (Zheng, Wang, Zhang 2023) and in which respects these persons might differ from each other.

3. To discuss the consequences of these empirical findings for trust and social capital from a CA perspective.

To achieve these goals, we sketch essential conceptual foundations of interpersonal trust and social capital and introduce the capability approach as a theoretical framework for subsequent analyses. We further provide a brief overview of existing empirical evidence on drivers of generalized and particularized trust. Beyond OECD results, we focus on developing countries like India (e.g. Hilger and Nordmann 2020; Sengupta and Sarkar 2012).

For the empirical assessment of potential drivers of particularized trust (Algan 2019: 386), we refer to the answers of the villagers to questions on the extent of trust respondents have in their family members, in members of their caste in their village, and in members of other castes in the village (measured on a 4-digit scale). For generalized trust we refer to the question: “Generally speaking: would you say that most people can be trusted or that you need to be very careful in dealing with people?” Thereby, villagers can either answer "Most people can be trusted" or "Need to be very careful".

In our empirical analyses we will firstly analyze CA-related potential drivers of the degree of particularized interpersonal trust. For this purpose, multivariate discrete choice models will be estimated and the findings compared with corresponding outcomes for potential determinants of generalized interpersonal trust. Additionally, we will examine whether or not a higher degree of particularized trust correlates with a higher degree of generalized trust. Moreover, we will use multinomial logit estimation to analyze differences in the characteristics of groups of villagers who differ in their respective degrees of particularized and generalized trust.

Building on these empirical findings on drivers of generalized and particularized trust, we elaborate their implications for human capabilities and agency from a CA perspective, e. g. in times of crises. Finally, we discuss the potentials of research on interpersonal trust for further developing the CA, analyze limitations of our study and identify further research need.

Literature

Algan, Y. 2019. Trust and Social Capital, in: J. Stiglitz, J.-P. Fitoussi, and M. Durand (ed.). For good measure. An agenda for moving beyond GDP, OECD, New York: The New Press

Giraud, G. ; Renouard, C. ; L’Huillier, H. ; de La Martinière, R. ; Sutter, C. 2013. Relational Capability. A Multidimensional Approach, Research Center, ESSEC Working Paper 1306, Paris.

Hilger, A.; Nordmann, C. J. 2020. The determinants of trust. Evidence from rural South India, IZA discussion paper No. 13150, April, IZA – Institute of Labor Economics, Bonn.

Sen, A. 1999. Development as Freedom. New York: Knopf.

Sengupta, J.; Sarkar, D. 2012: Caste and religious diversity on formation of social capital. A field study in India and measurement issues, Diversity and Inclusion: An International Journal, 31(2), 158-175.

Strotmann, H.; Volkert, J. 2023. Interpersonal trust from a Capability Approach perspective: A theoretical and empirical analysis, paper presented at the HDCA Conference 2023, September 11-13, Sofia, Bulgaria, forthcoming.

Zheng, J.; Wang, T. Y.; Zhang, T. 2023. The extension of particularized to generalized trust: the moderating role of long-term versus short-term orientation, Social Indicators Research 166: 269-298.