Truth, trust and market transactions: What do we know?

John Humphrey and Hubert Schmitz have recently made an important contribution to the literature on trust and economic transactions between firms. Unfortunately, the evidence that high levels of societal trust contribute significantly to economic growth is far less reliable than they suggest. We need more research — but research informed by greater conceptual clarity about trust and the institutional arrangements that contribute to trust. The framework presented here for conceptualising the various sources of trust should help guide empirical research.