Shrinking Trust in Growing China: A Trade-Off Between Fast Growth, Change and Institutionalized Cooperation?

Abstract

Emergence and growth, or deterioration, of general trust, endogenously depend on socio-economic transformations. This paper attempts to explain a shrinking general trust in China, against the background of its ‘reform-opening up’ phase, by means of repeated prisoners’ dilemma games on networks. We find that the more anonymous large-scale interaction arenas for immigrants in the boom regions, where lack of new, more appropriate network structures for them to substitute their lost rural home networks, resulted in higher uncertainty, integration failure, and less trust and cooperation. The general increase of social and geographical distance may have driven China from an ‘acquaintance society’ to a ‘stranger society’ with a lower general trust and institutionalized cooperation. A network model that addresses the interaction ‘deep structure’ of the socio-economy then may provide a potential strategic option for China to recover earlier high general trust.

KEYWORDS:

• Economic transformation
• trust
• social/spatial distance
• games on networks
• network structure
• mobility

JEL CODES:

• D02
• O12
• P27

Notes

1 The WVS data, however, shows an unexpected 10%-points increase in general trust within four years in the 2012-survey wave. This seems to be a singular event, though, and contradicts most of the other research on general trust in China, and the Chinese academic and public discussions. Note that in the Chinese Academic Journals database (CNKI), there are 2059 papers and theses from 1999 to 2017 having ‘trust crisis’ in their titles, of which 1448 were published after 2008. The Chinese General Social Survey (CGSS) also demonstrates a declining general trust from 2010 to 2013, which contradicts with WVS data as well.

2 It is worth noting that trust towards central government, political institutions, and close social connections (i.e. Guanxi) in China does not exhibit such a declining trend, along with the shrinking general trust among strangers. For a detailed explanation, see, e.g. Chen, 2017; Lyu & Li, 2018.

3 Note that we do not refer to the notorious trust game, which is a lab experiment that would measure trust existing in real-world lab agents directly. Real-world people will bring their trust into the lab and thus just an existent outside culture is measured, which however, does not tell us much about why and how trust and trustworthiness emergence.

4 The Chinese government is not a type of predictable and rule-of-law based Weberian bureaucracy, its governance is based on cadre organization and committed to specific policy doctrines and to socio-economic development goals, see Rothstein (2015) for further discussion. Hence, the cadres’ behavior does not always reflect how the government as a whole behaves, and distrusting cadres does not mean distrusting the government.