Building Trust: Public Policy, Interpersonal Trust, and Economic Development
Want Economic Growth?
raise Interpersonal TRUST.
Strengthening The Rule of Law through freedom is the mechanism. [speech, association, etc.]
Abstract:
Zak & Knack (2001) demonstrate that interpersonal trust substantially impacts economic growth, and that sufficient interpersonal trust is necessary for economic development. To investigate the ability of policy-makers to affect trust levels, this paper builds a formal model characterizing public policies that can raise trust. The model is used to derive optimal funding for trust-raising policies when policy-makers seek to stimulate economic growth. Policies examined include those that increase freedom of association, build civic cultures, enhance contract enforcement, reduce income inequality, and raise educational levels. Testing the model's predictions, we find that only freedom, redistributive transfers, and education efficiently and robustly stimulate prosperity.
They do this by strengthening the rule of law, reducing inequality, and by facilitating interpersonal understanding, all of which raise trust. [my emphasis]
Knack, Stephen and Zak, Paul J., "Building Trust: Public Policy, Interpersonal Trust, and Economic Development" (March 2002). 22 pages, SSRN: Abstract & Paper available at no charge
raise Interpersonal TRUST.
Strengthening The Rule of Law through freedom is the mechanism. [speech, association, etc.]
Abstract:
Zak & Knack (2001) demonstrate that interpersonal trust substantially impacts economic growth, and that sufficient interpersonal trust is necessary for economic development. To investigate the ability of policy-makers to affect trust levels, this paper builds a formal model characterizing public policies that can raise trust. The model is used to derive optimal funding for trust-raising policies when policy-makers seek to stimulate economic growth. Policies examined include those that increase freedom of association, build civic cultures, enhance contract enforcement, reduce income inequality, and raise educational levels. Testing the model's predictions, we find that only freedom, redistributive transfers, and education efficiently and robustly stimulate prosperity.
They do this by strengthening the rule of law, reducing inequality, and by facilitating interpersonal understanding, all of which raise trust. [my emphasis]
Knack, Stephen and Zak, Paul J., "Building Trust: Public Policy, Interpersonal Trust, and Economic Development" (March 2002). 22 pages, SSRN: Abstract & Paper available at no charge
Building Trust -----UPS Stores and Quiznos
Do these franchisors who use the capital of franchisees and build brand strength and profits on the backs of the franchisees have any legal obligations to disclose the lack of viability of the business plans that they are selling to the public----and the churning and discounting of their stores? If Public Policy permits adhesory franchise contracts and ineffective federal and state regulation on behalf of the franchisors, what recourse do franchisees have? If the SBA divulges "risk" information on franchises to the banks and lenders and this information is not required to be disclosed to the buyers of franchises, this is not a matter of conspiracy but a matter of public policy, I assume? If rhe SBA and Fran-Vet will arrange loans to purchase Quiznos and UPS units, etc...and, in reality, these are troubled networks, do the SBA and Fran-Vet have any responsibility to know this. If UPS has only an 8% failure rate with SBA and a much higher failure rate with other loans that are not divulged to franchise prospects under law, do they have to report these other failure rates of loans to build these stores to the government on their tax returns, if they have loaned the money. If this money is loaned from sources other than the SBA or the franchisor, I assume that these transactions are not traceable? Is this correct? How are the statistics in Item 20 of the UFOC verified, or are they verified by anybody? Has the government built trust with the banks and other lenders AND THE FRANCHISORS and left out the franchisees in the interest of Building Trust: Public Policy, Interpersonal Trust, and Economic Development?