By: Ramon Aymerich, Barcelona

April 21, 2005, La Vanguardia (Catalunya, Spain)

The following article is a translation from the Spanish. The original as it appeared in La Vanguardia is also available to download (PDF 484 K).

The British cannot stand the French, the French cannot deal with the British. Germans think that Italians work badly and most think that the German are the best. This is what the topic states. In a global world, without clear rules, trust is the basic requirement of business. And, in the absence of information, trust is built upon stereotypes. In a Europe that seeks to become one market, economists are increasingly interested in knowing how trust between countries is built and how it influences business. Three studies of different sign and focus agree in the following: southern countries, with a catholic culture and more influence of family in social relations are less trusting and are more risk averse.

"Entrepreneurs from the south are worse off when they do business with their colleagues of central and northern Europe," state Fabian Bornhorst and Andrea Ichino, economists of the Centre for Economic Policy Research (CEPR) of London. "Their colleagues in the north discriminate when it is time to close an alliance, but not because of prejudice, but because southern executives are less trusting." The explanation for such mistrust resides, they argue, in the weight that family has in business decisions. "Southern entrepreneurs tend to establish very effective networks in the family environment, but when they leave this network, they risk very little." It is not the first time that families are blamed for failures in the global economy. In 1995, a prominent thinker such as Francis Fukuyama proposed in his Trust book that individuals of northern countries were more likely to cooperate amongst each other, and to establish the basic social links to assure the prosperity of their economies. On the contrary, countries in the south -- Fukuyama studied, specifically, the northern Italian entrepreneurial fabric -- the weight of the family negatively conditioned the take-off of firms.

To reach these conclusions, Bornhorst and Ichino made 110 students of different nationalities take a trust game. The method used by Luigi Guiso and Paola Sapienza, from the universities of Sassari and Northwestern, also published by CEPR, was to use the abundant statistics about trust published by the Eurobarometer and a detailed study by the 3i Cranfield European Enterprise Center about the preferences of executives. "We have verified a close relation between trust between countries and the volume of economic exchange". They also prove that "trust is not only built with objective facts, but also through aspects such as religion, conflict history or genetic similarities." Guiso and Sapienza reveal that Portuguese are the most distrusting Europeans, while the Swedish are the most trusting; the Swiss are those in which other countries deposits the greatest trust, while the Turkish receive the least. The Swedish are the exception to the rule: the surveyed tend to trust their compatriots more to do business. The Swedish do not. They trust more in their neighbors (Norwegians) than in themselves.

The Dutchman Rocco Huang, a World Bank economist, goes further. On March 21, in the annual meeting of the Royal Economic Society, Huang justified the increasing distance between the USA and Europe with the risk aversion of catholic Europe, relative to a protestant Europe that is less risk averse and likely to deal better with uncertainty. In a study with echoes of a classic such as Max Weber -- who related the appearance of capitalism to the rise of the protestant ethic-- Huang has worked on a ranking of industrialized countries and compared it to the religious choices of their societies. Huang's conclusions are that the religious factor determines that Europe lags behind the US in the creation of new firms in the economy. Within the European Union, it justifies that France lags behind the OK or the Nordic countries. "In Europe, people prefer to bet for what they know," argues Huang, who illustrates his thesis with references to the movie my My big fat Greek wedding. One last detail. Huang is a fatalist about the future of Europe: the greater the percentage of elderly people, less space for uncertainty.