How Trust Shapes the Medical Field: A Sociologist’s Perspective
Foundations
Contributor / Raymond De Vries
Co-Director, Center for Bioethics and Social Sciences in Medicine
Professor, Department of Learning Health Sciences and the Department of Obstetrics and Gynecology
University of Michigan / Bioethics in Sociology
The simple act of walking into your home each day is a profound act of trust in an inconspicuously high-stakes situation. Doing so demonstrates that you trust the architect who designed your home and that the roof won’t come crashing down on you. And, much like historic societies who relied on strong interdependence as a necessary means of survival, modern life still requires a great deal of reliance on others. Though we may not be as community-oriented as societies of the past, our lives still involve high amounts of trust in other people--their competency, their integrity and so forth--regarding each and every aspect of our lives.
Transcript
Trust is central to the work of bioethics. In fact, you might say bioethics is a trust check on medicine and medical research, offering advice on morally fraught issues, giving voice to patients’ moral concerns, and solving bioethical problems.
I’m a sociologist, and my field actually has a pretty unique take on bioethics. We’re less interested in finding out what’s morally right and more interested in what this new way of being moral means.
So, we want to ask, who decides what’s a moral question? Who’s empowered to solve these moral questions? Who gets to say what’s right and what’s wrong?
Bumper: What Makes the Sociological Perspective Unique
Peter Berger identifies three essential features of the sociological perspective.
First of all, sociology is a relativizing discipline; that is, we’re always interested in how ideas and behavior are situated in their social context, in their historical period, in the culture and the society in which they occur.
Secondly, sociology is a debunking discipline; that is, it never accepts the taken-for-granted explanation of the way things are.
Finally, sociology is an unrespectable discipline.
So, rather than looking for explanations of society from the powerful (from leaders, from managers), we look for stories that come from the dispossessed (from followers, from the people who are being managed).
For example, a physician’s view of trust will be much different than a patient’s view of trust
It’s important to get both of those perspectives when you’re trying to understand trust.
Bumper: Questioning the Impact of Industrialization on Trust
Sociological views of trust, then, are naturally skeptical about taken-for-granted explanations of trust. Let me illustrate.
"Sociology as a discipline was born in the 17th, 18th, and 19th centuries, and it was a period marked by rapid social change."
Industrialization, urbanization, secularization, the rise of mass democracy—all these things were changing the way people lived together.
And the early sociologists were interested in finding out how these changes were affecting the way people related to each other.
Now, the easy answer to that question was to see that these rapid changes were diminishing trust and diminishing relationships between people.
"Ferdinant Tönnies looked at these changes and lamented the disappearance of small, close, friendly, trusting societies that he referred to in German as “gemeinschaft” societies, into larger impersonal societies that he referred to as “gessellschaft” societies.
He saw these as threatening the very foundations of trust.
But Emile Durkheim, one of the founders of sociology, challenged this view. He didn’t see these changes as bringing the end of solidarity but the shift from one form of solidarity into another one.
This new form of solidarity, which he called “organic solidarity,” which was based on interdependence of people in a society characterized by division of labor. So, with the division of labor, people had to depend on each other in new ways.
Bumper: Questioning the Role of Trust in Modern Society
Let’s fast-forward about 100 years to the work of Anthony Giddens, a sociologist from the United Kingdom.
Like Durkheim, he challenged taken-for-granted ideas about the sources of trust. For example, many people think citizens in modern society are less trusting than in the good old days when people lived in small communities.
But Giddens points out that every moment of our everyday lives is characterized by trust. Every day, in innumerable ways, we have to exercise trust in our daily lives.
Well, when you go to work, when you live in your home, you are trusting an architect who designed the buildings that you’re living and working in. You’re trusting that these buildings will stay standing, that they’ll provide you with a comfortable and safe place to live.
So, Giddens makes this same point that what might look like impersonal society actually rests on a foundation of trust.
What’s interesting for us is to take a look at how this perspective, how this thinking about trust from a skeptical, contextual point of view, can be applied to looking at the field of bioethics and how trust operates in bioethics.
I’m a sociologist, and my field actually has a pretty unique take on bioethics. We’re less interested in finding out what’s morally right and more interested in what this new way of being moral means.
So, we want to ask, who decides what’s a moral question? Who’s empowered to solve these moral questions? Who gets to say what’s right and what’s wrong?
Bumper: What Makes the Sociological Perspective Unique
Peter Berger identifies three essential features of the sociological perspective.
First of all, sociology is a relativizing discipline; that is, we’re always interested in how ideas and behavior are situated in their social context, in their historical period, in the culture and the society in which they occur.
Secondly, sociology is a debunking discipline; that is, it never accepts the taken-for-granted explanation of the way things are.
Finally, sociology is an unrespectable discipline.
So, rather than looking for explanations of society from the powerful (from leaders, from managers), we look for stories that come from the dispossessed (from followers, from the people who are being managed).
For example, a physician’s view of trust will be much different than a patient’s view of trust
It’s important to get both of those perspectives when you’re trying to understand trust.
Bumper: Questioning the Impact of Industrialization on Trust
Sociological views of trust, then, are naturally skeptical about taken-for-granted explanations of trust. Let me illustrate.
"Sociology as a discipline was born in the 17th, 18th, and 19th centuries, and it was a period marked by rapid social change."
Industrialization, urbanization, secularization, the rise of mass democracy—all these things were changing the way people lived together.
And the early sociologists were interested in finding out how these changes were affecting the way people related to each other.
Now, the easy answer to that question was to see that these rapid changes were diminishing trust and diminishing relationships between people.
"Ferdinant Tönnies looked at these changes and lamented the disappearance of small, close, friendly, trusting societies that he referred to in German as “gemeinschaft” societies, into larger impersonal societies that he referred to as “gessellschaft” societies.
He saw these as threatening the very foundations of trust.
But Emile Durkheim, one of the founders of sociology, challenged this view. He didn’t see these changes as bringing the end of solidarity but the shift from one form of solidarity into another one.
This new form of solidarity, which he called “organic solidarity,” which was based on interdependence of people in a society characterized by division of labor. So, with the division of labor, people had to depend on each other in new ways.
Bumper: Questioning the Role of Trust in Modern Society
Let’s fast-forward about 100 years to the work of Anthony Giddens, a sociologist from the United Kingdom.
Like Durkheim, he challenged taken-for-granted ideas about the sources of trust. For example, many people think citizens in modern society are less trusting than in the good old days when people lived in small communities.
But Giddens points out that every moment of our everyday lives is characterized by trust. Every day, in innumerable ways, we have to exercise trust in our daily lives.
Well, when you go to work, when you live in your home, you are trusting an architect who designed the buildings that you’re living and working in. You’re trusting that these buildings will stay standing, that they’ll provide you with a comfortable and safe place to live.
So, Giddens makes this same point that what might look like impersonal society actually rests on a foundation of trust.
What’s interesting for us is to take a look at how this perspective, how this thinking about trust from a skeptical, contextual point of view, can be applied to looking at the field of bioethics and how trust operates in bioethics.
Related Videos
The Rise of Bioethics in Response to Medical Distrust: Key Findings
Research
Contributor / Raymond De Vries
Raymond De Vries
Bioethics
Institutions and Context,Distrust
Bioethics is particularly interesting for people who want to study trust because it arose when a much-trusted profession, medicine, lost the trust of the public.
Essentially, bioethics is the child of distrust in medicine and medical research.
The erosion of trust in medicine began in the 20th century with frightening medical experiments and frightening new technologies.
Trust in medicine was diminished when the public learned of the horrendous experiments done by the Nazis in World War II but also when they learned about experiments being done in the United States by the public health service.
The most famous of these is the Tuskegee experiment, where poor black men in Alabama who had syphilis were denied treatment for their disease by researchers who wanted to learn about the natural course of syphilis.
But the sources of this distrust in medicine and medical research is not just about the poor conduct of researchers and about new technologies.
To fully understand public distrust, we have to look at the larger picture of medicine in society.
Bumper: Tracing the Erosion of Trust in Medicine
In his book Trusting Doctors, Jonathan Imber points out that physicians in the United States began to lose their authority after World War II when they began to be valued for their technical competence rather than their personal integrity.
Another sociologist Andrew Abbott points out that the changing nature of the physician work force altered the relationships of trust between patients and physicians.
In earlier times, when physicians came from the communities where they worked, trust was automatic. But increasingly, patients are having physicians who come from different parts of the country, from different countries, from different ethnic groups.
And trusting relationships that were assumed when these parties came from the same community now had to be regulated by codes of conduct and by ethics committees.
And finally, it’s important to note that all these changes were occurring in the 1960s and 1970s in a period of great civil unrest, in a period characterized by the civil rights movement, the women’s rights movement, the gay rights movement—all of these movements began to challenge the authority of existing institutions, like religion, like law, like medicine, like family.”
Bumper: Does Bureaucracy Enhance or Undermine Trust?
The result of this increased suspicion of medicine was increased oversight in the form of research ethic committees called “institutional review boards,” or IRBs, in the United States, and clinical ethics committees.
What is gained by this formalization of trust? Looked at from the point of view of sociology, you might say that what this does is simply move trust around.
So, trust that used to exist between a patient and a physician or between a research subject and a researcher has now been shifted to trust that has to exist between a patient or research subject and an ethics committee, and that ethics committee and the researcher.
This bureaucratization of trust is a cause for much debate. On the one hand, there are people who say these committees actually facilitate research.
On the other hand, there is evidence that moving trust in this way actually prompts more devious behavior on the part of researchers as they try to evade the regulations of the research ethics committee.
Some colleagues and I did research looking at self-report of misconduct by researchers, and we discovered a significant number of researchers were willing to admit that they ignore the rules of institutional review boards.
Bumper: Bureaucracy, Trust, and Informed Consent
Perhaps the best example of the formalization of trust in medicine and medical research is the use of informed consent. Informed consent is the process of explaining what will happen to a person in the clinic or in research and then asking for their consent to participate in care or research.
This is an important tool of bioethics, one that is assumed to protect a person’s autonomy—that is, the right to say what happens to your body—but also to promote trust in medicine and medical research. But does it?
There’s an irony here that the use of informed consent can actually promote distrust. How does that happen? Let me give you an example.
Studies have shown that more police on the street creates more fear of crime than it diminishes, because people start to ask, “Why are there so many police around? There must be more crime in my neighborhood.”
Informed consent works in a similar way. When given to a patient or a research subject, the natural response is, “Is there some reason I should distrust you?”
Essentially, bioethics is the child of distrust in medicine and medical research.
The erosion of trust in medicine began in the 20th century with frightening medical experiments and frightening new technologies.
Trust in medicine was diminished when the public learned of the horrendous experiments done by the Nazis in World War II but also when they learned about experiments being done in the United States by the public health service.
The most famous of these is the Tuskegee experiment, where poor black men in Alabama who had syphilis were denied treatment for their disease by researchers who wanted to learn about the natural course of syphilis.
But the sources of this distrust in medicine and medical research is not just about the poor conduct of researchers and about new technologies.
To fully understand public distrust, we have to look at the larger picture of medicine in society.
Bumper: Tracing the Erosion of Trust in Medicine
In his book Trusting Doctors, Jonathan Imber points out that physicians in the United States began to lose their authority after World War II when they began to be valued for their technical competence rather than their personal integrity.
Another sociologist Andrew Abbott points out that the changing nature of the physician work force altered the relationships of trust between patients and physicians.
In earlier times, when physicians came from the communities where they worked, trust was automatic. But increasingly, patients are having physicians who come from different parts of the country, from different countries, from different ethnic groups.
And trusting relationships that were assumed when these parties came from the same community now had to be regulated by codes of conduct and by ethics committees.
And finally, it’s important to note that all these changes were occurring in the 1960s and 1970s in a period of great civil unrest, in a period characterized by the civil rights movement, the women’s rights movement, the gay rights movement—all of these movements began to challenge the authority of existing institutions, like religion, like law, like medicine, like family.”
Bumper: Does Bureaucracy Enhance or Undermine Trust?
The result of this increased suspicion of medicine was increased oversight in the form of research ethic committees called “institutional review boards,” or IRBs, in the United States, and clinical ethics committees.
What is gained by this formalization of trust? Looked at from the point of view of sociology, you might say that what this does is simply move trust around.
So, trust that used to exist between a patient and a physician or between a research subject and a researcher has now been shifted to trust that has to exist between a patient or research subject and an ethics committee, and that ethics committee and the researcher.
This bureaucratization of trust is a cause for much debate. On the one hand, there are people who say these committees actually facilitate research.
On the other hand, there is evidence that moving trust in this way actually prompts more devious behavior on the part of researchers as they try to evade the regulations of the research ethics committee.
Some colleagues and I did research looking at self-report of misconduct by researchers, and we discovered a significant number of researchers were willing to admit that they ignore the rules of institutional review boards.
Bumper: Bureaucracy, Trust, and Informed Consent
Perhaps the best example of the formalization of trust in medicine and medical research is the use of informed consent. Informed consent is the process of explaining what will happen to a person in the clinic or in research and then asking for their consent to participate in care or research.
This is an important tool of bioethics, one that is assumed to protect a person’s autonomy—that is, the right to say what happens to your body—but also to promote trust in medicine and medical research. But does it?
There’s an irony here that the use of informed consent can actually promote distrust. How does that happen? Let me give you an example.
Studies have shown that more police on the street creates more fear of crime than it diminishes, because people start to ask, “Why are there so many police around? There must be more crime in my neighborhood.”
Informed consent works in a similar way. When given to a patient or a research subject, the natural response is, “Is there some reason I should distrust you?”
How Credit Systems Guarantee Trust: Key Findings
Research
Contributor / Bruce Carruthers
Bruce Carruthers
Sociology
Credit,Government,Measurement,Regulation
Trust is an everyday problem. It’s ubiquitous. It’s something that we face all the time, but it’s not always something that we consciously think about.
These kinds of practical rules of thumb really drive the kind of calculative, quick evaluative decisions that cab drivers make every day, thousands of times.
So, credit is a big thing, and trust in credit is an absolutely crucial issue.
Lenders are vulnerable to the borrowers, depending on the size of the loan, and they’re uncertain about whether the borrowers will be willing and able to repay the loan in the future.
And the thing about credit is that modern economies absolutely depend on credit. Credit is the lifeblood of the consumer economy.
There would be no housing market; there would be no market in cars; there would be no sales and durable goods if people weren’t able to borrow money through credit cards, through mortgage loans, through car loans, and so forth to facilitate those purchases.
So, in the issue of credit, sociologists have studied how lenders actually evaluate the trustworthiness of potential borrowers. And this is done by some people in the context of bankers who are looking at customers who want personal loans or who want small-business loans — stuff like that.
And what they found is that the bankers also were concerned deeply about the trustworthiness of the borrowers.
So, they do collect a lot of data. But it turns out that even when you’ve got all the quantitative information you possibly want — you’ve got the credit scores; you’ve got the loan-to-value ratio; you’ve got all that kind of stuff — it still turns out that sometimes the numbers are equivocal.
What are called “relational proxies” become very important. And that’s a situation where the lending officer will kind of ask themselves, “Do I trust this borrower? Do I think that they are of good character? Do I believe that they’re being really sincere when they say that they plan to repay the loan?”
Those studies of credit focus on situations where lenders and borrowers can actually meet face-to-face, or one person can look across the table at another person and decide whether they’re trustworthy.
But we know that credit in modern society has become much bigger than that. It now is mass credit. Millions and even billions of people are obtaining credit, and they’re getting it from folks who have never met them, will never meet them, and will never sit across the table from them.
How is this possible? Well, the answer is, what we have developed to manage the trust problems in mass credit is a giant informational apparatus that provides lots of information about would-be borrowers and their trustworthiness to would-be lenders and doesn’t depend so much on face-to-face interactions and direct contact.
So, the importance of this kind of informational apparatus is really made obvious in studies of how credit card systems, which are very common in the West and which have been around in the U.S. since the 1950s, have migrated to the post-socialist societies of Central and Eastern Europe — places like Russia.
And what happened was, it turns out that to build a credit card system in Russia is very difficult as compared to the United States.
It turned out that a lot of this background information system that we in the West rely on to track people’s credit records, to keep score of whether they bounce checks and whether they fall behind on payments and how good they are and how in debt they are — that apparatus didn’t exist in places like Russia and had to be built from the ground up.
And it’s that apparatus much more than old, face-to-face direct contact between lenders and borrowers that proves to be critical for the development of mass credit in both Russia but also in the United States.
So, in my own research, I’ve been very interested in the emergence, the historical emergence, of this giant informational apparatus that undergirds modern credit cards. But it turns out it undergirds lots of other forms of credit as well: bond ratings, small business credit, and whatnot.
And the big shift that I see — that started in the middle of the 19th century and which continues to this day — is a shift from credit and issues of trust that previously was posed as a matter of character: Is somebody trustworthy? How do I know that someone in their heart is trustworthy and will repay the debts? How am I connected to that person directly?
We shifted from a world in which that was how you dealt with trust to a world in which, now, we don’t worry about whether we know someone, and we don’t worry so much about their character. But we rely very heavily on all kinds of quantitative, standardized information that has been gathered and processed and interpreted by someone.
It’s no longer a world in which you as a lender have to worry about the five or ten or twenty people that you can know personally a lot about. Now you can scale it up so that you can judge the creditworthiness of millions of people — billions of people! — millions of businesses.
It’s also information that migrates in the sense that it can be used in other contexts. And so, when bond ratings were invented, they got adopted by regulatory agencies. So, public policy became beholden to bond ratings, and they got used in private contracts.
So, FICO scores, credit scores, bond ratings — these are all highly quantitative ways of evaluating trustworthiness, and they really have become how credit and trust are governed in the modern world.
These kinds of practical rules of thumb really drive the kind of calculative, quick evaluative decisions that cab drivers make every day, thousands of times.
So, credit is a big thing, and trust in credit is an absolutely crucial issue.
Lenders are vulnerable to the borrowers, depending on the size of the loan, and they’re uncertain about whether the borrowers will be willing and able to repay the loan in the future.
And the thing about credit is that modern economies absolutely depend on credit. Credit is the lifeblood of the consumer economy.
There would be no housing market; there would be no market in cars; there would be no sales and durable goods if people weren’t able to borrow money through credit cards, through mortgage loans, through car loans, and so forth to facilitate those purchases.
So, in the issue of credit, sociologists have studied how lenders actually evaluate the trustworthiness of potential borrowers. And this is done by some people in the context of bankers who are looking at customers who want personal loans or who want small-business loans — stuff like that.
And what they found is that the bankers also were concerned deeply about the trustworthiness of the borrowers.
So, they do collect a lot of data. But it turns out that even when you’ve got all the quantitative information you possibly want — you’ve got the credit scores; you’ve got the loan-to-value ratio; you’ve got all that kind of stuff — it still turns out that sometimes the numbers are equivocal.
What are called “relational proxies” become very important. And that’s a situation where the lending officer will kind of ask themselves, “Do I trust this borrower? Do I think that they are of good character? Do I believe that they’re being really sincere when they say that they plan to repay the loan?”
Those studies of credit focus on situations where lenders and borrowers can actually meet face-to-face, or one person can look across the table at another person and decide whether they’re trustworthy.
But we know that credit in modern society has become much bigger than that. It now is mass credit. Millions and even billions of people are obtaining credit, and they’re getting it from folks who have never met them, will never meet them, and will never sit across the table from them.
How is this possible? Well, the answer is, what we have developed to manage the trust problems in mass credit is a giant informational apparatus that provides lots of information about would-be borrowers and their trustworthiness to would-be lenders and doesn’t depend so much on face-to-face interactions and direct contact.
So, the importance of this kind of informational apparatus is really made obvious in studies of how credit card systems, which are very common in the West and which have been around in the U.S. since the 1950s, have migrated to the post-socialist societies of Central and Eastern Europe — places like Russia.
And what happened was, it turns out that to build a credit card system in Russia is very difficult as compared to the United States.
It turned out that a lot of this background information system that we in the West rely on to track people’s credit records, to keep score of whether they bounce checks and whether they fall behind on payments and how good they are and how in debt they are — that apparatus didn’t exist in places like Russia and had to be built from the ground up.
And it’s that apparatus much more than old, face-to-face direct contact between lenders and borrowers that proves to be critical for the development of mass credit in both Russia but also in the United States.
So, in my own research, I’ve been very interested in the emergence, the historical emergence, of this giant informational apparatus that undergirds modern credit cards. But it turns out it undergirds lots of other forms of credit as well: bond ratings, small business credit, and whatnot.
And the big shift that I see — that started in the middle of the 19th century and which continues to this day — is a shift from credit and issues of trust that previously was posed as a matter of character: Is somebody trustworthy? How do I know that someone in their heart is trustworthy and will repay the debts? How am I connected to that person directly?
We shifted from a world in which that was how you dealt with trust to a world in which, now, we don’t worry about whether we know someone, and we don’t worry so much about their character. But we rely very heavily on all kinds of quantitative, standardized information that has been gathered and processed and interpreted by someone.
It’s no longer a world in which you as a lender have to worry about the five or ten or twenty people that you can know personally a lot about. Now you can scale it up so that you can judge the creditworthiness of millions of people — billions of people! — millions of businesses.
It’s also information that migrates in the sense that it can be used in other contexts. And so, when bond ratings were invented, they got adopted by regulatory agencies. So, public policy became beholden to bond ratings, and they got used in private contracts.
So, FICO scores, credit scores, bond ratings — these are all highly quantitative ways of evaluating trustworthiness, and they really have become how credit and trust are governed in the modern world.
Trust and Economic Prosperity: A Finance Perspective
Foundations
Contributor / Paola Sapienza
Paola Sapienza
Finance
Generalized Trust,Economic Exchange,Rationality
In 1972, Ken Arrow, Nobel Prize–winning economist, said that virtually every commercial transaction has within itself an element of trust. Indeed, he actually went on saying that it can be plausibly argued that much of the economic backwardness in the world can be explained by the lack of mutual confidence.
Since then, economists have correlated generalized trust, the concept that whether people tend to trust each other in an anonymous way with economic growth, and they found the remarkable correlation between these two variables.
It was actually, though, quite puzzling why there was such a strong correlation between the way people tend to interact in certain communities and economic prosperities.
So, economists start wondering, what is the missing link between these two variables?
One of the hypotheses postulated is that the missing link could be finance. Why? Well, in finance, a fundamental element is credit. And indeed, the word “credit” comes from ‘credere’ in Latin, which means to trust. Why is that so?
It takes a lot of trust for people to depart with their money in exchange for a promise. And this is fundamentally the way finance works.
We delegate a broker, an insurance company, a bank, we put our money in their in their hands in exchange of a future promise. And for a long time, we’re not going to see the money that we gave to them.
Now, finance is very, very important for economic prosperity. We know from years of research that without finance, allocation of resources doesn’t happen properly and economic prosperity doesn’t happen.
BUMPER: Exploring Trust through the Stock Market
Given the hypothesis postulated by economists that finance is the missing link between trust and economic prosperity, economists start investigating empirically whether indeed trust facilitated development of financial contracts in various economies.
They started studying the willingness people have to invest in the stock market.
Investment in the stock market has been one of the puzzling features in financial economics, because we know by observation that many people deliberately stay away from the stock market even when they would benefit from investing in it.
Therefore, it was reasonable to think whether, besides all the other variables that economists generally considered as determinant of investing in the stock market—such as risk aversion—trust was a big player in this decision.
Economists studied whether people that have lower generalized trust are less likely to invest their money in risky investment, such as putting their money in the stock market or even opening a checking account.
And they found a remarkable correlation between the level of generalized trust that individuals have with their willingness to invest their own money.
They also found a remarkable correlation between areas where there is a generalized low level of trust and the development of financial markets in general, suggesting that indeed this link between trust and economics could be indeed going through finance.
Since then, economists have correlated generalized trust, the concept that whether people tend to trust each other in an anonymous way with economic growth, and they found the remarkable correlation between these two variables.
It was actually, though, quite puzzling why there was such a strong correlation between the way people tend to interact in certain communities and economic prosperities.
So, economists start wondering, what is the missing link between these two variables?
One of the hypotheses postulated is that the missing link could be finance. Why? Well, in finance, a fundamental element is credit. And indeed, the word “credit” comes from ‘credere’ in Latin, which means to trust. Why is that so?
It takes a lot of trust for people to depart with their money in exchange for a promise. And this is fundamentally the way finance works.
We delegate a broker, an insurance company, a bank, we put our money in their in their hands in exchange of a future promise. And for a long time, we’re not going to see the money that we gave to them.
Now, finance is very, very important for economic prosperity. We know from years of research that without finance, allocation of resources doesn’t happen properly and economic prosperity doesn’t happen.
BUMPER: Exploring Trust through the Stock Market
Given the hypothesis postulated by economists that finance is the missing link between trust and economic prosperity, economists start investigating empirically whether indeed trust facilitated development of financial contracts in various economies.
They started studying the willingness people have to invest in the stock market.
Investment in the stock market has been one of the puzzling features in financial economics, because we know by observation that many people deliberately stay away from the stock market even when they would benefit from investing in it.
Therefore, it was reasonable to think whether, besides all the other variables that economists generally considered as determinant of investing in the stock market—such as risk aversion—trust was a big player in this decision.
Economists studied whether people that have lower generalized trust are less likely to invest their money in risky investment, such as putting their money in the stock market or even opening a checking account.
And they found a remarkable correlation between the level of generalized trust that individuals have with their willingness to invest their own money.
They also found a remarkable correlation between areas where there is a generalized low level of trust and the development of financial markets in general, suggesting that indeed this link between trust and economics could be indeed going through finance.