This is the fourth in a series of blogs where we take a look at the issues and the countries that will be at the forefront of the development agenda, not now, not next year, but over the next 2 to 5 years—thus, “after tomorrow”.1
There is no evidence that the 2008-09 crisis changed citizens’ trust in the state, in either direction. Well before the crisis, that trust was already in long-term decline among advanced countries, and was stuck at a very low level among developing ones. And, while markets may have lost their shine, governments did not pick up the credit.
Data, of course, are limited and definitions are problematic. But there are good indications that not all institutions of the state are distrusted equally or everywhere: people in rich countries look up to their armed forces and down on political parties; in Latin America, they trust basically nobody; and in very poor places where clientelism takes the space of institutions, they tend to trust the incumbent to deliver privileges. This matters for public policy. Distrustful citizens minimize their relationship with the state—they work in informality, opt out of public education, dodge taxes, settle disputes by their own hand, and stay out of politics. Reforms and, more generally, the emergence of a national strategic vision, become much more difficult.
Can “trust in government” be restored or, where it never existed, created? Yes, but the levels of trust vary across stages of development. In OECD countries, the marginal need is for more accountability. There, the state has achieved an adequate level of service provision, even a constant flow of improvement in service quality. But citizens have gotten used to it. They are now more impressed by values in public life—probity, commitment, responsibility.
In contrast, performance seems the missing key to trust in developing countries. Tangible, communicable results are what their voters look for and what they reward (Brazilian governors are pioneers in this). Where clientelism is the tradition, a track record of both accountability and performance is necessary before people risk abandoning the incumbent and begin to rely on institutions.
Of course, there are also common features to all trust building—performing well in some services raises trust more than in others (health provision has higher returns than market regulation, for example); expectations are ratcheted up (what you achieved yesterday becomes today’s baseline); confidence can be quickly squandered (any suspicion of gaming evaluations is a trustbuster); and a sense of generational betterment gathers support (we appreciate a state that opens opportunities for our children).
But, in the post-crisis world, what will be the most effective trust builders for developing-country governments? Primarily, four: manage professionally, spend wisely, borrow little, and account well for your assets.
To access The Day After Tomorrow: A Handbook on the Future of Economic Policy in the Developing World, please visit: http://go.worldbank.org/TPPWANWXR0 .
It can also be read online and purchased (World Bank Publications; ISBN 978-08213-8498-5; $35) at http://publications.worldbank.org/18498 , through bookstores, and through the World Bank's network of international distributors http://go.worldbank.org/6XBJT3DJA0 .
1 Here we borrow heavily from a book that we’ve just published: Canuto O. and M. Giugale, eds., 2010, The Day After Tomorrow: A Handbook on the Future of Economic Policy in the Developing World, World Bank Publications, Washington D.C.
*Otaviano Canuto is the World Bank Vice President for Poverty Reduction and Economic Management, and Marcelo Giugale is the Sector Director of Poverty Reduction and Economic Management for the Latin America and the Caribbean Region.