We all have someone who we trust, and then someone we do not trust. However, for some of us the radius of trust is small while for some us it is comparably larger. Research by social scientists such as Francis Fukuyama and Robert Putnam shows that when citizens in a country have shorter radii of trust, it hurts. It hurts business. It hurts politics. It hurts life in general.
When the radius of trust is short, collaboration is less likely. For example, if Ram Prasad Khanal has a short radius of trust, he is unlikely to collaborate with a person who he does not know. In contrast, if he were to have a high radius of trust, he is more likely to collaborate.
The radius of trust is short in Nepal.
This has increased transaction costs in business, politics, and social services. For example, we see a lot of favoritism in terms of family relationship in politics. Part of the reason is that parents derive vicarious pleasure from the success of their children. But that is not the only reason. It is also because they have a short radius of trust. They have difficulty trusting someone outside their circle, and are uncomfortable delegating important work to someone who doesn’t fall within their radii of trust.
Another example is in the case of business. Most of the large businesses in Nepal are family owned. This is partly because a good partnership requires mutual trust. Because of a short radius of trust, it is hard to find someone you can trust, and someone who can trust you. The result is that we do not have very large corporations like developed countries despite having a large market.
Yet another example of the radius of trust in the political context is in the case of federalism. Because of small radii of trust, different ethnic groups don’t trust people outside their ethnicity. It is because of these short radii that the country has had such a difficult time coming up with a federal map for the future.
What is unfortunate is that it is impossible to lengthen the radii of trust easily by a new law or policy, whatever it may be. The radii of trust only changes slowly. How much we trust people out of our network is largely a byproduct of legal tradition, policies, and interaction among our citizens over centuries. When people come together and work for a common good repeatedly they build trust among themselves. But when there is a one group that calls all the shots and another group that follows the order, the radii of trust between the groups shorten. That is why a mature democracy with strong local government has citizens with longer radii of trust. And, nascent democracies with a dictatorial legacy have citizens with smaller radii of trust.
There are two policy implications of low radii of trust in Nepal. One, it is a harsh reality that it may take many decades and possibly a century for trust to lengthen, so we need to come to terms with this. We need to accept a compromise that takes this reality into consideration. A sermon of how much we should trust each, and how we are all Nepali first will not be sufficient. We need to accept federalism that is based largely on one’s ethnicity because it is a byproduct of low radii of trust that will not change anytime soon.
Two, we need to set the country on a path that will increase the radii of trust. One way to do that is to encourage people from different groups to spend time together and work together. That is why affirmative action which brings marginalized groups into the mainstream is important. Only when they interact for a common good will they increase their radii of trust. If not then, over time, their children or grand-children will develop greater radii of trust.
How much we trust people out of our network is a product of legal tradition, policies, and interaction among citizens over centuries.
It is important to do this, not only at the federal level, but also at the state level. The new states are going to be more susceptible to elite capture, and historically the weakest groups may continue to be marginalized.
Yet another way to achieve this is to continue to send more funds directly to the villages for development work which will encourage people to work together for a common good. Over time, this should also increase the radii of trust.
Let us hope that our new constitution takes this into consideration.
The writer is an Assistant Professor of Finance at Texas A&M International University in Texas
680anand@gmail.com
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