Creating Social Trust in Post-Socialist Transition

JNOS KORNAI is Allie S. Freed Professor of Economics Emeritus at Harvard University and Fellow Emeritus of the Collegium Budapest, Institute for Advanced Study, Hungary. Professor Kornai has been the president of the Econometric Society and the European Economic Association. He has been awarded an honorary doctorate by ten universities and has been a visiting Professor at Yale, Princeton, Stanford, Sussex, and Stockholm universities and the London School of Economics and Political Science. Professor Kornai is an honorary member of the American Academy of Arts and Sciences and the American Eco

"This volume takes its readers on a fascinating journey through the murky marshlands of post-socialist transition. It provides a wealth of new empirical insights, and a set of challenging new theoretical approaches. On completion of the journey, we have learned a great deal not only about post-socialism. Even more importantly, we come away with a richer understanding of the fundamental problems that are involved in building social capital and social trust. For policy makers and scholars alike, this should be required reading." - Stefan Hedlund, Professor of East European Studies, Uppsala University "This fine and powerful volume is a major contribution to the study of the non-economic sources of economic order. It brings together distinguished scholars from several disciplines to discuss from various viewpoints the question of the role played by social trust in the emergence of efficient economic institutions, sources of honesty and trust, and the relationship between institution building and the evolution of social trust. Based on original and innovative study of the different aspects of the Post-Socialist transformation, it offers new ways of thinking about these issues and it presents a timely and thought provoking overview of the problems of creating social trust in the process of encompassing political and economic change." - Laszlo Bruszt, Central European University and European University Institute "An important interdisciplinary and international contribution to the understanding of post-socialist societies, which at the same time throws new light on some more general theoretical issues vividly debated in contemporary social science. In a creative fashion it joins the perspectives of the committed insiders, scholars from the former socialist countries, and informed outsiders studying the region from an intellectual and emotional distance. The volume successfully combines theoretical reflection with rich empirical evidence and background knowledge of the area. It is addressed both to the specialists in the field of democratic transitions, and all those for whom the post-socialist societies provide a strategic research site for the study of soft cultural factors of social life - trust, honesty, truthfulness, loyalty, solidarity and the like." - Piotr Sztompka, President, International Sociological Association (ISA) "This is a wonderful collection in which the authors advance concepts by insightful analysis of rich empirical materials. Comparisons across country cases abound - within and among the chapters. Delightfully, some of the findings are surprising. Enjoyably, the contributors don't always agree with each other. There is a lively debate here that will be of interest not only to those studying transforming economies but to economic sociologists more generally." - David Stark, Arthur Lehman Professor of Sociology & International Affairs, Columbia University, and External Faculty Member, the Santa Fe Institute

• Preface; J.Kornai & S.Rose-Ackerman Introduction: Creating Social Trust; B.Rothstein PART I: SOCIAL CAPITAL AND DEMOCRATIC TRANSITION Social Capital and the Quality of Government: The Casual Mechanism; B.Rothstein Honesty, Trust, and Legal Norms in the Transition to Democracy; G.Badescu & E.M.Uslaner PART II: TRUST AND THE BUSINESS ENVIRONMENT Firms Trust? Evidence From a Survey of 26 Transition Economies; M.Raiser, A.Rousso & F.Steves Non-Transparency of the Post-Communist Economies: The Relationship Between the Formal and the Informal in the Case of Banking; A.V.Ledeneva How Trust is Established in Economic Relationships When Institutions and Individuals are Not Trustworthy: The Case of Russia; V.Radaev Establishing Confidence in Business Partners: Courts, Networks, and Relationships as Pillars of Support; C.Woodruff The Selective Use of State Capacity in Russia's Economy: Property Disputes and Enterprise Takeovers After 2000; V.Volkov Mafia Transplantation; F.Varese Beyond Law Enforcement: Financial Market Regulation in China and Russia: K.Pistor & C.Xu PART III: THE PSYCHOLOGY OF CREATING AND DESTROYING SOCIAL TRUST Trust and Networks of Informal Co-operation; K.S.Cook, E.R.W.Rice & A.Gerbasi Blindness to Success: Social Psychological Pbjectives on the Way to market Economy in Eastern and Central Europe; A.Örkény, G.Csepeli, M.Székelyi & I.Barna