Overcoming social traps in low-coordination economies: Particularized trust and local social networks
Type
conference paper
Date Issued
2022-10-20
Author(s)
Abstract
Cohesive and capable intermediary organisations at the meso-level nurture the cooperative high-trust institutional structure that drives advanced capitalist democracies. This institutional set-up is however particularly scarce in low-coordination economies like post-socialist countries. Trust and cooperation exist primarily at the top among elites and at the bottom between individuals – also described in the “hourglass” structure. This structure is credited for the persistence of social traps like corrupt institutions and ineffective cooperative equilibria. Faced with this adverse institutional environment, I show that we can identify “second-best” governance strategies located at the bottom-half of the hourglass to overcome social traps. By examining the engagement of SMEs in the provision of VET – the paradigmatic case requiring trusted intermediaries at the meso-level –, I argue that micro-level actors, specifically local VET schools, can functionally substitute the lack of institutional trust and meso-level organisations. They can perform key coordinative tasks by relying on particularized trust and local social networks. A most-different case study design comparing SMEs’ provision in VET in Albania and Slovakia eliminates many potential variables and elucidate significant commonalities. Qualitative data collected during interviews with SMEs and stakeholders in both VET systems build the foundation for the empirical examination. The findings demonstrate that low-coordination economies are not doomed to remained trapped: Locally adapted innovations that nurture productive cooperation can emerge despite lacking a strong meso-level societal space.
Event Title
DIA PhD Day
Event Location
University of St. Gallen
Event Date
20.10.2022