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📙 Social Traps and the Problem of Trust (Theories of Institutional Design) by Bo Rothstein — free pdf


This book should be required reading for doctoral programs across the full array of the social sciences. That is a rare distinction in the current era when the social sciences find themselves heavily segmented and at times with antagonistic relationships. Rothstein is himself a political scientist. His earlier books, such as The Social Democratic State: The Swedish Model and the Bureaucratic Problem of Social Reforms (1996) and Just Institutions Matter: The Moral and Political Logic of the Universal Welfare State (1998), focused more on classic political science topics. In this book, Rothstein draws on: * psychology and economics, as well as laboratory experiments, to dig into the question of what theory of human behavior is appropriate for understanding individual behavior in the context of social dilemmas; * sociology to examine the meaning of culture, how it changes over time and space, and how it affects the level of trust in a society; * anthropology to understand how to use case studies to gain theoretical insight about the important contextual variables that have a major impact on how individuals relate to one another in a particular setting; * history to examine what made it possible for Hitler's regime to engage in massive murders without the German intellectual community challenging these abhorrent practices; and * political science and institutional economics to explain why some types of governance regimes are more likely to enhance generalized trust and thus reduce the level and extent of social traps in a society. Not many thoughtful, well-documented, contemporary, academic books encompass this sweep of disciplinary questions while contributing to learning in all of these disciplines. The central theoretical puzzle of the book is why some individuals and groups overcome social traps while others suffer the perverse consequences stemming from a lack of cooperation. By a social trap, Rothstein means a situation where, due to a lack of social capital, individuals acting independently, or through the intermediation of an organization, are unable to cooperate to achieve joint benefits that exceed individual short-term benefits. He does not concentrate on the two-person Prisoner's Dilemma, which is often used as the classic example of a social trap or social dilemma. Rather, he examines the negative impact on solving social dilemmas stemming from widespread corruption, labor-management disputes, overuse of natural resources, civic unrest and violence, and many other types of social traps experienced to a greater or lesser extent in all societies. The existence of a huge variation in the capacity of citizens and officials to overcome social traps in empirical settings across societies and over time is the major puzzle he examines in this book. In addressing the puzzle of this extreme variation, Rothstein asks whether either of two dominant approaches to the study of social dilemmas--individual rationality or culturalism--is the best source of a theoretical explanation for why some individuals and groups find solutions for social traps while others do not. He responds that social scientists cannot rely exclusively on either of these approaches. Both theoretical approaches make unrealistic assumptions about how people act in social dilemmas and both are oriented toward deterministic reasoning. Rothstein's answer to this basic organizing question is that neither of these major academic approaches is sufficient for solving this deep puzzle. I strongly agree with him on the necessity for combining analysis at the individual level with an understanding of diverse institutions and community structures (Ostrom, 2005). He presents an alternative theoretical framework that combines aspects of subjective rational choice, the cultural "tool box" that individuals in a context use, and the role of institutions to affect particular social traps. Rothstein argues that explanatory power is "likely to be centered on variation in institutions, because they can serve as a link between overall structures and individual agency" (p. 42). He posits three reasons to view variations in institutions as the general hypothesis derived from his framework for why social traps are overcome or persist in diverse settings: "They present incentives, they induce strategy because they make it plausible to calculate what the other agents are likely to do and, in some cases, they influence ethics and norms" (p. 42). Rothstein then digs into the concept of social capital that has been posited by some scholars as the asset that enables some groups to overcome social traps successfully while others, who lack social capital, are incapacitated. He criticizes the confusion of multiple definitions of social capital and particularly tautological definitions (e.g., social capital is based on cooperation, reciprocity, and trust and leads to cooperation, reciprocity, and trust). Rothstein defines social capital at the individual level as the "sum of the number of social contacts multiplied by the quality of trust in these relationships" (p. 66; author's emphasis). At the aggregate level he posits a similar definition composed of the number of social contacts and networks that individuals have as affected by the "extent to which people generally believe that they can trust most of these contacts" (p. 66). He also is critical of the view that an extensive welfare state constrains the development of social capital especially given the extensive social capital (as measured on many empirical indicators) that exists in Sweden, which is certainly characterized by an extensive welfare state. He claims that universal and trustworthy political institutions are a basic causal factor leading to the creation of social capital and not the reverse process as posited by Putnam (1993, 2000) and other scholars working on social capital. After his extensive survey of the theoretical and empirical literature on social traps, social capital, and trust, Rothstein digs into the deepest puzzle of how trustworthy institutions can be designed and implemented especially in settings where ineffective, conflict-ridden, personalistic, and/or corrupt institutions have existed for some time. In essence, he is examining whether it is feasible to get out of social traps once trust among participants has disappeared. To address this question, he explores how labor unions and business corporations shifted from several major industrial disputes and protests that occurred in Sweden at the end of the nineteenth century through the 1920s to become a model of peaceful and collaborative industrial relations. This is not an easy puzzle to unravel. Rothstein cites extensive scholarly work on this development. Many scholars point to the success of a major Labor Peace Conference that occurred in 1928 only six months after one of the biggest labor demonstrations in the twentieth century as well as the strategy used by leaders from both sides to blame communists and syndicalists for irresponsible actions. The historical record is quite clear that this Labor Peace Conference was an important step toward creating a shared mental image of collaboration and wise restraint to replace the earlier image of confrontation and mistrust. In his effort to unravel how participants in social traps can migrate from gross levels of mistrust to a setting of mutual trust and willingness to negotiate fair agreements, Rothstein digs still further into this problem than much of the earlier literature. First, he explores a detailed theoretical analysis of the process of bargaining between labor and management and the many reasons that these processes can collapse into processes of mutual mistrust over particular issues or over all aspects of their relationships. Secondly, he examines a much longer historical process at the turn of the nineteenth century when the Swedish national government established a variety of labor policies that involved creating local boards with representation of both labor and management to conduct the public oversight of social insurance and local employment offices. Thus, while severe conflict had erupted over a particular set of issues, labor and business leaders had already experienced decades of working together in local and regional governmental bodies to achieve relatively fair and broadly acceptable public policies. Rothstein agrees that the Labor Peace Conference was an important event, but disagrees with the presumption that one meeting alone could achieve the transition from gross mistrust to high levels of trust. Rothstein uses this in-depth case study, and other findings, to illustrate the importance of administrative institutions that he calls "universal" in that such institutions are based on a basic sense of fairness, deliberation, impartiality, and openness. He draws on prior theoretical work on second-order social dilemmas to explain why some individuals facing uncertainty are willing to design a diversity of institutions that meet his criteria for being universal. Rothstein argues that without convincing evidence of openness, fairness, and trustworthiness of public institutions, social traps will continue unabated or deepen rather than finding resolution simply through social relationships among family and friends. Thus, the book presents a nuanced theoretical argument that focuses on context and history of complex, cultural settings where choices are made by subjectively rational individuals within institutions that enhance or detract from the existence of trust among the participants over time. While one might disagree with a few minor points here and there, this reader has gained immensely from two close readings of the book and intends to assign it to her next

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