The Political Economy of Trust: Institutions, Interests and Inter-Firm Cooperation in Italy and Germany by Henry Farrell

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Trust and cooperation are at the heart of the two most important approaches to comparative politics - rational choice and political culture. Yet we know little about the relationship of trust to political institutions. This book sets out a rationalist theory of how informal institutions can affect trust without reducing it to fully determined expectations. It then shows how this theory can be applied to comparative political economy, in particular to explaining inter-firm cooperation in industrial districts, geographical areas of intense small firm collaboration. The book compares trust and cooperation in two prominent districts in the literature, Emilia-Romagna, Italy, and Baden-Wurttemberg, Germany. It also sets out and applies a theory of how national informal institutions may change as a result of changes in global markets, and it shows how similar mechanisms may explain persistent distrust among Sicilian mafiosi.

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