Mandatory corporate social responsibility and provision of trade credit: Evidence from India

The relationship between corporate social responsibility and trade credit is investigated in this study via the trust (direct) and cash holding (indirect) channels. We discovered that corporate social responsibility and trade credit are strongly correlated, lending support to the trust channel. We also find evidence for the indirect route; particularly, enterprises with high CSR have high cash holdings, which are associated with less trade credit.     

Information sharing,secrecy and trust among law enforcement and secret service institutions in the European Union

Abstract

Transnational information sharing among security agencies in the European Union and beyond has grown considerably more important over the past decades. Centralised databases and numerous formal and informal networks now facilitate cooperation and information sharing. However, sharing intelligence may not only conflict with the protection of fundamental rights (data protection/privacy; presumption of innocence), but also with the organisational culture of institutions that are built upon secrecy. Police agencies often keep knowledge about individual cases and their strategies secret as long as possible. Intelligence services build their work and strategies upon secrecy even more. This paper analyses the variations of secrecy that can be observed for police agencies and secret services, and the relationship between information sharing among security agencies, secrecy, trust, transparency and accountability. In a normative perspective, the paper explores answers to the questions of how secret the work of security agencies should be in democratic rule of law systems and how accountability can be improved without making these institutions work less effectively.     

The Dark Side of Social Capital Re-examined from a Policy Analysis Perspective: Networks of Trust and Corruption

Abstract

This work deepens the analysis of the “dark side” of social capital proposed by Alejandro Portes and Patricia Landlot and revisited by Peter Graeff. For this purpose, it combines the individualistic approach of economic theory with the social perspective of other social sciences to study the economics of corruption embedded in a social structure (a network of trust). It assesses the importance of social relations as a necessary condition to achieve corrupt objectives. To do so, a model of corrupt public contracts embedded in networks of trust is built. Theoretical evidence is found on the importance of networks of trust for the success of corrupt deals between officials and recipients. In addition, seeds are sown for future research and analysis of the role of institutions and monitoring agencies. Finally, the foundation is laid for research in the field of experimental economics to conduct an empirical examination of this proposed model and some policy implications are derived.     

Do Corruption and Social Trust Affect Economic Growth? A Review

Abstract

Two separate literatures suggest that corruption and social trust, respectively, are related to economic growth, although the strengths of the relationships, and the direction of causality, are still debated. This paper reviews these literatures and evaluates the evidence for causal effects of corruption and trust on economic growth, and discusses how corruption and trust are interrelated. The reviews show that absence of corruption and high levels of social trust foster economic growth. The literatures also indicate that corruption has a causal effect on social trust, while the opposite effect is more uncertain. The conclusion offers the suggestion that fighting corruption may yield a “double dividend”, as reduced corruption is likely to have both direct and indirect effects on growth.     

The fraying of the socio‐economic fabric of Hong Kong

Abstract

Since the 1980s, Hong Kong has undergone momentous socio‐economic changes, which in turn have greatly affected public attitudes toward society and the economy. Interpersonal trust and the sense of community have weakened. Hong Kong as a society is increasingly seen as unfair in the sense that it is not perceived as a land of opportunities for the hardworking. The capitalist rules of the game are increasingly considered by the people to be unacceptable. Public demands for more governmental intervention in the economy, particularly in the area of income redistribution, are increasingly raised. Nascent feelings of class antagonism are palpable as economic inequalities are getting worse. As social conflicts of various kinds proliferate, public anxieties about Hong Kong's fraying socio‐economic fabric have come to the fore. People expect the government and the legal institutions to strengthen social order. At the same time, however, public trust of all social, economic and social authorities is declining. Accordingly, as social discontent and anxieties accumulate, the socio‐economic system of Hong Kong will face serious challenge in the years ahead.     

How political malpractice affects trust in EU institutions

Abstract

Political misconduct is known to harm the politicians involved. Yet, we know less about how such events affect trust in political institutions. We study a real-world political malpractice affair in the European Commission, using a three-wave panel design to investigate how information about the affair influences trust in EU institutions. This enables us, first, to isolate the impact of new information on political trust, remedying endogeneity issues common in political trust research. Second, we assess which institutions are affected most (specificity) and whether effects depend upon citizens’ sophistication levels (conditionality). Finally, we assess the durability of effects over time. Our findings demonstrate that citizens obtain knowledge about EU affairs through the media, and use this knowledge in their trust evaluations. In doing so, citizens differentiate between EU and national institutions, with trust in the European Commission affected most. This suggests a sophisticated process and highlights the evaluative nature of political trust.     

Downbound spiral? Economic grievances,perceived social protection and political distrust

Abstract

Momentous events in Western democracies have brought renewed attention to how various aspects of government-controlled policy outputs and outcomes affect citizens’ trust in politics. Unlike most previous research, this study uses individual-level panel data to test the link between government performance evaluations and political trust. Moreover, it gauges performance in more policy areas than previous research, including key aspects of government-controlled social services as well as a wide range of economic risks. The study finds that evaluations of government performance affect political trust but that the evidence is stronger for evaluations of social protection than for economic risks. Crucially, the analysis suggests that the relationship between performance evaluations and distrust is reciprocal. The relationship may be described as a ‘downbound spiral’ where dissatisfied groups develop distrust, which in turn makes for a more pessimistic interpretation of economic risks and welfare state performance.     

Creating flows of interpersonal bits: the automation of the London Stock Exchange,c. 1955–90

Abstract

This article deals with the concept of market information. In particular, it argues that references to the so-called conduit metaphor, which represents markets as a series of information flows, hide the localized, historically contingent and materially mediated practices of the economy. Following the tradition of the performative theory of social institutions, this article argues that the specific meaning of ‘market information’ and its concrete manifestations (e.g. prices) depend on the sociotechnical character of the calculative practices through which market participants orient their economic actions. The point is illustrated through a historical reconstruction of the introduction of price and quote dissemination technologies in the London Stock Exchange between 1955 and 1990. By highlighting the historical and technological contingency of prices, the case of the London Stock Exchange shows that it is impossible to provide a universally and temporally invariant definition of market information.     

Inequality and voting among deprived ethnic groups: evidence from India

ABSTRACT

What are the conditions that determine the electoral success of parties that champion deprived ethnic groups? What is the impact of within-group inequality on this outcome? Existing arguments focus on the role of institutions or the relationship between ethnicity and other social cleavages. This paper contributes to the second approach by studying the impact of within-group as well as between-group inequality on ethnic voting. We use elections to state legislatures within India to control for institutional and historical factors that may influence ethnic voting. Using data from the National Sample Survey, we calculate inequality in consumption expenditure. We show that high within-group economic inequality among deprived ethnic groups hinders the electoral success of parties that champion these groups, whereas high between-group economic inequality has the opposite effect. Our findings also identify a potential causal mechanism (preference heterogeneity) that might link within-group inequality to ethnic voting.     

Increasingly unequal? The economic crisis,social inequalities and trust in the European Parliament in 20 European countries

The 2008/2009 economic crisis has been identified as an important element contributing to declining trust in institutions in Europe and worldwide. However, it is unclear whether this decline in trust is distributed homogenously among citizens or whether there are differences across social strata. This article applies multilevel models to six waves of European Social Survey (ESS) data to analyse changes in trust in the European Parliament (EP) from 2002 to 2012 in 20 European Union countries. Moreover, it investigates whether individuals with different socioeconomic backgrounds experienced different reductions in trust. The results indicate that trust in the EP declined the most in the peripheral European countries hit hardest by the economic crisis: Portugal, Italy, Ireland, Cyprus, Greece and Spain. Furthermore, the results suggest that the decline in trust was more pronounced among subjects with lower social status. The tightening of the link between social and political inequalities is especially preoccupying considering the importance of trust in institutions for citizens to actively participate in society, voice their needs and demand their place at the table. Hence, the worsening economic conditions, combined with declining levels of trust, are not only troublesome for the functioning of democracies as a whole, but they are also problematic at the individual level as they are likely to perpetuate the divide among subjects at different ends of the social ladder.     

Economic strain and perceptions of social cohesion in Europe: Does institutional trust matter?

The degree to which different social groups get along is a key indicator of the cohesiveness of a society. This study examines perceptions of social cohesion among Europeans and explains variations in those perceptions by considering the separate and combined effects of economic strain and institutional trust. Analyses were conducted with the 27 member countries of the EU based on the Eurobarometer 74.1 on poverty and social exclusion conducted in 2010. Results show that individuals living in households experiencing economic strain perceive social cohesion to be weaker than their less economically hard‐pressed counterparts. By contrast, individuals trusting their political institutions perceived there to be higher levels of cohesion. Furthermore, institutional trust substantially moderates the negative relationship between economic strain and perceptions of cohesion. These results are robust to various model specifications. Moreover, extending the analysis revealed that this moderating effect held when considering social relations between the poor and rich and between different racial and ethnic groups. Theoretical and practical implications of the results are discussed.     

Trusting the State,Trusting Each Other? The Effect of Institutional Trust on Social Trust

Trust in state institutions is a prominent explanation of social trust. However, previous—mainly cross-sectional—analyses provide limited causal evidence regarding the relationship between institutional trust and social trust and it is thus essentially unknown whether an observed relationship reflects reverse causality (social trust forming institutional trust), or both forms of trust reflecting deep-seated dispositions (common confounding). Against the backdrop of the shortcomings of previous cross-sectional analyses, this paper utilizes two Danish panel surveys containing measures of both types of trust for the same individuals surveyed at multiple points in time over a long time-span (up to 18 years) to address the potentially reverse and/or spurious relationship. Using individual fixed effects and cross-lagged panel models, the results provide strong evidence of trust in state institutions exercising a causal impact on social trust, whereas the evidence for a reverse relationship is limited.     

‘Lending by numbers’: credit scoring and the constitution of risk within American consumer credit

Abstract

This paper examines how statistical credit-scoring technologies, sanctioned by the state in the interests of promoting equality, became applied by lenders to the problem of controlling levels of default within American consumer credit. However, these technologies, constituting consumers as ‘risks’, are themselves seen to be problematic, subject to their own conceived sets of methodological, procedural and temporal risks. Nevertheless, as this article will show, such technologies have increasingly been applied to other areas of consumer lending, thus interpreting a wider array of operational contingencies in terms of risk. Finally, it is argued that, since the 1980s, the constitution of credit consumers as risks has been deployed to new ends through technologies of ‘profit scoring’ and new practices of ‘risk pricing’.     

政府公信力与地方政府能力建设研究

政府能力政府诚信与政府公信力之间存在相互促进、相互影响的关系。政府诚信是政府公信力的基础和源泉。诚信的政府将获得更大的公众信任,而政府公信力的提高则有助于进一步加强政府的执政能力。对正处于社会转型期的中国地方政府来说,提高政府公信力,加强地方政府能力建设,树立廉洁、有效、公正的政府形象,是落实科学发展观、构建和谐社会的重要途径。     

Real Denial Rates: A New Tool to Look at Who Is Receiving Mortgage Credit

ABSTRACT

The observed mortgage denial rate (ODR), calculated from Home Mortgage Disclosure Act (HMDA) data, is often used to measure mortgage credit availability, but it does not account for shifts in applicants’ credit profiles. In this article, we develop an additional tool, which we call the real denial rate (RDR), as a way to account for credit differences and hence more consistently measure denial rates and mortgage credit accessibility. We match HMDA data with CoreLogic proprietary data to obtain both borrower demographic information (e.g., income and race and ethnicity) and mortgage credit characteristics (e.g., loan-to-value ratios, debt-to-income ratios, and credit scores). We account for shifts in applicants’ credit profiles by considering only the denial rate of low-credit-profile applicants. Our RDR results show that conventional mortgages have higher denial rates than government mortgages do, racial and ethnic differences are smaller than the ODR indicates but are not eliminated, and small-dollar mortgages have higher RDRs, particularly in the government loan channel.     

Corruption,Trust and their Public Sector Consequences: Introduction to the Special Edition

Abstract

Corruption and trust are two important determinants of the quality of public sectors. Empirical studies in different literatures suggest that corruption and trust have effects on factors such as economic growth, the quality of democratic institutions, life quality, the size and effectiveness of the public sector and much more. The purpose of this special issue – one that goes to the heart of the comparative policy ethos which is central to the journal's mission – is to draw on a number of country examples to shed light on the state of the literature on the connection between corruption and trust. The aim is to show that these two concepts are highly relevant to each other, and that their interconnections are important to understand the public sector consequences of corruption and trust. By focusing on these concepts, we hope that this special issue can pave the road for further comparative research.     

China's corporate credit reporting system: A comparison with the United States and Germany

Corporate credit reporting (CCR), which aims at increasing trust in corporates, constitutes an intriguing, yet understudied set of regulatory institutions as it is both a regulatory object and subject at the same time. Differences in national CCR systems pose challenges for multinational companies and have increasingly become a subject of international conflicts on regulatory standards. In this context, the case of China deserves special attention since the country pursues both institutional divergence and convergence with international examples. Hence, the characterization of China's regulatory regime remains difficult. By comparing the institutional context of CCR in China to those in the United States and Germany, this paper sheds light on a specific aspect of China's complex regulatory regime. At the same time, it provides insights into the Chinese manifestation of CCR, which are important for the international business community.     

政府在社会信用体系建设中的作用探讨

本文从建设社会信用体系是发展市场经济的战略性制度安排入手,阐述了起步阶段的中国社会信用体系建设必须要由政府协调和引导,及政府在该体系建设中的具体作用.最后从政府也是社会信用活动参与者的角度出发,论证了政府守信和相关约束监督机制.     

Reintegrating disadvantaged communities into the fabric of urban life: The role of community development

Abstract

This article analyzes the extent to which systematic spatial variations in opportunities in metropolitan areas provide a persuasive rationale for three current strategies for stimulating the development of urban communities: enterprise zone programs, community development financial institutions, and community development corporations. It examines whether the strategies are appropriately designed to respond to serious deficiencies in opportunities in distressed inner cities and reviews available evidence about their efficacy in addressing those deficiencies.

A review of the literature reveals that poor inner‐city neighborhoods, particularly communities of color, have unequal access to opportunities in numerous areas, including employment, credit and financial services, housing, neighborhood shopping, and social networks and services that provide access to information and resources. The limited best‐case evidence indicates that the three strategies vary greatly in their ability to address these inequalities.     

Safeguarding the Future of Democracy

Abstract

The tenets of democracy appear to be facing a crisis in modern western societies, as trust in public figures and institutions—including politicians and government—declines and distrust of them increases. This decline is particularly visible in the cynical attitudes and non-voting behaviour of British young people. This paper presents a more contemporary conceptualisation of trust and distrust, from which four segments of young voters and non-voters emerge. A mix of calculative, predictive and identification trust-building strategies are applied to these four segments to reinforce their trust and reduce their distrust, thereby reconnecting them with parliamentary politics. This paper concludes with an agenda for further research.