1. New Approaches to Economic Challenges
Seminar on Project C1, 4 March 2014
REVISITING THE SOCIAL CONTRACT:
REBUILDING TRUST FOR SUSTAINED
ECONOMIC RECOVERY
TRUST IN GOVERNMENT: ASSESSING THE
EVIDENCE, UNDERSTANDING THE POLICIES
Mario Marcel
Deputy Director, GOV
Stéphane Jacobzone
Deputy Head of Division, GOV

2. Trust: an issue for the attention of
leaders
 "The crisis is calling for a redefinition of the balance between the
state and markets, and for new instruments to boost citizens'
trust in both." Angel Gurría, Secretary-General
 “The world urgently needs to rebuild trust in leaders, in
governance systems and among countries if the international
community is to shape new models and collaborative approaches
to solve global challenges”, closing session of the World
Economic Forum’s Summit on the Global Agenda 2011.
 “As governments seek to restore long-term growth potential and
to address the social impact of the crisis, they also face a
significant challenge to restore the trust of citizens and markets in
the ability of governments to address current challenges and
implement reforms that will deliver fair and resilient growth” OECD MCM Chair’s Summary

3. What does Trust mean ?
• A double dimension for Trust:
– An attitude, influenced by experience, that shapes
behaviour
– A perception
• means holding a positive perception about the actions
of an individual or an organisation.
• Subjective perception, in the eyes of the beholder
• Confidence of citizens in the actions of a “government
to do what is right and perceived fair”
• Not actual, but perceived performance
matters

4. Trust in what and in whom ?
• Citizen/customer trust in the public
sector: related to other outcome variables:
citizen satisfaction with public services,
civic engagement, well being,
• Public sector trust in citizens customers:
matters for policy effectiveness,
compliance, taxation, etc..
• Trust within government and the public
sector: smarter more effective government

5. Trust in what, and in whom ?
A multi-way relationship
Interpersonal trust
Trust in private
institutions
SYSTEMIC
TRUST
Trust by government
in citizens
Trust in
government

6. Why does trust matter?
• A key foundation upon which political
systems are built: it affects government
ability to govern
• Core levels of trust are necessary for the
fair and effective functioning of
institutions (adherence to the rule of law)

7. Trust is key for achieving economic
and social outcomes
• Trust has the potential to:
 Increase confidence in the economy (consumption decisions,
job mobility, hiring and investment decisions).
 influence individual behaviour in ways that support policy
outcomes and effectiveness (health, social policies,
innovation the environment, taxation, regulation, private
pensions, stock market participation).
 Mitigate the possibilities of free riding and opportunistic
behaviour and helps achieve positive expectations of longer
term policy outcomes
 Improve compliance with rules and regulations and reduce
the cost of enforcement
 Contribute to interpersonal trust, and reduce the transaction
costs of doing business
 Help government to implement structural reforms with long
term benefits

8. Economic Policy-making
Source: Győrffy (2013)

9. Trust and the policy cycle
Consulting with
citizens/Businesses
Design
Acceptance/
rejection of
reform
Listening to
clients / users
Ex post evaluation
TRUST
Measuring
Performance
Implementation
Compliance
Delivering results
Citizen
satisfaction

10. Positive effects on compliance
• The more directors perceive inspectors trust them,
the higher their compliance at next inspection
(Braithwaite & Makkai, 1994)
• The more tax payers trust the tax inspector, the
higher their intention to comply (Murphy, 2004;
Murphy et al, 2009)
• When mining inspectors were „ordered‟ to distrust
mining firms instead of a more cooperative
approach, both parties agreed that over time mining
safety had declined (Gunningham & Sinclair, 2009)
Source: Six (2013)

11. Mistrust and regulation
Aghion et al. (). In countries with a high level of distrust there is much
more regulation. In countries where there is a lot of mistrust there is a
huge demand of regulation. Paola Sapienza
11

12. Mistrust and demand for regulation
where there is a lot of mistrust there is a huge demand of regulation.
12

13. Trust and stock market participation
.4
australia
.3
new zealand
united kingdom of great britain and nort
japan
denmark
united states of america
canada
.2
sweden
norway
switzerland
ireland
portugal
finland
france
netherlands
.1
taiwan province of china
greece
singapore
germany
italy
austria
belgium
india
0
turkey
0
.2
.4
Trust
Source: Sapienza et al. (2013), Kellog School of Management
.6
.8

14. Trust in the crisis
• Dutch proverb: Trust comes on foot and
leaves on horseback
• Many countries were badly affected by
the crisis
• Still coping with the consequences
• What can governments do to restore or
grow trust to the level needed to support
sustained and inclusive growth ?

15. UNDERSTANDING TRUST

16. Understanding and monitoring trust
 A key concern for centres of government
 A concern for private companies (Edelman trust barometer
 Social science : link with behavioral economics

17. What are the available tools?
 National surveys: Pew data (US), IPSOS Mori, Metroscopia
 Existing cross national instruments and their limits
International surveys measuring trust or confidence in government
Number of OECD
countries covered
Name of Survey
Years covered and
frequency
Measurement
Answer scale
34
2005-2012 (annually)
Confidence in national
government
2: yes / no
World Values Survey
25
4 waves: 1989-93;
1994-98; 1999-2004;
2005-08.
Confidence in the
government
4: : a great deal / quite
a lot / not very much /
not at all
Eurobarometer
23
2003-2013 (biannually)
Trust in government
2: tend to trust / tend
not to trust
World Gallup Poll
Edelman Trust
Barometer
15
2001-2013 (annually)
Trust in government
9 point scale: 1 means
“do not trust at all” and
9 means “trust them a
great deal”
Latinobarómetro
3
1995-2012 (annually)
Trust in government
4: a lot / some / a little /
no trust

18. Many countries have suffered
Confidence in national government in 2012 and its change since 2007
% in 2012 (right axis)
100
Percentage points
Percentage point change 2007-2012 (left axis)
%
100
90
90
80
80
70
70
60
60
50
50
40
40
30
30
20
20
10
10
0
0
-10
-10
-20
-20
-30
-30
-40
-40
Source: Gallup World Poll

19. Trust and perception of corruption
Correlation: confidence in national government and perception
of government corruption (2012)
%
100
CZE
GRC
PRT
90
R² = 0.80
KOR
ESP ISR
HUN
USA
SVN
POL
SVK
ISL
AUT
JPN
CHL
OECD BEL
EST
MEX
IRL
FRA
DEU
80
Government corruption
ITA
70
60
50
TUR
CAN
GBR
40
30
AUS
NLD
NOR
FIN
NZL
20
DNK
10
LUX
CHE
SWE
0
0
10
20
30
40
50
60
Confidence in national government
Source: Gallup World Poll
70
80
90
100
%

20. Trust and satisfaction with
public services
Confidence and satisfaction across government institutions (2012)
Source: Gallup World Poll

21. Correlation with consumer sentiment
US Historical Data
Short term fluctuations
in trust appear to be
correlated with trends
in consumer sentiment
•
Pew Research Center, March 2011. Percent trusting government to do what is right always or most of the
time.
•
Consumer Sentiment: Reuters/Univ. Of Michigan Survey of consumers, index of consumer Sentiment.

22. HOW TO IMPROVE TRUST
IN GOVERNMENT?

23. Building the foundations of trust
What are the policy drivers ?
• Economic and social policy outcomes:
– Economic prospects
– Jobs
– Actual levels of inequality against perceived
acceptable standards
• Institutional aspects : government
attributes
– The how, for whom and with whom matters

24. What characteristics of government
matter?
 Reliability: the ability of governments to minimise uncertainty in
the economic, social and political environment of their citizens, and to
act in a consistent and predictable manner.
 Responsiveness: the provision of accessible, efficient and citizenoriented public services that effectively address the needs and
expectations of the public.
 Openness and inclusiveness: a systemic, comprehensive
approach to institutionalising a two-way communication with
stakeholders, (providing information, and fostering interaction to
improve transparency, accountability and engagement).
 Integrity: the alignment of government and public institutions with
broader principles and standards of conduct that contribute to
safeguarding the public interest while preventing corruption.
 Fairness: the consistent treatment of citizens (and businesses) in
the policy-making and policy-implementation processes.

25. Are governments taking action ?
• Centre of government survey: 37 % of respondent say that
they have a strategy, and 44 % say they have taken action
• Governments working on many fronts:

26. Improving the reliability of government
 Managing risks :
• Managing fiscal risks to deliver on institutional
commitments (pensions). Long term fiscal sustainability
• Assessing and monitoring risks, mitigating risks and
promoting resilience (OECD Recommendation on the
governance of critical risks)
 Fostering strategic capacity
in the center
• Three quarters of center of
government survey
respondents say that they
have a strategy

27. Improving the reliability of government
(cont)
 Clear rules, trust and the rule of law
• Sound regulatory frameworks are essential
• Impact of the judiciary and the rule of law

28. Responsive government
 Perception when receiving services
• Closeness to public service providers matters
• Example of Citizens First (Canada). Public Sector
Value Chain.
• “Show your face” for civil servants (Italy)
• Barometers of public services
(France, Finland, Australia, New Zealand, etc…).
• Examples of work on responsiveness in specific areas:
health care, waiting times.

29. Open and Inclusive government
 The public sector: a “crystal bowl”?
• Access to information, consultation
• Limits the scope for waste, abuse and corruption
• The “Open Government Partnership”
• Open data
• Budget transparency
• Reaching out to citizens: concrete examples
• Estonia: “The People’s Assembly”, crowd sourcing
ideas on five key topics, including electoral system
and financing of political parties
• Iceland: Direct democracy, crowdsourcing the new
constitutional bill
• Poland: importance of transparency, trust and
consultation procedures (OECD Poland PGR 2013)

30. Integrity and fairness
 Integrity is crucial
• Policy tools to address high risk areas: conflict of
interest, Standard of conducts
• Three quarter of countries have a central function for
developing and maintaining conflict of interest
policies
• Revolving door phenomenon: post public employment
conditions: cooling off periods
• Lobbying to inform public decision making?
• Potential for unfair advantages for vocal specific
interests when the process lacks transparency and
accountability
• 5 000 lobbyists registered with EC, 15 000 active in
Brussels. In US 3.3 Billion US spending in 2011

31. Integrity and fairness (cont)
 Financing democracy
• Money: a necessary component of the democratic
process
• Risks that unequal access to funding can distort
the playing field
• Some countries have national regulations to
• Balance sources of funding
• Introduce bans and limits on certain types of
donations
• Limit spending during elections
• Introducing reporting and transparency
requirements
• Defining monitoring and enforcement mechanisms
• Democratic countries face similar risks

32. THE WAY FORWARD
Building a Trust Agenda

33. Measuring Trust
• Going beyond superficial perceptions to attitudes that matter for
predicting future decisions, behavioural economics, nudging
• Cooperation with Statistics Committee to build a more solid and
policy actionable evidence base
COMPONENTS
MEASUREMENT-ATTITUDES
MEASUREMENTTRUSTWORTHINESS
Reliability
Actions in relation to
commitments, risks and
provision of basic services
Fairness
Acts for the common good, non Perception of fairness in public action: what drives
discretionary actions
legislation, provisions for senior office holders
Integrity
Public servants and senior
officials are honest, bribery
and corruption only
exceptional
Responsiveness
Government lists to people,
Actual experience with social conflicts, readiness to
complaints followed up, service submit a complaint if not listened to, actual
provided in time
experience in waiting to access a service
Openness/
inclusiveness
People understand government Actual experience to access information on the public Access to information rights
functioning, Access to public sector
Open Data Strategies
sector dealings
Understanding of policy making process
Powers of ombudsman
Perception that government has a strategy, prone to
listen to government advice
Concrete characteristics in terms of
long term strategy, risk management,
fiscal risks, standards for the delivery
of public services
Conflict of interest regulation,
lobbying, political finance regulation
Institutional checks and balances
Belief that public authorities obey to the rule of law,
Ethical norms, declarations of assets,
readiness to offer money to a civil servant to speed up enforcement of corruption
things, actual experience of bribe
Rules for managing conflicts,
providing information to citizens,
ombudsman, complaint management

34. Policy agenda, work in progress
• Public governance streams of work:
integrity, fairness of policy making processes,
lobbying, risk management, fiscal risks
• Concrete case studies of trustworthy
institutions
Connection with national reviews, focus on deeper
national experience
E.g. Metroscopia in Spain, examples above
• Building trust in key public policies
tax compliance, effective regulation, education,
etc…