The Political Economy of Trust

Farrell's The Political Economy of Trust is a tour de force. His book takes us through the burgeoning literature on social trust, social capital, institutions, and networks. Farrell has done us a service by clearly distinguishing among these terms, carefully carving out a distinct analytical space for each concept, and identifying their respective explanatory purchase. One of his main goals is to show that the concept of trust provides a deeper understanding of cooperation than institutions by themselves. He succeeds brilliantly. Farrell's masterful treatment of the literatures on social capital, culture, and rational choice approaches to institutions provides us with a more complete picture of the causes and consequences of institutions. His case studies of firms in Emilia Romagna, Italy and Baden-Wuerttemberg, Germany, along with his final chapter on the Mafia in Sicily provide the ideal material to illustrate his complex ideas and demonstrate their empirical grounding. -James A. Caporaso, University of Washington Henry Farrell's important book is a crucial contribution to the literature on social trust, and will be particularly influential among those seeking to understand the roots of coordinated market arrangements in advanced political economies. Boldly bridging the divide between rational-choice microfoundations and institutionalist macro-theorizing, while also bringing in culturalist perspectives, Farrell shows how trust can be grounded in informal institutions that were created for quite different reasons than the production or sustenance of cooperation. In doing so, he provides a powerful new way of understanding the role of trust in social, political, and economic life. -Jacob S. Hacker, Yale University