Trust: The social virtues and the creation of prosperity - Francis Fukuyama

Why do some societies do better than others in creating wealth?

In the grand tradition of Weber and Schumpeter, this ambitious and provocative study attempts to return culture and the fabric of society back to the heart of our understanding of economic success and failure. Fukuyama argues that prosperous countries tend to be those where business relations between people can be conducted informally and flexibly on the basis of trust, such as Germany, Japan, and (perhaps surprisingly) the United States. In other societies, such as France,  Italy, and Korea, social bonds are subordinated to family ties and other dysfunctional loyalties, creating rigidities, provoking state intervention, and dampening economic growth.

The important role of civil society

However, historical details, exceptions, and anomalies play havoc with the book's structural claims. Missing is an attempt to square the argument with earlier historical eras of economic rise and decline, including the emergent Industrial Revolution in Britain and Western Europe. Measures or tests for the role of culture and social trust in economic development also remain elusive, and the author ends by conceding this ambiguity. The book will enrich and complicate the political debate about economic growth as it stakes out a position that challenges both neoclassical and state-centered theories. It is a voice, in what is becoming a chorus, calling attention to the neglected role of civil society in shaping the terms of modern political and economic life.