Abstract
Over the past couple of decades, the organization studies community has increasingly directed its attention to the study of grand challenges, enabling us to become more societally relevant by addressing important problems that we collectively face as global citizens. But there is much more we can do! While we need to continue to grow our scholarly corpus on problems such as climate change and poverty, the global resurgence of populism and authoritarianism (e.g., see Adler et al., 2023) that we have witnessed in the early 21st century, inflected by the recent pandemic and Russian invasion of Ukraine, suggests the pressing need to also direct our attention to issues related to the decline of faith in democracy, capitalism, expertise, the media, and many other aspects of the liberal world order (Lounsbury & Wang, 2020). I argue that a core aspect of these interrelated dynamics has to do with the problem of institutional trust that merits much more sustained theoretical development and empirical attention.
Although there is a cottage industry of scholarship on trust, institutional trust has garnered relatively little attention in organization studies. Given that the study of both institutions and trust is so prevalent in the field of organization studies, it is puzzling as to why such scant attention has been paid to the problem of institutional trust (but see Bachmann, Gillespie, & Priem, 2015). It could be that in organization studies, most institutionalists have avoided the idea of institutional trust because it is thought to overlap with the master concept of legitimacy; but it seems useful to conceptualize the legitimacy of institutional and organizational forms as distinct from, but related to, trust between people and trustworthy behavior more generally. In the trust literature, the focus has been more exclusively on how people are trusting of others, whether that involves particularized or generalized trust (Schilke, Reimann, & Cook, 2021). While we might conceptualize institutional trust as a kind of generalized trust, Schilke et al. (2021) highlight that research on generalized trust has tended to emphasize psychological dispositions or orientations to trust others, including moral obligation, although a few studies in sociology, political science, and institutional economics examine country or regional-level differences in generalized trust.
Institutional trust is most commonly invoked to capture how formal institutions provide a target for trust, such as in the development literature’s focus on the perceived legitimacy of public institutions (e.g., the government). Institutional economists have leveraged this approach to institutional trust to refer to how trust in a government’s ability to maintain stable property rights, enforce the law, and limit corruption can facilitate economic growth. The lack of such economic growth, in turn, is blamed on corrupt or inappropriate institutions, or the existence of institutional voids. Ironically, while institutional economists use Western institutions as the gold standard solution for developing countries, recent policy studies scholars have argued that these Western institutions are in crisis. Using opinion survey data, they have shown how institutional trust has been systemically declining in Western developed countries. This decline seems to be particularly pronounced in Western Europe and the United States, and evidence even suggests that institutional trust is higher in some countries with authoritarian governments than in those with established democracies.
Going beyond a focus on how formal institutions (e.g., organizational forms) are a target for trust, sociological approaches to institutions suggest a broader, more constitutive view of institutions as constellations of cognitive and normative ideas and beliefs that form an important basis upon which trust is built. In this vein, Zucker (1986) pointed to the fruitfulness of theorizing about the institutional production of trust, or what others have referred to as institution-based trust. She argued that in the late 18th and early 19th centuries, existing forms of particularistic and generalized trust underlying economic exchange were disrupted by high rates of immigration and population mobility, leading to the development of new institutional innovations (e.g., managerial hierarchy, financial intermediaries, regulations) that created a new form of trust tied to formal social structures.
It may be that similar dynamics are at play today. It is reported that worldwide, there are close to 100 million forcibly displaced people—an unprecedented number in the context of virulent anti-immigration sentiment. In some cases, migration is engineered and weaponized in an effort to achieve a wide range of geopolitical goals, including the extraction of financial, military, and other forms of in-kind aid from wealthier countries. Such tactics have only been exacerbated in recent years with the growing support for populist and authoritarian regimes, further eroding institutional trust in democracy as a governance form. Of course, war also seems to be interpenetrated with such declines of institutional trust—as both cause and consequence.
While Zucker’s historical analysis emphasized the creation of new institutional forms that repaired the problem of institutional trust that emerged, we are amidst a current crisis of institutional trust, not knowing how it might be resolved. I believe our research community is well positioned to shed light on the nature of this crisis and to shape possibilities for the restoration of institutional trust. This certainly might include the design and construction of new governance forms and other institutional innovations that foster more progressive, resilient, peaceful, and inclusive societies.
Thus, how trust is institutionally constituted provides an important as well as opportune focal point for scholarship. As signaled by the Organization Studies special issue call for papers on Trust in Uncertain Times , there are many fruitful opportunities for research to bridge scholarship on different forms of trust and institutions across levels of analysis, including on how they are reciprocally constituted. Unlike the assumptions built into development economics that institutional trust is undergirded by Western-style government and policy, a more sociological approach signaled by Zucker suggests a need to unpack the interrelationships between institutions and trust in a much more context-sensitive way. And while Zucker anchored her initial argument on novel organizational forms that enabled new forms of trusting behavior, contemporary institutional analysis has a much broader canvas to guide an important research agenda on institutional trust. For instance, even though Zucker’s analysis emphasized the shift from one social order to another, the institutional logics perspective offers an approach to relatively enduring configurations of beliefs and practices that highlights the plurality of and conflict between institutions that is characteristic of most societies.
While certain logics may enable trustworthy behavior in domains where they prevail, conditions of institutional complexity where logics compete may create a wide assortment of trust problems. However, as research on hybrid organizing, paradox, and institutional complexity has begun to highlight, people are often very creative in creating various forms of mechanisms that bridge logics, enabling new forms of trust and cooperative behavior. How logics and the governance mechanisms that bridge logics cohere and endure, as well as promote the development of trust provides an important set of theoretically motivated questions that we know little about, and can provide a key focal point for the development of policy-relevant recommendations (Lounsbury, Steele, Wang, & Toubiana, 2021).
This is to say that we have a very robust conceptual toolkit than can enable us to develop a much richer approach than currently exists to the problem of institutional trust. Our appreciation of cultural processes and meaning can enable us to shed light on the major transformations that we are enmeshed in, and to enable us to contribute to the most profound policy issues of the day related to how to improve the global (and local) governance of society and economy. Our institutions are under siege. While democracy and capitalism are broad conceptual categories that include a wide variety of governance forms, logics, kinds of economic exchange, and everyday societal interactions, our field is well suited to unpack this variation, understand what is working and not, and to suggest new institutional forms that enhance trust, caring for others, and socio-economic well-being.