Making Capitalism Work : Fair Institutions and Trust

Abstract

In the field of political science researchers have shown empirically that the perception of relevant political institutions as fair may produce political (vertical), as well as interpersonal (horizontal) trust. By making use of these overlapping but separate theoretical frameworks, we formulated three hypotheses that we tested on data from a survey conducted in Sweden in 2006. First, we investigated whether the extent to which an employee perceives formal institutions as fair and duly enforced lower the probability that he/she will behave opportunistically. Second, we tested whether an employee's trust in the opposite party had equivalent effects. Third , we examined whether an employee's perception of formal institutions as fair and duly enforced increased his/her trust in the opposite party. All three hypotheses were supported by the data. Our interpretation is that that there is indeed an effect on cooperative behavior and willingness to enter into flexible contracts from perceptions of fair and enforced institutions, but it is indirect. Trust, however, has direct effects and, consequently, mediates the effects of institutions as well. ; Samarbete, konflikt och rättvisa på arbetsmarknaden (Skorpan)