A Configurational Approach to Understanding the “Trust Problem” in the Context of Regulatory Governance

This paper highlights the benefits of a configurational approach in order to shed new light on the “trust problem”, a dominant view in the literature about the decline of trust and the negative consequences it entails. To this aim, we examine how different types of trust, between people, in government, and in major companies, interact, diverge, and evolve over time, and how these differences suggest a differential approach to regulation. Drawing on data from World Values Survey and Gallup data, we examine: (1) How has trust in society, government, and firms changed over time across different countries?; (2) To what extent are these trust dimensions correlated with one another?; and (3) How can the interaction of trust types be used to classify countries into meaningful trust configurations? We discuss whether countries can be categorized based on distinct trust configurations, and employ cluster analysis to do so. We introduce three measures of trust: Order of Trust, Trust Divergence, and Average Trust to capture the hierarchy, internal difference, and overall levels of trust. Our findings show that while average trust is declining, a more complex and interesting pattern emerges when we focus on order and divergence indicators. In addition, and contrary to the emphasis in existing literature, we see a consistent and growing pattern in which trust in government and companies exceeds social trust. In addition to mapping these empirical trends, the paper reflects on their implications for regulatory design and implementation, emphasizing the importance of accounting for differentiated trust dynamics when developing or reforming regulatory frameworks.